3bn-euro mega real estate projects blocked due to lack of funding

Giant real estate projects, covering several hectares of land in Bucharest, and even hundreds of hectares outside the city, are the most difficult to finance at present, which is why the majority of them have been put off, with the investment value of seven of the largest ones exceeding 3 billion euros, according to ZF data.

Such projects, like shopping centres Parklake Plaza and Promenada Mall, could act as a changing force to the city's image by turning empty plots of land and plots where disused factories are located, into new, modern buildings, while the 5,000-6,000-home residential complexes announced by EFG, Martinsa-Fadesa, Africa Israel and Copper Beech outside the city, could have expanded Bucharest horizontally, by building up new communities on the outskirts of the city.

Whereas the real estate business used to operate with 20-30% funding from the developers until recently, while the rest of the money came from banks, the revision in the banks' attitude towards real estate funding put these companies' plans on hold. "One will go back to these projects when lending is resumed," says Razvan Gheorghe, general manager of real estate consultancy Cushman & Wakefield on real estate developments.

Source: Ziarul Financiar