Testing developer interest in the current climate

[totalcroatia]

Very few property threads these days, a sign of the times, but interested to get your opinions on the levels of interest of developers in projects.

I had a beer with someone today who has 2700m2 of very nice land here on Hvar, edge of village, front row of the zone and lovely view to sea and mountains (sea 800m away). After years of frustration with lanning (he bought in 2004), he now has the green light to get planning for 4 buildings on three floors, each 130m2 per floor.

A nice size project and just interested what your thoughts are on the level of interest from developers in something like this at a price with planning and taxes paid of in the region of 110-120 euro/m2. That would have sold in a shot 3-4 years ago, but where are we now re going into new projects?

[Madgolfer]

From our perspective around Zagreb, there are very few serious foreign developers getting back into the market at the moment and very few that plan to in 2011.

Well not in Croatia at least, many are now looking much further East.

Investors are slightly different however and we have seen a small but steadily increasing number of pro investors getting back into the market since mid 2010.

Land banking with a 5 year+ view seems to be the reason given in most cases.

[mambo]

I have 1000 m2 for sale on the Caribbean island of Curacao. Not 100 euro/m2, not 90 euro/m2, not 80 euro/ m2, just 75 euro/m2.
You will also get a building permit (has already been issued) and water is already connected.

In other words, it does not have to be that expensive. As long as everyone keeps telling all the others that 'real estate is cheap in Croatia'...........eventually someone will start to believe it, while in reality it has become extremely expensive.

[Madgolfer]

I hear that land is also cheap in outer Bournio, Upper Mombassa and Eastern Chinweny Yongting.

[Kaskader]

6000-15000 square meters of land in Donji Stupnik for sale, anyone interested . Less then 1KM from shopping centre Mercatone.

[Carol]

Hi Paul.
I know you know all this from your own experience but my thoughts would be that developers only invest when they believe that they can realise a profit at the end. So they would need to be able to build and then sell or let. Right now there are a few buyers around but they will not pay a premium for anything (why should they when there are bargains to be had?). The things we sell are low priced to begin with and the seller has to be flexible.
If I were a developer, I wouldn't go into a market like that. However we are well through the pain now and things could easily turn on its head in two or three years time.
If I were the owner of the property you describe, i'd wait at least a year (if he can) and then put it on the market. (I assume that he can renew the planning permission?)

[Madgolfer]

I have just returned from a trip to the UK, Ireland and Turkey where I was trying to drum up developer interest in various building/tourism projects in Croatia.

To say it was difficult would be an understatement, partly due to the current economic climate and part due to the perceived problems associated with "doing business" in Croatia.

It surprised me just how knowledgeable investors are about Croatia and equally how much interest in Croatia there is out there.

Currently there seems to be a good number of investors interested in land banking opportunities but very few in taking on any building developments for a few years yet.