VALUATION REPORT

Transcription

VALUATION REPORT

VALUATION REPORT
Arad / December 2011
Valuated Property:
Real property - plot of land, located within the built-up area
Location:
Calea Victoriei No 33-35, Arad, Arad County
Date of Valuation:
December 31st , 2011
Performed by:
SIGMA BUSINESS CONSULT S.R.L.
8 Dr. Lister Street, Bucharest, 5th District - ROMANIA
Tel / Fax: 021 – 335.23 36
[email protected]
PDF processed with CutePDF evaluation edition www.CutePDF.com
VALUATION REPORT: TIMISOARA LAND, TAGOR PROPERTIES
1. EXECUTIVE SUMMARY
BENEFICIARY:
S.C. TAGOR PROPERTIES S.R.L
OWNER:
S.C. OBERON EQUITY S.R.L.
VALUER:
EUGEN BREAZU – VALUER, ANEVAR MEMBER,
Identification Card No. 3833
VERIFIED BY:
MARIAN ŢUŢUI - TASK MANAGER, VALUATION
DEPARTMENT, VALUER, ANEVAR MEMBER,
Identification Card No. 9188
OBJECT OF VALUATION:
Real property – plot of land located within the built-up area in
the total surface of 70,075 sq. m, located in Arad County, Arad
city, Calea Victoriei no 33-35
PURPOSE OF VALUATION:
Establishing the fair value of the real estate
PROPERTY RIGHTS APPRAISED:
Fee Simple Estate
DATE OF VALUATION:
31.12.2011
REFERENCE EXCHANGE RATE:
4.3197 lei/Euro
ESTIMATED MARKET VALUE
Real estate property located in Arad City, Calea
Vistoriei no. 33-35
The direct comparison method
S[mp]
7 0 ,0 7 5
Total Value
[Euro]
1 2 ,2 6 0 ,0 0 0
Value
[Euro/sq. m]
175
MARIAN ŢUŢUI - TASK MANAGER,
VALUATION DEPARTMENT
EUGEN BREAZU – VALUER
The contents of this Valuation Report are confidential, therefore they are not to be partially or totally reproduced or
disclosed to any third party, but the provider and the beneficiary to whom the report is addressed.
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2. INTRODUCTION
2.1 Scope and object of the valuation
Valuation object: land within the built-up area registered in Land Book as follows:
• 69.197 sqm, registred in Lanb Book 54971 Arad, topographic no. 13773
• 785 sqm, registred in Land Book 77385 Arad, topographic no. 3104/a/1/3/a/7/1/2;
3104/a/1/3/a/7/2 /a/2; 3104/a/1/3/a/5/9/1; 3104/a/1/3/a/62/1
• 93 sqm, registred in Land Book 77078 Arad, cadastral no. 13171
The valuation is an updating of the value at the date mentioned in the report, provided that the
undersigned has previously valuated the same real property.
The results of the previous valuation:
• Valuation aim - financial reporting
• Valuation date: 31.12.2010 - 1Euro = 4.2848 lei
• The value resulted from the comparison method: 175 Euro/sq. m
The elements from the previous report are to be found in what follows, the changes from the previous
situation being signaled, especially those that have influenced the value variation in their time interval.
The valuation aim remains the same - determining the fair value for financial reporting:
The fair value represents the amount for which an asset could be willingly exchanged or a debt could
be deducted between the two parties with full knowledge of the facts, within the frame of a transaction
with an objectively determined price. (IAS 16, 6th paragraph).
Market value. The amount estimated for which a property will be exchanged at the valuation date,
between a determined buyer and a resolute seller, within the frame of a transaction with an objectively
determined price, after an appropriate marketing activity in which the involved parties have acted with
full knowledge of the facts, cautiously and without constraint (IVS 1, 3.1st paragraph 3.1).
