Tag Archives: spații comerciale

Commercial spaces and the gambling industry

The Romanian real estate market has been through many changes over the last years. The financial crisis changed everything. The commercial premises fit for the opening of a casino/ gambling hall/bookmakers with potential, with a “pool” of gamblers and all the facilities required on our competition market are increasingly scarce and are leased immediately. The information is power in this field and also makes the difference between bankruptcy and profit.

The real estate market after the crisis

The real estate market has made an amazing come-back in the recent years after the crash in 2008-2009 amid the economic crisis.

Constructions began in several new areas throughout the year. The new building owners also focused on increasing the number of commercial spaces that are suitable for medical clinics, gyms, pharmacies, playgrounds and casinos, gaming rooms or any other activity that benefits buyers.

In recent years, the reduction in the number of commercial spaces has been happening much faster than the emergence of new ones, and this phenomenon is due mainly to the Romanian legislation. The new legislation does not ease the work and investment of the owners, and brings new licensing regulations. A commercial space, according to the law, must have several access ways, fire extinguishers, smoke detectors and many more, which lead to huge investments to be made by the buyers / tenants.

Commercial spaces located on the ground floor of blocks, with massive visibility and in a good location are currently dominated by a rather small number of players, the vast majority of which are from the sectors of activity of pharmacies, supermarket chains, banks, and last but not least of gambling and betting operators.

“Charging decent rents compared to the ability of the commercial space to generate a certain level of sales has significantly reduced the rotation of the tenants in a certain space,” says Costina Petrescu, executive director of the real estate portal Titirez.ro.

Casinos, gambling and betting sites have been active for several decades at the ground floors of the city’s blocks. Over time, they have migrated, developed and occupied both major shopping centers and luxurious offices, mainly located historical buildings in very important areas of cities. Those commercial spaces, once leased, they hardly become vacant again. They turn into locations of great interest for gamers.

No commercial spaces in blocks with red circular markings

In 2015, following the tragedy in the Collective Club, the National Coalition for the Modernization of Romania asked President Iohannis to promulgate an emergency law, which was passed in the Parliament on October 10, 2015.

Thus, the law provides for the prohibition of the organization and carrying out of permanent and / or temporary activities in the areas “involving crowds of people until the completion of the interventions carried out in order to increase the level of the seismic safety of the existing constructions”.

“As a result of this law, the spaces in buildings with a seismic risk could no longer be used for commercial purposes. Thus, in a very short time, hundreds of units located in such buildings were closed. A direct result was also the increase in the prices for the spaces that complied with the legislative norms,” says Costina Petrescu, executive director of the Titirez.ro real estate portal.

Good perspectives

Romania has good macroeconomic prospects, and this encourages the consumption and the potential for development of the local commercial space market.

In the third quarter of this year, Romania’s GDP increased by 8.6% compared to the similar period in 2016, surpassing the 6.2% estimate of financial analysts. The European Commission estimates that Romania’s GDP will increase by 4.4% next year.

There are also several secondary cities that offer prospects for the development of several shopping centers, due to the favorable economic environment and consumer profile.

Average rental prices

The average rental price for spaces located in the shopping centers in the capital is EUR 60/sqm/month.

The rental price for street commercial spaces varies depending on the location, the specificity of the area and the opening to the pedestrian walkway. Average rents in areas such as Pantelimon, Colentina, Obor vary between EUR 20-25/sqm/month; In the Ștefan cel Mare area it is between EUR 20-30/sqm/month; In Militari tends to be between EUR 25-30/sqm/month. And in areas such as Titulescu and Victoriei Square, average rents are between EUR 25-35/sqm/month.

Regarding the rents in the central area of Bucharest, the price per square meter may vary between EUR 6/sqm for spaces located in historic villas, up to EUR 60-70/sqm for spaces in newer buildings on high traffic streets.

Cluj Napoca is the city that closely follows the rents of commercial spaces in Bucharest …

“The listing prices for the ground floor spaces in Cluj-Napoca city start at EUR 6-7 and can reach over EUR 40 per square meter. Thus, for a space located in the very heart of the city, with lots of pedestrian traffic, suitable for commercial activities, one would have to pay a rent of EUR 3,990/month for 86 sqm”, adds Costina Petrescu, CEO of Titirez.ro.

Trends

The trend of the recent years has been to reduce the areas required for leasing. Thus, potential tenants have begun to request surfaces between 50-120 square meters.

The continued growth of competition, consumer behavior and the trend towards online gambling and sports betting directly impact retail space development, but the market is maturing and going to the next level, which was to be expected.

“The prices of the rents for the commercial spaces that the gaming industry occupies are directly proportional to the evolution of the real estate market in Romania. The trend is to increase both sales and rental prices for all types of real estate. The rental prices of retail spaces located at the ground floors of blocks, especially those located right on the street, are expected to increase, the main cause being the limited supply and the high demand. There is indeed a transition to online services, but physical offices are imperative”, concludes Costina Petrescu, executive director of the leading real estate site network Titirez.ro.

Titirez.ro was launched in 2010 and it is the only real estate portal in Romania where the offer is balanced from the standpoint of demand and supply for both cheap and medium-high properties. Titirez.ro is the real estate portal where the agencies, developers and owners meet in perfect harmony with those who are looking for the purchase, sale or rental of a property.