The autumn in real estate


    autumn

    Bucharest, Romania 2015

    The last couple of weeks gave us, Romanians located in Bucharest, the chance to be in contact with the latest trends in the residential segment of local real estate. There is this tradition of organizing fairs dedicated to the ‘real estate’ market, during autumn and spring, reflecting however just the housing progress. These fairs and exhibitions are entirely dedicated to residential segment, which is a loss.

    It is a positive feeling I have had visiting the fairs. Excellent news on the latest developments, which are always a sign of market growth. Among the appreciative trends of the Bucharest market, the following stood-out:

    • New developers, local and international, have plans of raising the market
    • New locations are valuable in town, well known as former industrial platforms or simply open neglected green fields, such as Filaret, Drumul Taberei, Prelungirea Ghencea and further towards Militari, Theodor Pallady, etc.
    • A dynamic of small to medium projects of approx. 30 – 50 units per project
    • The planning of larger projects, set-up in several stages, cumulating over 1,000 units (I counted 3 in town, located in 2 cardinal positions: Militari & Prelungirea Ghencea– West and Berceni – South, J)
    • Local developers who have gained experience in the past with small projects, are now creating new products of a larger scale
    • The medium class is targeted as the future buyers of the products available in massive stock

    Counting the number of units announced to be delivered in 2016, in well known and established neighborhoods of Bucharest, the new stock to be delivered reached easily 2,500 units (+/- 15% of those small projects for which no reference could be found in the materials provided). Adding the peripheral projects, counting approx. 700 units, including Corbeanca, which is again on the real estate map) we can say that by the end of 2017, the market brings easily over 3,000 new units of apartments and houses.

    Prices are still in a balanced mood. If towards the border of the city, in outlying neighborhoods, the price per sq m starts at approx. 500 euro, coming closer to the round area defined as downtown, the prices go up to 1,300 euro per sq m, built area. The North, with several representative projects, is within this range. As mentioned above, products promoted on the large market are for medium class. VAT excluded. Mainly, 5%.

    Size is kept under the radar. 2 room (known as 1 bedroom) apartments are of approx. 55 sq m, built area, while 3 room (2 bedrooms) of 75 – 80 sq m built area. Prices for parking spaces start at 5,000 euro going up to a max of 12,000 euro, excl. VAT. So, a studio could range from a minimum of 29,000 euro to a maximum of 45,000 euro, while a 3 room apartment could reach 85,000 euro, excl. VAT.

    Houses, or villas, whether in a row or stand alone, have standard sizes 110 sq m built area, for ground floor plus 1 or 145 – 150 sq m of built area for ground floor + 2. Lots vary between 200 and 300 sq m, foot print on ground 60 – 70 sq m, free garden approx. 150 sq m. 2 or even 3 garages/parking spaces. The average price for a house is 85,000 euro plus VAT.

    Lots of offers, new projects, new developers. Is the market booming?

    The not so attractive issues could be summarized as:

    • Weak communication materials (flyers with lack of data, weedy quality of layout)
    • Fragile transparency on information between the project representatives and the potential clients
    • Lack of construction details and technical specifications in the materials
    • Boring expo stands, with no appealing or distinctive design
    • Sales teams with low competences representing the developers
    • Uncreative promotional campaigns

    In FAIRness of appreciating those that have became known as examples of high quality performance in developing and selling, let’s reconsider the approach of a most exhibitors that were saying “zero commission” when in fact selling directly from the developer, or stating “prices starting from…” when in fact the potential buyer ‘discovers’ that a particular apartment at the price of “x” is no longer available and the view is not actually to the nearby park (3 x sic!).

    There were exceptions, certainly, of innovative stands revealing the competitive advantages of the residential project, of well trained teams open to build a productive dialog with potential clients, of great brochures with contents full of descriptive information or, of well planned price policies. But what if, in the future, the exceptions will be the weak and not the strong?

    The main purpose of such events is to offer valuable information and options, to those who are looking to make, most of the time, a once in a life time investment. This is why, considering the market practice and past experiences, I think that including new elements would add value, attract the interest of the participants and visitors and continue an educational process of all players in the market.