The terms market value and fair value, the way they constantly appear in accounting standards are,
by and large, compatibles, even though they are not always total equivalents. The fair value, as an
accounting concept, is defined in the International Accounting Standards and in other accounting
standards as being the amount for which an asset can be willingly transacted or a debt can be deducted
between the parties who have full knowledge of the facts, within the frame of a transaction with an
objectively determined price. The fair value is generally used for financial reporting not only of the
market value, but also of the non-market value. When one can establish the market value of an asset,
this value will be equal to the fair value. (IVS – Concepts and Principles, 8.1st paragraph)
Within the International Valuation Application Standard 1 (IVA1), according to IAS 16 and IAS 2,
the following specifications regarding the valuation activity for valuation reporting are being made:
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“5.4 Valuations according to IAS 16
When an entity chooses the revaluation based on the fair value, according to IAS 16, the assets are
included in the balance sheet at the fair value, as follows:
a) „The fair value of land and buildings is generally determined by the record data on the market,
through an evaluation made by qualified professional valuers. The fair value of tangible assets is,
generally, their market value, determined through valuation” (IAS 16, 32nd paragraph).
b) „If there is no market data regarding the fair value, on account of the specialized nature of the element
of tangible asset, and if the element is seldom sold, except the case in which it represents part of a
continuous activity, an entity might need to estimate the fair value, by using an income approach or by
the net depreciated replacement cost” (IAS 16, 33rd paragraph).
5.4.1 IVSC considers that a qualified valuer should report the assets market value when he performs a
valuation with this purpose (financial positions). Any hypotheses or opinions expressed in the application
of the market value must be discussed with the representatives of the entity and must be included in the
report.
5.4.2 The valuation conclusion must be reported according to IVS 3, International Valuation Standards,
8th edition of Valuation reporting. The valuers must ensure themselves that the valuation reports, which
were made with a view to draw up the financial standings, contain enough data, according to the
requirements of IAS 16, 77th paragraph:
a) the revaluation comes into force date
b) if an independent valuer was involved (Note: according to IVSC interpretation, this is an external
valuer)
c) significant methods and hypotheses applied
d) the extent to which the assets’ fair values have been directly determined, by referring to the prices
which exist in transactions made on an active market or in recent impartial transactions, or they have
been estimated by using other valuation techniques
Valuations according to IAS 2 –Inventories
“Definitions:
6. The following terms are used in this standard, with the meanings specified below:
…
Net realizable value is the estimated selling price of an asset in the normal course of business, less the
estimated costs to complete its production and necessary to conduct the sale.
Fair value is the amount by which it can be exchanged an asset or a liability cancelled, among
stakeholders and duly informed, engaged in a transaction at arm's length.”
This valuation is made in accordance with the International Valuation Standards in force, out of which,
taking into account the valuation aim, mainly with IVA 1 - Valuation for Financial Reporting.
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2.2 Value acknowledgement
• The following Valuation Report was performed by Mr. Eng. Breazu Eugen, Valuer, ANEVAR
member, Identification Card No. 3833.
• The valuer is acting as an External Valuer, having no recent or future interest in the valuated property.
• All data and information used in the Valuation Report are true and accurate and have been verified by
the valuer, when possible.
• All analysis, opinions and conclusions of the report are personal and limited by different assumptions
and specific restrictive conditions, and are not influenced by any moral or financial obligations.
• The valuer undertakes to preserve the independence and integrity in carrying out the valuation report.
The amount which represents the payment for the drafting of the report, paid by the Owners, has no
relation to the declaration of a certain market value or a range of values of the property plot which
favors the Owners.
• The valuation has been performed in accordance with the Deontological Code of the valuer’s
profession and with the International Valuation Standards, 8th edition. The beneficiary has agreed on
the content of the Report.
• The Valuation Report was verified by Mr. Marian Ţuţui, Task Manager, Valuation Department - S.C.
SIGMA BUSINESS CONSULT S.R.L., valuer and ANEVAR member, Identification Card No. 9188.
• The company SIGMA BUSINESS CONSULT S.R.L. is an associated member of ANEVAR, the
National Association of Romanian Valuers, with the Identification no. F09/0229.
• Since 2006, SBC has been a recommended valuation company for BRD Groupe Societe Generale.
• Up to the present, the number of valuation reports has reached a total of 1,500. These reports refer to
buildings, pieces of land, commercial centers, office spaces, warehouses, dwellings, etc.
2.3. Inspection date and effective valuation date
The documentation for valuation was made between 15.12.2011 - 31.01.2012, interval in which the field
inspection was also performed. The inspection was made without the participation of a representative of
the company which owns the property right on the real property, since we know the land from previous
visits .
