Early morning stimulation

This small contribution has been stimulated as a result of a lengthy discussion this morning with the Regional Manager of World Class Health and Fitness Centres (www.worldclassfitness.net ) which is an international Fitness Centre chain with its parent company being based in Sweden.

As a person he was interesting..aged somewhere between 30 and 35….having started as an instructor in one of the Bucharest clubs and worked his way up the internal promotional ladder to his current position. He had worked for World Class in Amman, Abu Dabi and Tangier. Now he is responsible for World Class in Romania, Bulgaria and Turkey. Another bloody brilliant Romanian….bloody being a word he himself had picked up having had substantial contact with Brit expats such as myself!

He advised me that Romania was the growth country for World Class over the next two years with in excess of thirty Fitness Centres planned to be opened the next two being in Iasi and Suceava.. World Class didn’t have to go onto the market to find prime locations. Malls and hotels approached World Class offering very favourable terms….but the key issue for World Class was location, location, location! The Regional Manager explained that many offers put to him were rejected because locations were not in what he perceived to be neighbourhoods where a growing customer base was not evident.

Timisoara was a problem and a monthly payment scheme had to be introduced. Constanta didn’t generate much revenue. The centre in Cluj had made an excellent start with particularly impressive numbers when it came to corporate membership. Bucharest demand, I was told, was phenomenal...with customers being prepared to cue for up to 45 minutes just to get a locker key!

Location and good value

When you buy property in the UK you select and apply certain criteria and do so with reasonable confidence. But when investing abroad especially in a rapidly developing environment your ‘need to know’ is even greater.

So how does good value translate for aspiring Romanians? Proximity to work and good transport links is high on the shopping list as is local availability of a supermarket, doctor, pharmacy etc. High quality finish and use of quality materials are appreciated. Access to green areas and leisure facilities are also increasingly important. Add to that security and privacy and you just about have it.

This all has to be balanced against affordability and both in Romania and the UK family incomes vary enormously.

A perspective of Cluj

Jucu to the north of the city has the advantage of being a clean sheet of paper with the opportunity of logical development incorporating the appropriate blend of residential, commercial and hi-tech new construction. Property values are likely to be governed by the salary packages offered by international companies to skilled labour over which there will be much competition. A competitive labour market can help push up property prices.

To the west of the city Floresti offers a range of prices some extremely cheap as a result of overdevelopment. However these are prices that many Romanians can afford and they are prepared to live on the biggest construction site in Romania for the next few years. Prices will rise of course once the traffic is flowing in and out of the city via the Transilvania Highway. Floresti is actually adding a lower middle class to the property owning ladder.

Central areas are and will remain extremely expensive with prices expected to reach 2000 Euro psm when spring comes. Theme developments are also attracting a lot of interest and high pre-sales volumes. I wont bother quoting prices.

Prices for land in the classical area of town, Muresanu, can be as high as 700 Euro psm (without certificates) - 500 sm with 25 metres frontage - which is reflected in the price of wonderful villas, both ancient and modern. A modern two roomed apartment on the open market can be acquired for 2375 Euro psm. That makes the price of land look a bargain!

The new middle class live in neighbourhoods such as Buna Ziua. A two roomed apartment of 60 sm built in 2005 can be purchased at 87000 Euro or 1450 psm.

Manastur is interesting in the main comprising the new build area of the city when Ceascescu moved large numbers of workers here. The neighbourhood is very densely populated and is mainly communist blocks with recent extensions in the Campalui area(where some mains utilities are insufficient for demand) and now in Faget Valley. I Ceascescu's Manastur a third floor flat of 42 sm in an eight storey block built in 1988 is on the market at 76000 Euro..over 1800 Euro psm! A second floor apartment of 96 sm built in 2007 can be purchased at 135000 Euro. Are Romanians becoming British and adding value for architectural heritage?

Faget is one area which will be close to British hearts. Faget to me is like those small forested areas of hardwood trees up and down the valleys of South Devon with views of Dartmoor on the horizon and a metropolitan area such as Exeter or Torbay not so far away. For Dartmoor read the Gilau Mountains capped in snow until early June and for an urban city it is of course Cluj.

Faget is actually a botanical garden on a city’s edge. If you can afford to buy land you can now only build on 10% of it – a restriction introduced two years ago. Cluj wants to preserve its trees and its links with nature. To buy a villa of 130 sm total area on a 1000 sm plot you are asked to pay 295000 Euro. Not also that last year Tulip Inn invested in a state of the art hotel in the heart of the forest.

New build prices are discounted in relation to the re-sale market. So the question is where is the ideal location for 2008? Opportunities in Marasti close to the economics faculty and the Iulius Mall have probably gone. Jucu is no longer a secret but has enormous potential.

An Anglo-Romanian analysis would suggest locations which have the facilities of a city but are close to or located in green areas with a view. Lomb is a wonderful area on a hill with a view across the city but nothing is as yet built.

With Cluj spreading out to incorporate Floresti there are some very selective developments behind the commercial area that features the Polus Centre. Close to Manastur will its well developed services and having excellent transport links into and around the city a new city village which I shall call Faget Valley ticks most of the boxes for British and Romanians alike.

You might not have the World Class Fitness Centre on your doorstep but in a few weeks time you will have the buds appearing on the trees; birds busy nesting to give birth to their young; torrents of water cascading down the river valley as the snows start to melt…all those things that are close to the heart of a Romanian and an Englishman.

Charles Bell



NB Prices quoted have been sourced from the website of a leading Cluj estate agent.