    1. Workshops and seminars dedicated to: construction and technical specifications in residential, interior design for various layouts of apartments, financial education for buying a home, mortgages for Prima Casa and more, much more topics to be addressed.
    2. Inviting developers from the retail and office segment to join these developers with medium to large residential projects and showing the valuable urban design of that particular neighborhood where an entire new urban planning is considered.
    3. Legal workshops for contractual terms and conditions, so that future dilemmas on blinding signing will be avoided.
    4. Case studies for reshaping the urban area of a certain neighborhood, with specific designs of the exterior functional architecture.
    5. Seminars of suppliers and producers of construction materials presenting the products they create for better, contemporary living conditions.

    Would you enjoy a next fair that organizes, besides the classical tour of properties, some of these possible activities?

     

    photo credit: weknowyourdreams.com


    Signs – walking in or out?


    open door

    It is a long time since I started to be an independent consultant. Linked-in reminded me that there are 7 years already, this October (2015). During the lapse, I took, temporarily, various positions with several companies, on management service contracts, so that the experience I had gained to be shared, while the experience to be gained was a motivational factor of my decision. Some of the contracts were slightly longer than 2 years, some vaguely shorter than 6 months. Some gave me huge satisfaction, while some disappointed me so much that returning to my private desk seemed to be a blessing.

    When you receive a compliment from a high ranking senior of the council of a listed company saying ‘you will be missed’ it soften the feeling of disillusion heaped up during the contract that you have just resigned.

    When you are lucky to say, that going to work every morning is satisfactory, it is the best compliment an employer could receive (idea confirmed by an acquaintances that alleged: ‘ Sunday evening I am happy, even if knowing that Monday I go to work. This thought is not stressing me, annoying me or making me sad!’). Be more employers receiving such compliments!

    If considering 3 galling things in your daily working flow, which might these be? Please comment!

    Mine are:

    1. Potential partners/ clients that, after several meetings during minimum 2 -3 weeks, while exploring, proposing, building the collaboration frame, simply disappear when it comes to contract feedback. No phone answers. No email answers. Nothing. (This category includes those under contractual success fee structure).
    2. Potential partners/ clients who are literally killing you with phones, emails, when in need to obtain something, 99% cases for free. They won’t stop unless get it. Afterwards, complete silence. (This category includes friends who benefit of you).
    3. Potential partners/ clients calling in for meetings with no purpose. While crossing half a town, in rush-hour traffic, to reach their office, priory setting up an agenda suggesting some objectives, they look at you and say nothing relevant.

    A mature, in all senses of the term, manager, running his/her own business or representing a company, should be able to show at least half of the following characteristics:

