Professional demands catch up with the market

In a booming environment like real estate, success becomes less a matter of "luck" and more a result of experience and professionalism.

In the absence of a proper educational system for the people in this industry, the Romanian market has regulated itself with the help of the know-how and of the deontological code brought by foreign investors. The British standard is among the most important such standards, with its tradition and international reputation.

Royal Institution of Chartered Surveyors - RICS - is an important reference for real estate specialists, numbering about 140,000 members in more than 120 countries. The institution sets quality and professionalism standards for everything that pertains to the real estate business.

"The RICS standards (through the Red Book of Valuation Standards) and the Code of Ethics have to be observed by all our members, wherever in the world they might be conducting their business," says Anna Orcsik, co-ordinator of RICS Central & Eastern Europe. "In Central and Eastern Europe, Poland was the first country where we established a local association, followed by Hungary and the Czech Republic."

The number of specialists in these countries that have already received RICS qualifications (MRICS - Member of RICS or FRICS - Fellow RICS) has exceeded 250.

"Our voice is heard louder and louder," Orcsik continues. "RICS standards are being applied by more and more professionals. We are now preparing for entrance in Russia, by opening an office in Moscow."

Interest in Romania is rising, with the institute set to organise an event in Bucharest in the second half of the year. The event - Final Assessment, is part of a process whereby professionals can sign up for specialisation courses, the official adds.

For the time being, appraising a property in Romania under RICS standards is not mandatory, explains Charlie Henry, associate director capital markets of Jones Lang LaSalle (JLL) Bucharest and holder of the respective qualification. Some banks may demand it, though, depending on the deal.

"RICS is no longer a British standard only, it has become European and global," he points out. "The institute has tried very hard since its beginning in the eighteenth century to build an international set of standards for the real estate industry, a field that became

pan-European. Investors and developers need warranties that, when they invest or buy projects, every participant will comply with the same set of rules." 

RICS is so important in Britain that, although the qualification is not mandatory for the real estate business, the lack thereof limits the range of options on the market for a specialist. And that is even though the British university curriculum includes professional real estate classes.

Graduates looking to obtain a RICS certification go through a two-year training period, during which they attend seminars, classes, work in the specialised departments of a company in the industry and take a final exam/ interview about all things real estate.
"The trouble in the CEE region is the complete lack of official real estate training. It is understandable, considering the relatively short history of the industry," Charlie Henry says.

The real estate boom, however, is putting pressure on the need for professional qualification.
"Experience is, obviously, the key element," Anna Orcsik says, "but the RICS qualification is an important criterion when working with foreign investors. It is also the reason why we are witnessing a growing interest on the part of professionals in Romania."

There are about 20 active RICS members on the local market, she adds, in addition to the ten that signed up for an accredited course.

Compared with the estimated number of 10,000 active real estate agents in Romania, however, the figures are hardly impressive. The industry is on alert now, after the accession. Last summer analyst Radu Zilisteanu warned that 60% of those active on the market might find themselves without a job on

Those concerned may regard this as an opportunity, if taking into account long-term benefits.
"The company that hires a RICS member gains access to international business opportunities, while the employee increases his or her professional and material opportunities a lot," Anna Orcsik explains. "According to a survey we did in 2007, RICS members in Europe make 8-35% more than their colleagues who do not hold such a qualification."

Romania, a must have on the CV
To Brits, as well as to every other foreign national in the business environment, working in Romania is as much a business opportunity as it is a professional opportunity.

"Historically, British investors have been attracted to emerging real estate markets in Eastern Europe, because profits here exceeded those on mature European markets by far, Britain included," Mark Mannering, MRICS and director of King Sturge explains. "Romania represents the next natural progression towards the East as far as real estate speculations and developments are concerned. Accession has made it more attractive."

King Sturge opened its office in Bucharest early in 2006 and provides valuation and research services, as well as investment, property and asset management, project management consultancy and construction services. The company is present in 17 countries in Europe, where it has more than 50 offices.

"As we are relatively new in Romania, we have not had any major professional experiences so far," Mannering says. "We are, however, involved in several new interesting projects that could transform the years to come into a significant period for my career."

Similarly, JLL's Charlie Henry came in Romania confident he would become part of something great He joined the team in Bucharest three months ago, after having spent one year with JLL in Hungary.