Value estimation date: 31.12.2011
It is mentioned that the result of the valuation is prone to variation on the real estate market, making it
valid for a limited period of time (usually 3 months).
2.4 Assumptions and restrictive conditions
The valuer assumes whole responsibility regarding the opinions he provided in this valuation report.
During the elaboration of the Report, several hypotheses and restrictive conditions were considered, as
follows:
• The valuation is made, assuming that the property is not entailed.
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•
•
•
It was assumed by the valuer that there are no hidden or unknown property conditions which may
change the value of the property. The valuer declines his responsibility regarding the existence of the
above mentioned conditions, or regarding any necessarily professional investigations in order to
reveal such conditions.
No investigations were performed in order to determine whether soil contaminants are present on site
or not, so we are unable to confirm that the valuation is free of risk on this regard. Therefore, for the
purpose of the valuation, it was assumed that there are no soil contaminants on the property, which
could pollute the environment and diminish the value of the property.
Any value estimation from this report is related to the valuated property, as a whole; any splitting of
the property (not mentioned in the report) or partial rights on the property would invalidate this value.
It was assumed by the valuer that all data and information are genuine and accurate.
It was assumed by the valuer that the property is well hold and managed.
The valuer will not be asked to offer subsequent support regarding the valuated property or to testify,
unless previous arrangements were made between parties.
The content of this Valuation Report could be reproduced, partially or as a whole, in other documents,
circulars or statements. S.C. SIGMA BUSINESS CONSULT S.R.L. and its valuer are not responsible
to the beneficiary or any third party if, by publishing this report, prejudices should occur to them.
This Valuation Report does not contain investment suggestions, therefore, neither the valuer, nor the
company S.C. SIGMA BUSINESS CONSULT S.R.L., are responsible for any prejudices occurred to
the beneficiary, or other third party, following the use of these data as investment decision.
Additional assumptions:
Since the assessed land includes several distinct parcels regarding cadastral numbers, the pieces of land
should be considered as a compact plot. Missing parcels (of small size) will not change the above
hypothesis due to the fact that the entire property can be formed around the big plots and the small sized
parcels don’t count too much. Also, it has to be specified that it is possible to compact the valuated land,
but the decision belongs to the property owners. The compact land is the acknowledged type, recognized
by the real estate market, following the logic that separate lands were acquired by the same entity.
2.5. Highest and best use appraisal
The “Highest and best use” is a market concept.
Through “Highest and best use” analysis of the valuated property one can indentify the most competitive
and profitable use.
In accordance with the International Valuation Standards, the “Highest and best use” concept is defined as
“the most probable use of a property which is physically possible, appropriately justified, legally
permissible, financially feasible, and which results in the highest value of the property being valued”.
Physically possible
The valuated property could have multiple uses, but as the market states, as market data shows, the microzone specific aims towards the residential sector, collective or individual.
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Probable use
It is the valuer’s opinion that the specific of the area could change in the near future, and the investments
that could be made on the land subject of this report could only have a residential or commercial use. For
this reason, the “Highest and Best Use” will be limited to the above considerations, regarding the use of
the property.
Legally permissible
At this moment
• The Certificate of Urbanism (CU) for the PUZ and Master Plan purpose was issued on October
19th 2010 and it is valid for 24 months.
• PUZ approval decision dated on 28 April 2011
Financially feasible
By analyzing the above facts and, also, by applying the appropriate justification filtration, the valuer
considers that the best use of the property, in the near future, is collective residential estate, and this is
because there are mostly developing residential ensembles in the area.
3. DESCRIPTION OF THE SUBJECT PROPERTY
3.1 Location. Main characteristics
The real property, i.e. the property subject of the present valuation report, is represented by two adjacent
plots of land, which at present is free of buildings, ready for develpment. The property is located near the
administrative and commercial centre of Arad City.
As defined by investors, the area is adjacent to the business center, i.e. the administrative and the
economic center of the city. It constitutes the direction to which the business center and those related to it
can extend on account of the supersaturating and the crowding of the downtown.
