Worldwide Property Forums | Re: cluj napoca and jucu - a 2008 update

It seems that foreign investment and logistical development take no holidays here in Cluj Napoca. Cluj is just on a course to grow and grow. What follows is drawn from Press articles or releases over the last few weeks. Cluj I guess was put on the European map as a result of Nokia’s decision to establish a plant at Jucu, a sleepy little village 15 kms outside the city…which will host what will probably be the largest industrial park (Tetarom 3) in Europe.

Since Nokia’s decision last March other multinational companies have followed. Speculation has been rife that General Motors will set up on the same site. On December 27th Press reports (e.g. http: / /www .zf .ro /articol _155116 /ziua _de _cluj _ _general _motors _vrea _langa _nokia _ .html)n appeared which seem to confirm that GM is going to motor down the same industrial highway as Nokia. It seems they will occupy a 100 hectare car park investing 500 million Euro for a final assembly plant for the Opel. Whilst last year GM had expressed interest in Jucu it was known to be considering several other locations within and outside of Romania including Brasov.

According to reports today (http: / /www .ziuadecj .ro /action /article?ID=6924 ) the Industrial Park may be extended by up to 200 hectares with a commitment to taking up a minimum 100 hectares having been negotiated between Tetarom 3 and the land owners, the University for Agriculture and Vetinary Medicine. In the same article the Director of Tetarom, Viorel Gavrea, is reported as saying ‘I can assure you that for 2008 we have an important surprise for Cluj. Nor are we talking about General Motors, we are in advanced discussions with an investor just as important’. (translation is not perfect)

The same publication, also today, updated its readers on the 267 hectare Dealul Lomb project and the 203 hectare Tineretului project – both public/private sector initiatives. Other large projects mentioned in the same article include a 71500 square metre project recently started in the Buna Ziua area of the city, a 94 million euro project in Borhanci, The Dawney Day Atrium Centre project -90 million euro if I remember correctly, and another half dozen or so large scale projects (http: / /www .ziuadecj .ro /action /article?ID=6886 ).

So why does Cluj need all this development? The answer lies in the prediction that it’s population may rise from the current 350,000 or so to 2 million within ten years. At this point it’s worth noting that the majority of the increase in this population will be within the working class…not middle class professionals who will be significant drivers of development but numerically their numbers will not be large. One step in this process is the evolution of the Cluj Metropolitan Area whereby 18 local communes will be drawn into the Cluj city boundaries thereby enabling the city to obtain higher levels of European funding. Add to this the inflow of foreign investment and you have a classic example of political will and international business forming a strategic partnership.

Formation of the Metropolitan Area will bring the Cluj population to in excess of 500000. Go to http: / /harta .infoturism .ro /romania /Cluj /harta /harta _Cluj .jpg . To the west of Cluj find Gilau; go north to Bontida; east to Cojocna; and south to Aiton and Tureni…and then back to Gilau where the Transilvania Highway will flow into Cluj. That will give you a rough idea of the huge new metropolitan area. Many of these communes don’t have roads which give reasonable access to and from the city…they will need them if they are going to move forward from what for many is a rural style of life.

Linked to this Cluj City Council recently announced it’s key objectives for 2008. The city centre and semi-central neighbourhoods are badly congested. Multi-storey car parks, pedestrian subways and an underpass through the centre are on the agenda. Improved management and development or the airport are a priority possibly in partnership with a foreign operator…talks have in fact already been held with an Austrian company. A road around the city connecting Jucu/Rascruci with the highway junction at Gilau is noted as being essential and will probably connect up to the as yet unfinished fast road around the back of the city from Muncii out to Apahida and Jucu. This road may also service the large projects already mentioned on Lomb and Tinterului. By the end of the year it is hoped that this road will be completed and joined up with the Apahida – Valcele road onto the E 60 which has progressed well this last year. These roads are the arteries and the communes will want roads that are veins.

So the skeleton of the Cluj of the future is beginning to take shape. The north west and west of the new city will be it’s industrial area with a huge demand for affordable housing; the south areas of Faget and Salicea perhaps with west Lomb and Popesti in the north west continuing to become highly desirable places to live for those who like rural tranquility. As for the west of the city the communist new build disaster known as Manastur has already been duplicated last year by Floresti. Gilau – the next commune west of Floresti will be saved from such unplanned expansion simply because the two communes are intersected by high voltage electricity lines.

So where does that leave the central and semi-central areas of the current city? The historic part of the city continues to be beautified but the semi-central areas are essentially communist blocks and are beyond any process of beautification. I guess over time such buildings will be modernised; re-built; turned into offices and yet more commercial areas….but they will hold and increase their value simply because they are central.

It was reported the other day that the availability of viable large plots of land in Bucharest had dried up and as a consequence property investors will be moving their money elsewhere. It seems that it is already moving to Cluj which in any case is attracting huge foreign investment in industry as much as property. In today’s Nine O’ Clock News (http: / /www .nineoclock .ro /index .php?page=detalii &categorie=business &id=20080109 -511592 ) it is noted that property developers in Bucharest are now looking outside the city for affordable land. Favoured sites are those of old factories that have ceased functioning.

Cluj central prices are just as high as Bucharest and I can confidently predict that land in the centre will reach the 2000 euro psm mark in the spring. So – where to invest in Cluj in 2008? Owners of old factory sites know their development value and someone will pay the price. For large developers public/private partnerships are definitely on the agenda. Buying into cheap planning blight – Floresti – may seem a short term bargain but will probably be a long term disaster. Buy land or developments at the junctions of the arteries and veins (where the communes will link to the city and will have new developments on the doorsteps of their current villages) and you might be on to a winner. Buy on a hill with a view of the city and Transilvanian mountains that cant be blocked by a block the following year and you will have somewhere that is special forever. As Cluj expands the desirability of living in the centre will be shared by a greater number of people who will be competing for a home within the same few square kilometres so that ‘have to be in the centre’ factor will continue to push up the price. Buy anywhere….Cluj is so full of energy and money.

Charles Bell