Simona Șchiopotă, Managing Partner at Hitch&Mosher spoke to Property Forum about the potential of Timișoara and the western part of Romania to attract new real estate investors and the expansion of the agency’s portfolio with propert management services and commercial projects.
This interview was first published in Property Forum’s annual listing of "The 50 most influential people on Romania’s real estate market”.
What are Hitch & Mosher’s goals for 2022 and which segments of real estate will make the biggest contribution to the business?
As a source of inspiration for the challenges of daily business, we are guided by the principle that “growth and comfort cannot coexist”. Thus, we have always looked for opportunities to gain experience for ourselves, our team and the companies in the Hitch&Mosher Group. In my view, motivation comes first and foremost from the passion and enthusiasm with which you achieve your goals in your daily work.
In 2022, Hitch&Mosher aims to consolidate the growth of the company’s turnover and market share, carefully develop new directions, namely the property management subsidiary, commercial projects (neighbourhood shopping galleries) and contain the specialisation of the team. The segments that contribute, in an integrated way, to the achievement of the company’s objectives are the residential area with exclusively managed projects such as Denya Forest, in partnership with Danya Cebus Romania and luxury properties, proximity commercial projects (we have five s trip malls in the pipeline, which will be delivered in the next two years), logistics projects, warehouses, non-polluting light industry, including the office area. Finally, we have initiated various collaborations in the field of green energy, in particular with high-calibre developers for photovoltaic parks.
What are the prospects for the rental market in Timișoara this year and in which segments do you have the highest volume of activity?
In the context of the end of the Covid-19 pandemic, the return of physical presence in university centres and the increase in residential unit prices brought by the inflation of building material costs, there is an increase in both demand and rental housing prices. These had fallen since March 2020, when the health crisis began.
A significant share of the increase in rental demand in the residential segment is also due to rising borrowing costs, making it more difficult to access bank finance to purchase. In the office space market, although large companies want to bring employees back to the office, we do not foresee major changes, due to the preference for hybrid working.
On the other hand, supply in the logistics and industrial market is undersupplied compared to demand in the western part of Romania.
Do you see changes in demand following the removal of all restrictions imposed during the pandemic period?
Of course, as soon as we came out of the pandemic period and the restrictions were lifted, we had an increased demand for all types of real estate. The conflict in Ukraine has partially – but not significantly – dampened the buying decision – but the trend of interest from our clients is increasing.
What is the growth potential of the logistics market in Western Romania and what is the interest of new investors to enter with projects in this region?
A huge potential, especially due to the strategic advantages of the western area – I am referring to Timisoara and beyond. It is a very tempting market, greatly encouraged by online orders for various categories of goods during the pandemic period, the consequence being the need to own logistics targets for players in this segment. We have had, for example, two large transactions with over 14 hectares of land, and the demand is very high. Of course, on top of this demand for land for logistics is the demand for land for production facilities, based on the relocation of these capacities from the neighbouring conflict zone and China. In this sector, we have a portfolio that looks good.
Does the residential sector remain one of the main drivers of growth in the real estate market this year?
For the residential sector, forecasts for this year are difficult to make, mainly because of the dynamics of the prices of building materials and the selling price of units in this category as a direct consequence of these increases. In Timișoara, for example, demand is high and there are developers – Romanian or foreign – whose strategy is bearing fruit and who are continuing with announced projects or starting new ones, as well as investors who have put projects on hold.
Has the crisis in Ukraine had any impact on the real estate market in the West in terms of demand and interest in new developments?
There has certainly been a moment of decision-making deadlock, at the buyer level, because of the unpredictability of the evolution of such a conflict and the proximity of our country to this area. However, the concerns have diminished.
As far as developers are concerned, we know of situations where they have had to find new suppliers for building materials imported from Ukraine, one example being timber.
Hitch & Mosher also specialises in the area of agricultural land trading. How does this component differ from the commercial real estate sector in terms of investor typology?
Currently, this commercial component is at a standstill, mainly because of the legislative framework, which does not encourage commercialisation. We have had, in recent years, up to 2019, large transactions, brokering over 15,000 hectares to reputable investment funds. It remains to be seen what direction the Romanian state will impose for this area.
How do you approach the topic of digitisation at the agency level and how do you use technology in your daily work?
It is a process that needs to be constantly recalibrated and is under our constant attention. This helps the company to achieve its results, be competitive and successfully implement its development strategies.
During the pandemic, technology has helped us a lot in our daily activities. This has led to an increase in requests to view properties via video call, as well as negotiation meetings conducted via video conferencing using apps.
Also, in order to improve the client experience, but also to keep up with current technologies and to promote properties at the highest photo-video quality level, we have used the services of a professional photography company; for special properties or exclusively represented residential complexes we have even organised photo-video sessions with drones.
What is the biggest opportunity for investors choosing the western Romanian real estate market?
The opportunities are given by the strategic value of the western area, nationally and at the same time as a geographical location, with easy connection to the European space through motorways and the airport. The standard of living – well defined at the national level, multiculturalism, the development of education and research, and low unemployment, all contribute to attracting investment in Timișoara and the western area. Therefore, the real estate market is also extremely attractive, with numerous transactions, raising the area to an honourable height, to which we, Hitch&Mosher, have also contributed.
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