High prices for medium sized land plots in Pipera
According to Thompson Financial, the Hungarian Ablon Group recently purchased a 40000sqm plot of land in Pipera for a medium-large development project. Although the position and the size of the plot are not imposing, the price paid is rather significant: €18.5M.
On the purchased land, Ablon plans to build a number of 1000 flats, as well as a 28000sqm commercial/office area. In spite of the high figure of the acquisition, Ablon estimate their profits for this project around €200M. Although the figure is by all means not guaranteed, the company is not a novice on the Romanian real estate market, as earlier this year they bought for €9.5M another smaller plot in Pipera, where another 1000 apartments and an office building will be built.
In addition, late last year, Ablon also bought two large plots further from Bucharest, in Mogosoaia. On the resulting 220000sqm area, the company plans to build almost 2000 apartments, as well as more than 100 villas. The two plots did not come cheap either, at €15.3M.
Such transactions start to indicate that plots beyond the outskirts of Bucharest also become prohibitive for small investors. The €462/sqm for the Pipera plot and even the €70/sqm for the Mogosoaia land would impose a significant burden on single-house 300-500sqm footprint projects.
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Posted: November 8th, 2007 under Land, Reviews.
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