Developer: Part of the banks refuse investments in housing, and in the case of the other ones, you finish building until you receive the money
- October 3, 2018
Apparently, banks changed their attitude towards the financing of residential projects, but the reality is different. If crediting institutions, who still haven’t yet escaped from non-performing assets, are prohibited to credit this real estate sector, those that receive files settle them with difficulty, says Tomas Manjon, managing partner of the Mantor Spanish Group.
“Some banks say no from the first place, and those that are open, grant credits with great difficulty, that you finish the building until they release the money”, says Manjon in an interview granted to the Capital magazine.
Tomas Manjon has led for four years the real estate businesses of Ion Ţiriac, a period during which, he says, learned from him what the necessary courage, risks and sacrifice mean in entrepreneurship. In 2015, together with Diego Stuyck and David Tortosa, set up the Mantor group, which, these days, began the construction works at its first residential project.
One and a half years ago, the three of them bought a land near the Lidl store on the Iancu Nicolae Boulevard in Bucharest, at a price so high that Manjon says that he is ashamed to make it public. Now, it began the construction of the Trastevere complex, which will have 54 apartments put on for sale at an average price of 1,400 euros/square meter.
The investment in this project is estimated at approximately EUR 6 million, including the land cost, but the Spanish group will not resort to banks because it is financed from equity and advances paid by buyers.
“Until now, we sold just over half of the apartments. We sold with a fairly large discount before beginning the construction. The initial discount was of 30%. Who buys now has a discount of 18%, when we reach with the works at a certain level, we decrease to 13% and so on. We expect to sell most units before the project completion, scheduled for the next year’s fall”, Manjon mentions.
In parallel, Spanish people purchase a land of approximately 2,700 square meters on Pipera Street where they want to raise a complex with a similar number of apartments. Manjon looks at the residential market as a pyramid, from the perspective of the request, with luxury dwellings on the top. He doesn’t want to build large projects, because there are fewer customers towards the top of the pyramid and to control his risk. In the case of this project, Manjon thinks about resorting to banks as well. Moreover, Mantor is in preliminary discussions for the purchase of an old building near Cercul Militar from the centre of Bucharest, which can be consolidated and transformed in an apartments block.
A year ago, the contractor remembers that he lost, in favour of another investor, a land from the centre of Bucharest, appropriate for a small office building, as his high price determined the people around him to categorise him as crazy.
Romanian people, interested in apartments for rent
In addition to the real estate division, the Spanish group also comprises a constructions company, a property administration company and an interior design company.
As the constructor, Mantor recently completed a student’s home with 16 accommodation places in the centre of Bucharest, where monthly rents of minimum 250 euros/month are practiced.
Tomas Manjon says that he notices an increase in the interest of Romanian people for investments in apartments to be rented, justified by the superior yield on bank deposits.
“People are not aware of how complicated such a business is. If you have an apartment, it’s fine, but if you have four, problems start to appear. It occupies your time the same as a job. Our group, by Facilitec, administers several leased apartments and I can say that it’s a great headache. When you have 400 families, each with his problems and frustrations, it’s complicated to manage a business. In the case of an offices building, you have four clients with whom you speak the same business language and get a better return. Moreover, you administer an offices building with two people, but if you have apartments, you need an army of people”, the contractor explains.
He also says that in Bucharest there are few cranes for a city with three million inhabitants. Comparatively, in a full crisis, in Madrid – his home town – only in one neighbourhood, there were several cranes.
„On a small market, when a large site appears, it absorbs the entire available workforce. In such moments, it is very difficult to find workers”, Manjon explains. The group’s construction company prefers to subcontract the workmanship of smaller, specialised companies.
During the crisis, the young entrepreneur led the local business of the Spanish group Gea21, a company that faced drastic problems in the development of the Laguna Residence complex, which went bankrupt eventually.
“From the crisis I learned that you must be flexible. The apartments we are doing now have a flexible partitioning, the same as the offices buildings. During the crisis, when the market changed, we could not react because the structure of apartments was rigid. Flexibility, instead, allows you to rapidly adapt to new situations”, concludes the Mantor group manager.
Tomas Manjon played football at the Real Madrid club junior team until the age of 16 and later played rugby in the second league of Spain.