Anglo-serviette relations

Seven years ago, uk businessman Michael Lloyd chose Romania as a business destination. Since then he, along with a few Romanian partners, has launched a giant real estate project in Băneasa. THE Strategy manager of Băneasa Investments drew up the IDEA on a restaurant napkin. NOW IT IS A DEVELOPMENT valued at EUR 3.5 bln

Matei Roman, ‘Eurobuild CEE’: Michael, you are always smiling. How happy are you with your project and the profits it’s generating?

Michael Lloyd, strategy manager Băneasa Investments: It’s a little early to talk of profits, Băneasa will develop in time. We have five to ten years and we are not under any pressure. We are developing a scheme which has been unknown in Romania until now. We have estimated the value of the project at completion to be around EUR 3.5 bln with the investment close to EUR 1.8 bln. So we are hoping to make lots of money from it.

MR: Such a huge project must require a close relationship with the local authorities?

ML: Now it’s ok, but seven years ago when we came up with our development strategy and told them “we’ll invest more than EUR 1 bln in the scheme”, their question was: “Well, where is the money?” Of course, we didn’t have it and they replied that we couldn’t possibly be serious then. How silly that was – assuming that I and my partners would just take EUR 1 bln out of our pockets, there and then. Come on! But it was simple, finding an opportunity and going to the banks to get the money. After all, real estate development means using other people’s money. Anyway, now things have changed – especially as the authorities have realized that we’ll generate massive earnings for them in taxes. The process wasn’t easy. I remember when we took Bucharest’s chief architect of the time to MIPIM, he was there for 20 minutes and then went shopping… for three days. Well that’s taking your responsibilities seriously.

MR: What’s happening at Băneasa now?

ML: Last year we focused on the construction of the project started three years ago. Not only building the offices, the residential and retail parts of the project, but also the infrastructure and surrounding environment. We have completed 30,000 sqm of offices, and this month we hope to complete the shopping centre, so we’ll deliver close to 100,000 sqm of retail space on to the market. We also have 251 homes finished, and we’re working on what will be Băneasa Motor City, a huge car showroom. Moreover, we’re changing the master plan for the office side of the project to increase its density, due to the current high demand for offices space. In the spring we will start work on another 600 homes, and in the next two years we shall finish a further 150,000 sqm of the 1 mln it will ultimately have.

MR: Were you confident or just crazy when you came up with the idea?

ML: Confident I think, rather than crazy. The great secret of Băneasa is that we have a master plan for everything. Ok, so we change a few things now and then, but the basic idea stays the same. Moreover, we’ve conceived it in a way that allows us to build one apartment or one office building at a time, so we can watch the market and react to what is needed. Whatever is right for the market, we can supply. We didn’t start by digging a big hole in the ground and pouring lots of cement in it; our strategy was and still is more flexible. We won’t spend millions of euros before we know exactly what we are doing there. By not being flexible you end up spending a few hundred million euros before you get some revenues back. This isn’t the case with our project.

MR: What are your plans for the future?

ML: A long, long vacation. But remember – this project will grow for ten years, so we will continue to be very busy for a while yet. We are watching the market, but who knows what is going to happen in five years from now? Anyway, we shall probably develop in Bucharest, but when or where I don’t really know.