IULIUS group is a leading developer and operator of mixed-use urban regeneration projects in Romania, with over 20 years of experience in real estate and with a presence in four major cities in the country - Iasi, Timisoara, Cluj-Napoca and Suceava.
You've been with Iulius group for many years now, what was your evolution in the company and what vision did you set forth as you became CEO?
Indeed, I've been with the company for more than 20 years now. Starting out I was working as a financial analyst, moved into the CFO position and now CEO of the group. On a day to day basis I handle all investment projects that we take on. Our vision is the same and hasn’t changed in these 20 years: we design and bring to life urban regeneration projects, connect them to solid infrastructure and overall create an improved quality of life across the cities we operate in.
How do the various segments you are active in contribute to the overall business?
Our most valuable segment is the office sector. At the moment, we own 13 buildings throughout Romania, which make available a total of 152.000 m² for rent. These buildings are located in major cities of Romania: seven can be found in Iasi, another three in Timisoara, and the last three in Cluj-Napoca. Most of these buildings are used by IT and financial companies. In the retail segment, we have a portfolio of over 300.000 m² in five projects that draw more than 68 million visitors every year.
However, what genuinely sets us apart and makes our projects successful is the urban revitalization mixed-use concept that we’ve specialized in, combining office spaces with retail, urban gardens and ‘walkable city’-type infrastructure.
The two projects of this kind that we developed, namely Palas Iași and Iulius Town Timișoara, are also the only ones in Romania. We are very proud of these projects, as they proved to be strong growth engines not only for our business, but also for the regions in which they are developed, by increasing the investment attractiveness, drawing some multinational companies into the country, retaining talent via job opportunities, a new manner of living and improved quality of life.
Location wise, you have been focusing your efforts in major cities of Romania, however, not the capital. Why did you think this was the better route?
We focus on cities where we already have a presence, all of them relevant financial and educational centers. The reason is that these cities possess all elements needed for a successful investment and they carry a great potential for growth. Such spots also need constant development, especially in the office sector. Palas Campus for instance is presently our biggest project and also the biggest office center in Romania. It’s an ambitious endeavor that will revitalize an underdeveloped central area of Iasi City. When finished, we expect it to generate around five thousand new employment opportunities for people based in this region.
This project is in the office sector, but it includes retail parts as well – a food market, service hub, and a place for local entrepreneurs. A garden is also being built like we’re used to doing with all our assignments. We plan to integrate the Campus into the city through major investments committed to the road infrastructure in the area, which will help increase overall connectivity and accessibility. A subterranean parking center is also being constructed, to accommodate all the people who’ll work here. The value of the whole project is more than 120 million EUR and it’s expected to be finished by the end of 2022. We started the construction in the midst of the pandemic, but everything is going well and according to plan.
Congratulations on keeping everything on track. From a financing perspective did you find it easy to secure the needed amount?
We work very efficiently with our banking partners, so they answer all our queries and potential project pitches. The process of getting such a huge project financed is of course more complicated, but we have a specialized team that works together with our bank to get the needed funds.
Seeing that you are active in the office and retail segments, how did the global pandemic impact your business and what did you do to maintain a good balance?
Our activities were affected, of course, but we managed to keep things in check by discussing openly with our partners and tenants. This way we were able to figure out ways so that we all remain stable. On our side, we supported tenants by reducing taxes, offering marketing materials needed during these times and by reducing running costs.
Overall we managed to close 2020 with a 1% vacancy rate for our five projects, which is extraordinary. We also signed new contracts during the pandemic, over 50 new partnerships, which shows that our tenants trust our services. One thing that we were particularly happy to see was that our public gardens became main spots for social life in urban environments during this time, another proof that we approach our projects from the right angle.
What are your objectives for the next 2-3 years, do you have any intentions to expand internationally for instance?
Just now we have our eyes set on our new Family Market projects, a customized retail concept for fast-growing communities. We have already started the construction works for the first two Family Market projects in Iasi County, set for completion by the end of 2021. The projects are valued at around 16 million EUR and each will consist of a supermarket and a suite of connected services and relaxation facilities. International expansion is not in the cards just yet, the Romanian market is ideal for our business so the intention is to keep growing here.
What is your message for potential investors who are interested in the Romanian real-estate market?
International investors should definitely include Romania when prospecting the European market for new opportunities. I'm optimistic about what the future holds, the potential is still incredibly high and the market keeps growing every day.