    1. Be sincere. Saying the truth all the time. Towards employees, partners, suppliers (extended to family, friends, neighbors). Should you be embarrassed to do so, it means you can’t handle lies told to you by others. Exercise on form. Those who lie or say half truths are not going to positively contribute to growth.
    2. Be transparent in decision and actions. Towards the team and yourself. Learning from mistakes is more valuable than the illusion of being incapable of mistakes at all. Don’t let your team find out of actions you’ve done from the press or strangers. Communicate and build connections make you successful.
    3. Act. Avoid procrastination on decisions. Waiting for the right moment, the right person, the right budget instead of setting the actions and doing things is not bringing any ‘right’. Time is the most valuable attribute we have. Don’t waste it. Once lost it cannot be saved or reclaimed, as money do.
    4. Be present. Always looking as if you are a very busy person is a lie. Go back to Be Sincere and share your priorities list. A person who’s constantly full of activity has weak planning and time management abilities.
    5. Be polite. Answering calls, returning calls, answering emails, even with delays shows respect to yourself and others. Be present.
    6. Assume. As in Be responsible on your actions. This cannot be or go wrong. Be transparent.
    7. Try and adjust. Insecurity in taking decisions and actions is sometimes not a weakness but a learning tool. Let your team know better than you, it shows respect to specialists who worked and trained hard to excel in their job. Be sincere.
    8. Team play. Team work is the key to a successful business. Create a compensation scheme valuable to all members. This is a guarantee to a long term flourishing company, with or without you in the next decade. This idea leads me to the example I read in Simon Sinek book, Leaders eat last (http://www.amazon.com/Leaders-Eat-Last-Together-Others/dp/1591845327, pg. 293, Romanian Edition at Publica). America Online (AOL) created a compensation system for the Sales Department based on tactics of selling more fees to users, up to offering 1000 hours free a month. Do you know how many hours a month has? The tactics where mainly focused on new clients. The Fidelisation & Retention Department role was to keep and bring back those clients cancelling their subscription after a month or two (sic!). They were as well compensated on results. The two divisions worked independently caring only on their own indicators, ignoring the other or the company financial results. So, the leaders of the organizations encouraged actually their team to increase the costs of the company. Couldn’t know how this worked out on employees’ retention, trainings, wages, etc.
    9. Admit the fears. Being afraid is only biological. Losing didn’t kill anyone, unless fighting for your life literally. As Karim Rashid (http://www.karimrashid.com/) said during his conference in Bucharest “If you feel that, involvement into a project is bringing you the satisfaction of a real contribution, changing a bit the industry of the company you’ve been asked to work for, then do the project. If not, refuse it. Some will not accept your conditions and reject your offer. That’s ok. Move forward.”
    10. Be the model of a constructive environment. This will last long after your departure. Same Karim Rashid explained: “We are all creative but: We do not strive enough to be more creative and b. We do not believe we are creative. We do not trust our creativity. There are two ways to save the world: procreation and creation.”

    Credentials to Cristina Bazavan (http://bazavan.ro/) and Monica Jitariuc (http://www.monicajitariuc.ro/) for Karim Rachid conference posts that enlightened my yesterday and Liviana Rotaru for reminding me what going happy to the office means.

    Photo credit: sodahead.com


    Searching for the right candidate


    Flickr

    Occasionally several head-hunters include me in their list of referrals for position to be filled by their contracted clients. It is always surprisingly that when in real estate they look exclusively in the same industry for suitable candidates, who are specialized on multidisciplinary industries.

    I am not a recruiter, I have all the chances to never be. Though, several ideas came into my mind when recently I’ve been asked if I could recommend marketing managers for shopping centers.

    One idea is related to the strategy of the research. Another is linked to the right approach of the channels. The last one is to the successful delivery of the right list of candidates to the client.

    Commonly is to source the candidates from competition of the employer. But what if, as in this case, the profession on retail segment is quite new, as the ‘product’ = shopping center starting to exist a few years ago. The third Bucharest shopping center opened in 2006, the last one in May this year (2015).

    Therefore the experienced professionals in this area didn’t have the time to be formed. Actually, it is my opinion that there isn’t a large list of marketing experts on office, residential or retail, so long to be considered. Few masters the job and fewer will leave it for another box.

    Most of the developments in real estate, excluding large developments of course, are using as marketing the external experts, like real estate agencies, PR or advertising, social media, etc. while their internal team is limited, occasionally, to a coordinator, rather than a manager of a team to handle all those experts. In some cases, there is no marketing coordinator, but only the owner, as manager of the entire development and sales/ leasing process (sic!).

    So, instead of calling in only real estate marketing experts, why not calling in the experts themselves. Maybe they want to switch the industries and add to their professional life new challenges and perspectives.

    There are so many professionals on the market with excellent background and great competences, who would rather welcome such an opportunity to enhance their professional experience.

    Any services and profession requires first of all creativity and persuasive abilities, to convince and educate the client into the right direction. Especially, when services are to help them design and fill in a team of professionals.

    It is my opinion that unless we add value to the basic, perfect process of our service, there’s no chance for our working environment to improve. Recently I met a MP of a recruiting company who declared they stopped working with clients who embarrass, offend and humiliate candidates at the interviews. That’s an example of creating a competitive advantage.

    The excuse that the client does not want to do other than what considers at a point, it is not enough! Try harder and switch to plan B, C…..!

    Photo credit: Flickr!