Michele Nusco, CEO of Nusco Imobiliara, spoke to Property Forum about the company’s first villa project in the north of Bucharest and the further development of the Nusco City mixed project in which the planned investment will exceed €100 million.
This interview was first published in Property Forum’s annual listing of "The 50 most influential people on Romania’s real estate market”.
How did Nusco Imobiliara perform during 2022 in terms of financial results and real estate developments? What are the objectives for this year?
The delivery of phase 1A of Nusco City has brought very good results to the company, and in the first part of this year we are delivering phase 1B to the community, and we will launch phase two of Nusco City and the villa project in the northern area of the Capital – Nusco Homes. This year’s objectives are to strengthen the current portfolio as well as expand new investment opportunities. And related to the developments, objectives and investments started this year we have more than €30 million to invest in the new residential complex of villas in northern Bucharest, in the green area of Tunari – Nusco Homes, together with phase two of Nusco City – which means a total investment of €150 million.
What is the current development status of Nusco City? How is the project received in the market?
Nusco City has already become a landmark project for us because its size means real urban regeneration in the area. It has given us a lot of confidence because the project has been extremely well received, as it is a mixed-use development, very complex. From the performance of this project, a new direction of development is emerging for us, with the launch of Nusco Homes – the company’s first housing project.
Do you have plans for new investments in the office segment? How will the hybrid working system influence the structure of office buildings in the future?
Yes, together with the launch of the commercial and office component of Nusco City, a project that we are starting this year and which will have approximately 80,000 sqm of built area.
As far as the work area is concerned, we were among the first developers to receive feedback on the pandemic in real-time, so to speak, because we were launching Nusco City at the very beginning of the pandemic. Thus, the remote working system imposed at that time by the pandemic restrictions immediately brought about a fundamental change in our working behaviour, and the first thing was to start – as far as possible – redesigning our homes with at least a working area if we did not have space for a dedicated office. That is why we believe that Nusco City is one of the first residential projects that welcomed the need for an office within the home, or at least a small dedicated workspace. From here, we have learned a lot about the importance of new work areas and how our entire professional activity has become very flexible, so the office structure in the commercial component of Nusco City will be developed in full compliance with the flexible working system - which has already become a worldwide fact – with dedicated and open spaces for meetings, creativity and relaxation, along with all the safety certifications.
What is the residential demand outlook in Bucharest?
With how well the project has been received, we are confident and seeing the steady demand we currently have in our sales offices, we are convinced that demand will remain strong going forward. The expansion of the city has led us to invest in this area in this market, it is one of the most consistent markets in the region for new developments and beyond. I have been in Romania for over 15 years and I see, year after year, these changes and transformations of the Capital and we are happy to be part of this process of regeneration and growth with our developments.
How significant is the share of buyers who view residential units in Nusco projects as an investment?
In recent times we have seen a steady increase in customers buying for investment, whether they are institutional investors buying packages of between 5-30 apartments or small investors buying one-off units, they all want to secure their finances. The products we have are valued by investors, who see the potential for appreciation of the product over time, in addition to the returns they earn annually. However, our focus is on the end customer, because their share makes up the Nusco communities to whom we deliver – in addition to a new home – a new quality of life.
How do you manage construction costs? Are there any differences in this segment compared to 2022?
Everything is constantly changing in this area, so we are currently at the stage of observing all the external factors that can put pressure on local developments, followed by geopolitical, natural and social events such as those in Ukraine or Turkey. We, therefore, expect that the massive reconstruction process in these countries will bring disruption to the current (supply – e.n.) flows in the local market. Depending on all this, construction prices will rise and this will be reflected in sales prices.
What is the outlook for real estate development in Bucharest, given the slow approval process for new projects?
Stocks are already decreasing. Due to the bottleneck in issuing building permits, this phenomenon will be felt even more in the coming period, when we will have a very low stock of new apartments in the Bucharest market. This will most likely also lead to an increase in prices. Of course, we all know that this phenomenon has brought and will only bring a negative influence on the local real estate market.
Is Romania an attractive market for foreign real estate investments? Will we see, for example, more real estate investors from Italy?
Yes, there are interested international clients who have already invested budgets in the local market, including in Nusco City, where we have an important share of Italian investors, thanks to the company’s background. Lately, after the listing of Nusco in Italy on the stock exchange, this has strengthened their confidence to invest in our projects, their share is increasing.
How many employees does Nusco Imobiliara have at present? Are you looking to hire certain types of specialists?
We are a group-wide team of over 350 people – Nusco and Pinum. Nusco Imobiliara (the real estate developer) has a team of over 40 people currently, and we are always looking for top professionals in the industry because our working philosophy is mostly based on the human resource, which is also very important within our group.
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