Main characteristics:
• Traffic area, with intense traffic on the main road;
• Easy access;
• Vicinity: “Alfa” Residential neighborhood and Confectii area;
• Utility networks at the property limit: electricity, water, sewage, gas, from the city’s networks.
3.2 Juridical status of the subject property - ownership rights
The ownership right of the valuation arises from the following sales agreements:
• Sale – purchase agreement no. 744/ 09.07.2007
o Contracting parties: S.C. ARIS S.A., located in Artileriei Street no. 1, Arad, in capacity of
Seller, and S.C. OBERON EQUITY S.R.L., located Sos. Kiseleff no.11-13, 1st District,
Bucharest, in capacity of Buyer;
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•
Sale – purchase agreement no. 737/ 09.06.2007
o Contracting parties: S.C. ANCOR CONFEX S.R.L., located in Calea Victoriei no. 33-35,
Arad, in capacity of Seller, and S.C. OBERON EQUITY S.R.L., located Sos. Kiseleff no.1113, 1st District, Bucharest, in capacity of Buyer;
The ownership right, plot of land located within the bult-up area in the total surface of 70.075 sqm,
located in Arad County, Arad city, Calea Victorie no 33-35, central area, intabulated in the Land Book as
follows:
• 69.197 sqm, registred in Lanb Book 54971 Arad, topographic no. 13773
• 785 sqm, registred in Land Book 77385 Arad, topographic no. 3104/a/1/3/a/7/1/2;
3104/a/1/3/a/7/2 /a/2; 3104/a/1/3/a/5/9/1; 3104/a/1/3/a/62/1
• 93 sqm, registred in Land Book 77078 Arad, cadastral no. 13171
3.3 Land description
The plot is flat, good for backing the foundation, having the characteristics of a land with a building
destination.
Total accumulated surface: 70.075 66,912.50 sq. m
Utilities: existing up to the property limit
Access: from the main roads, asphalted roads, respectively Calea Aurel Vlaicu and Calea Victoriei
Building restrictions required by:
• high voltage aerial networks: no
• main gas pipes: no
• railway networks: industrial railroad
• existing or designed public roads (extension of county highways, roads, highways): no
• public projects in progress: no
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4. MARKET ANALYSIS
4.1. National economy overview
In 2011, the Romanian economy grew in the third quarter, up 1.9% from the second quarter, respectively
4.4 % compared to corresponding period of 2010, mainly due to the evolution beyond expectations of the
agricultural sector.
The annual inflation rate followed a strong downward course in Q3 2011, from 4.25 pct in August to 3.45
pct, returning after more than one year to the variation corridor around the target (3 percent), the
reduction being mainly the effect of the decrease over June-September in foodstuff volatile prices and of
the first wave of the VAT increase fading out.
The National Institute of Statistic (NIS), reported in November 2011, that due to rises in electricity, gas,
steam and air conditioning supply (+10.2%) and manufacturing (+1.3%), the national index of industrial
production (gross series) increased by 2.2% compared to the previous month, and by 4.3% compared to
the same month of 2010.
In the first 11 months of 2011, Romania exported goods worth 41.75 billion euro, up by 22.5% (7.66
billion euro) over the same period in 2010, and made imports of 50.4 billion euro, up 17.8% over the
corresponding period of 2010.
Monthly Foreign Trade over last 3 years (billion euro)
According to the Inflation Report issued by NBR in November 2011, exports will most likely post a faster
pace of increase than that of imports. Conversely, imports growth is projected to accelerate slightly in
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2012 amid the rebound in domestic demand, while exports growth is seen to be influenced by the slower
dynamics of external demand. In this context, the current account deficit will widen moderately, without
any noticeable inflationary pressures coming from domestic currency exchange rate dynamics.
Even with this positive economic evolution in 2011 and a favorable outlook for 2012, it's raining bad
news in many other directions. There are negative signs related to services and constructions, both civil
and industrial, as well as infrastructure area – on the supply side – and investment – on the demand side.
2012 will be a difficult year: the debt crisis, the problem of deficits, drought in agriculture and the general
elections are some of the most important reasons why any forecast for economic growth in Romania at
this time seems hazardous. In addition, financial institutions have no encouraging messages, and the
evolution of the economy is fragile, being influenced by the international situation.
According to the Center for European Economic Research (ZEW), