Original Investment Summary - 22/11/2007
Prices starting from £55,881
- Ideal corporate-let opportunity to cater for the 15,000 workers expected to flood into the area as Pipera becomes Bucharest’s new business district
- A conservative prediction of a 45% return on capital growth by completion in 18 months’ time
- One of the first middle-class developments in the exclusive Northern district
- Gross rental yields predicted to achieve an average of 6.3%
City Lights is one of the first middle-class developments to be built in the prestigious Northern district of Bucharest, which has been dominated by luxury new builds.
It is right on the doorstep of the Pipera Business District, which is set to employ more than 15,000 people in the next 10 years.
Major employers at the site already include Vodafone, Renault, KPMG and Microchip, who are all reporting difficulties in finding suitable long-term lets for their new employees.
This is because there is very little new-build property in Pipera to cater for this emerging middle-class market. This supply/demand ratio is set to reach a critical point as very few developments have been accepted, with many being rejected until a firm decision is made on the new route for the planned Braşov Motorway.
The market in Bucharest is rising rapidly at a conservative 30% annual growth, although our deal finder, Simon Blakebrough, who has been out to Bucharest many times and visited the site, is predicting annual growth of 50%. This is because the demand is so high for new-build property in Bucharest, which is a city more densely populated than New York City.
Officially, the population of Bucharest is 2.3 million, but the true figure is closer to three million in a capital city that can easily fit inside the North and South Circular Ring Roads of London. Bucharest covers just 140 square kilometres (88 square miles), which is equal to an area of London from Brixton up to Golders Green, and across from Hammersmith to Poplar.
A long completion time of 18 months means investors can take full advantage of a rising market and staged payments to maximise their return on investment. With just a 10% minimum payment, investors can enjoy six months of capital growth of up to a predicted 50%, before they make their next payment of 15%. There is then another year before any mortgage has to be drawn down.
The average price of €1,131/sqm is a predicted 5.75% below the market value, according to an independent valuation, and we believe City Lights is currently the cheapest priced development in the area for a middle class, new-build project.
As property prices in Bucharest are growing at an exceptional rate, this development is sure to enjoy substantial capital growth.
City Lights Purchase Price Spreadsheet XLS
City Lights Purchase Price Spreadsheet PDF
City Lights Google Earth Link
City Lights Pod Cast
ES