Element Group has been prolific in Romania’s real estate projects. How challenging is it to find suitable land parcels nowadays, and what regions are you currently focusing on?

Essential in real estate are three factors: location, accessibility, and developer reputation. For Element Industrial, targeting parcels of 20,000 to 70,000 sqm is key. Optimal transport infrastructure and workforce accessibility drive our focus. Eli Express caters to smaller projects, providing leased areas of 500 to 1200 sqm. Our differentiator lies in flexibility and accommodating diverse demands.

In terms of locations, our focus spans areas like Ploiesti, Pitesti, Craiova, among others, diversifying to match client preferences.

How did the global pandemic impact your business, and did it alter your strategy?

Our diversified approach in office and logistics sectors helped navigate the pandemic. Although the rental process in the office segment experienced a slight slowdown, we achieved good percentages in office project rentals under development. Leasing in logistics is on the rise, leading us to bolster our teams in this sector.

Where do you typically source project financing from, and is the financing climate favorable in Romania presently?

We predominantly utilize 70% private debt from commercial banks, supplemented by internal resources. Starting a project relies on securing intended clients beforehand, ensuring self-reliance in case of potential delays in commercial loans.

Banks in Romania generally embrace real estate projects, scrutinizing location, cash flow predictability, and developer reputation. Logistics projects now enjoy increased banking interest, provided reliable pre-rental projections are presented.

Managing the entire project cycle, what do you find most challenging as a CFO in Romania’s business landscape?

Aligning projected milestones with actuals, particularly during exit stages, can be challenging. A successful exit hinges on solid development, requiring precise planning and client prospecting during the early phases.

Looking ahead, what are your priorities for the next three to five years, and what’s the anticipated investment pace?

Element Industrial eyes a 500,000 sqm target in the logistics division. Welcoming new foreign investors remains a priority. Romania’s draw—quality workforce at affordable costs—remains strong, evident in our tenant portfolio occupied by both foreign and Romanian companies.

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