The Romanian market is much larger and interesting, he explains. "Hungary does not have many cities of more than 100,000 inhabitants and current real estate developments are largely focused around the Capital. Romania, on the other hand, is a window of opportunity, with at least 25 cities of more than 100,000 inhabitants, where two or more shopping centres - my field of work, are already built or underway. It is extremely interesting to take part in such a development, particularly because some of the projects developed in smaller cities will be quality projects."

Power of example
John Houghton, property director of Mivan Development, says there are about 3,000 British business people in Romania. The community is active both in business and socially, as it is involved in many events organised by the British-Romanian Chamber of Commerce (dinner parties, balls, business meetings etc.).
The most important place to keep in contact remains the work place.

"Being involved in various land acquisition deals, in a country with a different cultural and legal framework, I have had the opportunity to work with highly professional people. Our Romanian partners have always performed their share of the project very well," Houghton says.

The basis of any long-term relationship, he adds, is that partners should know and trust each other, a criterion that is essentially what might be called "the British approach." "We like to think that we can help Romanians think ahead.

Some of the few problems we have encountered here are poor organisation and lack of punctuality."
Six years of work in real estate later, JLL's Charlie Henry says businessmen in the United Kingdom always pay attention to details, analyse strategies patiently and never make an impulsive decision. They are more calculated and pursue long-term value and revenue.

King Sturge's Mark Mannering says this quality could also be a flaw.
"Brits and Romanians could teach each other how to manage," he laughs. "The cautious approach the former show in business should be taken into account, but at the same time we could borrow a bit of Romanians' appetite for risk."

Another strong point of the UK partners is transparency.
"Brits are open, direct and sincere," Henry says. "They don't have a hidden agenda - not that the people of a different nationality had one. It is a matter of cultural differences. We are used to transparent markets and with providing clear information."

This is exactly what the market in Romania should understand and apply, he adds.
"The exchange of information benefits all parties involved and eventually increases the quality of services for the client. The lack of transparency affects the flow of foreign direct investment and the liquidity of the market." 

QUOTES
"According to a survey we did in 2007, RICS members in Europe earn 8 - 35% more than their colleagues that do not hold this qualification." Anna Orcsik, co-ordinator, RICS Central & Eastern Europe

"In the current cross-border transaction context, the historical origin of companies is less important. What matters today is the place where the company set its headquarters." Charlie Henry, associate director capital markets, Jones Lang LaSalle Bucharest

"The British investor is more pragmatic in approaching business, especially in the real estate sector and is, by nature, as could be expected, more cautious than the investors that have been active for a longer period of time."
Mark Mannering, director King Sturge

"British investors generally have a good reputation in terms of professionalism and business ethics. They are true pioneers in the business environment and apply a phlegmatic approach to problems."
John Houghton, property director, Mivan Development

The wave of real estate investments in Romania undoubtedly started from the West, with the Austrian and British investors at the forefront. The two sides are now vying for supremacy on almost every segment.

Investment funds like Immoeast, Europolis, Fabian Romania Property Fund and Equest Balkan Properties (EBP) are the leaders in terms of acquisitions portfolio, which exceeds two billion euros put together.

EBP controls investments worth around 160 million euros (Bucharest West Logistics Park, Domenii Office Building, Jules Michelet Office, Moldova Mall - Iasi, Vitanitis Retail Park, Casa Moşilor Office, Otopeni Office, Europark Car Park, Modul Shopping Center - Targoviste).

In turn, Fabian Romania Property Fund has a 70 million-euro portfolio, accounting for some 70,000 square metres of office space in the Capital, as well as residential projects in Bucharest and Timisoara.

Separately, British investment fund Teesland IOG bought A1 logistic park of Cefin Real Estate for 70 million euros in the spring of 2007. Early this February, the two companies announced they would allocate 200 million euros to develop industrial parks in Romania.

Also last year, European Convergence Property Company, a fund controlled by British Charlemagne company made its first exit, selling to DEGI, the real estate division of German Allianz Group, the Millennium Business Center, PGV Tower and Construdava buildings. The value of the deal was 110 million euros.

The Brits are also well represented on other segments of the real estate market, too: consultancy and brokerage (DTZ Echinox, King Sturge), development (Dawnay Day, Willbrook Management, Modus Properties, Westhill, European Future Group), project management (Gardiner & Theobald) and personal investments (Prince Charles of Wales).

articol scris de Ana-Maria GAVRILA -