WHAT WE DO

Black Sea Property Group’s main activity is trading and developing land on Romania's Black Sea coast.

We satisfy the vast demand for construction plots, either for future construction or for investment. To offer the best prices and services to our customers we buy large plots of (agricultural) land, parcel it into smaller plots and - if feasible - get construction permits from the local government.

After creating the construction plots they are typically sold to Romanian citizens or companies looking for a solid investment, a plot for a construction project or for a future home.

WHY WE DO IT

Since the early nineties several Eastern European countries have gone through a radical transition from a state controlled communist economy to a market economy. During such transitions fundamental market imbalances emerge offering unparalleled investment opportunities.

Rapid rise in income per person boosts real estate prices
One of the biggest imbalances is the income per person compared to other EU countries, as shown in the graph below.

To assist countries like Romania in catching up with the rest of Europe, the EU has put a dedicated policy in place for the poorest parts of the EU. The picture below shows that the average income in Romania is less than 50% of the EU average.

The support Romania is currently getting is more than substantial. In the period 2007 - 2013 a total of 19,7 Billion Euro will be invested in Romania in the form of Structure Funds and Cohesion Funds. Some 60% will be used for improving infrastructure.

All of the above is aimed at improving economic activity and increasing income of people. The relation between the income per person and the prices of real estate in a country has been demonstrated in academics and practice. Therefore the long-term upward potential of the income per person is an indication for the upward potential of real estate prices.

Real Estate is an excellent investment class
The new wealth that a lot of Romanians start to enjoy is often invested in real estate. Firstly because the highest priority for a lot of people is to improve their living conditions so they want to build or buy themselves a luxurious home. Secondly, mortgages have only become available in 2003 which unleashes a huge amount of capital for financing property and which makes ‘owning your own house’ accessible for millions of Romanians. And thirdly, real estate investments have proven very rewarding while saving accounts yield merely 5% at best with an inflation rate of more than 6% (2008 data).

The result is a huge demand for houses and apartments which is conservatively estimated at 400.000 units during the coming decade (see graph below). The demand for construction plots is a multiple of this as these plots are typically traded several times before the final construction is built on it.

Land investments are particularly interesting
‘Land’ is at the start of any real estate activity. The location and quality of the plot determines the value of any subsequent development. Therefore, the owner of the land holds a powerful position in the real estate business. In the dynamic Romanian market we’ve seen occasions of land prices doubling in a year with an average annual price increase of 25% being absolutely realistic in the last 5 years.

And what’s more, land is a ‘real asset’. Even in rough times the value might temporarily stabilise or show some decrease but the inherent value will remain.

Whether you want to buy land for construction or purely for investment, we believe this is an excellent moment to buy. The Black Sea Property Group specializes in selecting the best plots at the best prices on Romania’s coast. We might have the perfect plot available for you. Please have a look at our current projects.