UNETHICAL PRACTICES plague Bucharest period property market

As is often the case in a property boom, there are many instances of developers that do not match their words with deeds, and the situation in Bucharest is no exception. What is worrying in the case of Romania’s capital is the apparent large scale at which that phenomenon is taking place. The market is crowded with second and third rate developers on the lookout for a quick gain, unscrupulous estate agents, rapacious property flippers and ineffective or even corrupt authorities, making it a toxic mix for the future sustainable development of this large metropolis. 

There are also some instances of international developers that have a good reputation in their home and western markets, but eschew the rules in the new EU member states from Eastern Europe. In Romania, the main culprits are, according to the press and everyday observations of the ground, the Spanish companies (see my post on Lipscani quarter urban regeneration) followed by a multitude of other developers that have their headquarters in Mediterranean countries, companies that have a heavy presence in Romania. 

I have here an example of an iconic Bucharest building, the old Cismigiu-Palas Hotel, just across the road from the City Hall, which is owned for a number of years by the Spanish developer Hercesa. 

The building, which is heritage listed, was meant to be transformed in a hotel or even the headquarters of Hercesa, but the most probable goal of this company is to leave it deteriorating beyond repair (its roof, many of the windows and structural elements are stripped off) as a means to circumvent the listed buildings legislation and put on that valuable piece of land a highly profitable office block. 

Hercesa is a large business concern that has projects all over Europe, and it seems that in Romania has decided to cut corners an engage in unethical practices in order to make quick gains, thus exploiting the weakness of the officials and the apparent lack of interest of a large part of the local population in its urban heritage. 

Another example is that of a Little Paris style building in northern Cismigiu area, where the Spanish developer and local contractors performed a shoddy unprofessional renovation that just damaged the edifice, erasing most of its period architectural ornaments, in order to flip the property as an office building on the euphoric market that ended last year. 

I saw the building advertised for sale a couple of months ago in one of the Romanian classified ads paper for over two million Euro (!), an unrealistic price even at the height of the market. The company also advertises the building on their website claiming to use reputable agents for its commercialisation. 

It is interesting to note here the unprofessional marketing ploy of this company, trying to hide the shoddy renovation work and the grim reality of the neighbourhood by presenting the building in an idealised computer rendering that contains an aspirational décor of affluent people strolling around or driving expensive cabriolet cars. 

One must add to this situation the effects of the financial crisis and the unravelling of the Romanian property bubble to realise the magnitude of adverse factors faced by the Bucharest period properties. Many renovation projects are now just abandoned due to lack of financing with grim consequences for the period buildings or architectural details that were intended to be preserved. I have here an eloquent example of a corner street building in Gara de Nord area where the intention was to preserve the magnificent Little Paris style exterior wall, which is now just a gostly ruin.

It is obvious that the Bucharest period properties being located mainly in central areas and built on valuable pieces of land are a prime target of these companies that engage in unethical behaviour. As a consequence there are many instances of intense pressure from developers on proprietors to sell and the city authorities to grant planning and building permits. 

There are also circumstances of period property owners that would gladly knock down their own buildings and conclude lucrative deals with cowboy construction companies in order to erect nondescript offices or ramshackle block of flats in the middle of the city, just for the sake of an apparent quick enrichment. One of the countless examples is in the picture bellow of a Neo-Romanian house, which is most probably heritage listed, in the Medical University area, left to deteriorate by its owner as the only legal means to free the land for a new more profitable construction. ©Valentin Mandache

Posted in Architectural Heritage, Bucharest, Property Market Tagged: Architecture, Balkans, Bucharest, Bucuresti, Building Boom, Eastern Europe, Little Paris, Modern Architecture, Modernisation, Period Property, Property Bubble, Property Market, Real Estate, Renovation Project, Romania, South East Europe, Urban Regeneration