Ion Iordaki
Experts predict that investors who face a slowdown in the construction of residential real estate in Moldova have a prospect. Due to price growth, investments in residential real estate may become less attractive compared to the construction of industrial or logistics facilities.
All the more so because the state under the state aid scheme can return to entrepreneurs half of the investments made in such strategic areas as pharmaceuticals, production of components for the automotive industry, agrarian, food, furniture and textile sectors.
This was discussed on September 16 during the fifth edition of Moldova Real Estate Forum. It was organized within Moldova Business Week with the participation of representatives of state authorities and development partners, foreign investors and local entrepreneurs. This year, the organizers of the event focused on investments in logistics and industrial real estate.
According to the information of the Ministry of Economic Development and Digitalization, voiced at the forum by Vice-Minister Viorel Garaz, 22 projects worth 2.3 billion lei have been financed within the state aid scheme.
The support from the state and international financial institutions – EBRD and IFC (International Finance Corporation – a subdivision of the World Bank Group) was discussed during the discussion on regional trends. Emphasis was placed on industrial real estate and logistics. “We analyzed how this cooperation can influence the process of attracting private investments in real estate,” says Alexandru Gozun, president of AmCham Moldova, who led the discussion. – How the state can help with targeted policies and incentives, including initiatives on logistics hubs, industrial parks, etc.”
Such initiatives are designed to generate private investment from other industries around them. These are drivers of growth and development not only in real estate directly, but also in other industries. We talked about the tools that the EBRD and IFC can currently provide for Moldova. And about the experience of these financial institutions in Romania and Ukraine.
“Today, the question is how we can channel investments from Romania to Moldova, taking into account these possibilities, as well as the assistance of the state,” he continues. – Including the clients of these financial institutions that are already operating in Romania. For example, participants mentioned Iulius Mall, a group that develops large projects in Iasi (Romania), such as Iulius Mall and others. Or Nepi Construction Group, which specializes in the construction of office complexes, particularly for the IT sector.
Alexandru Gozun noted that taking into account the current situation with the growth of tax burden in Romania, a more attractive tax regime for the IT sector in Moldova may encourage companies in this field to move their offices to our country. Of course, we have a problem with resources, but this is another part of the discussion. In any case, all these issues can be considered in a regional way. Using not only Moldova’s potential, but also Central Asia, for example, Uzbekistan. Because the IT park of Uzbekistan holds its presentations in Bucharest. We can take advantage of mutual interest and, taking into account our tax regime and the difference with the EU, create the necessary infrastructure here. Because the conglomeration of companies that make up their community are offices, technology, data centers, social infrastructure. Here is an example of how it can work if you connect all the possibilities in the right way. This is just one industry, although we can talk about others. Alexander Kosovan, representative of the EBRD, informed about the projects that the bank finances in the hotel business and in the HoReCa industry in general, they also support retail.
As for the government’s assistance, it can help with land and connection to electricity, water, road infrastructure and others. Because a data center can be located not in the center of the city, but on the outskirts.
“Since now there are preparations for negotiations on Moldova’s accession to the European Union, it will be difficult to negotiate about tax benefits,” notes Alexandru Gozun. – But there are other potential opportunities for the state to support investments – administrative and financial. There is a need for financing schemes for industrial development projects with co-financing from the state. Even if it is a small amount, it is important for the decision to invest as a sign of its interest”.
“Before the war, our companies used the port in Odessa, today it has been replaced by the port in Constanta, but the port in Giurgiulesti can also become a new gateway for them,” says Ion Iordaki, head of the Association of Real Estate Developers and Investors of Moldova. – And the logistics center in Beresti (near Ungheni – ed.) is interesting as a dry terminal. During the reconstruction of Ukraine, companies will be able to use its services, and Ukraine itself will bring products to Europe by rail”.
The forum also discussed opportunities for Moldovan companies to participate in this process. According to Ion Iordaki, in this context we can also consider the Mărculesti airport, which, like the center in Beresti, is waiting for investors.
“As for the production of goods, cement and reinforced concrete constructions, which are produced here, could be a good business opportunity, if it were not for the duties. In this sense, Moldova has to negotiate. But our construction materials have high production costs, so they are more expensive than those of our neighbors, so it is hardly possible to compete. As well as in projects to attract Moldovan builders. We are not competitors of Turkey, for example”.
Chisinau City Hall and the Public Property Agency announced some upcoming tenders. “The glass factory is interesting in this respect, because it is a specific product and there is a shortage of it, so we have a chance. Another investment opportunity is hotel construction because there is demand for three and four star hotels. Now investors are waiting for the end of the elections,” Iordaki concluded.
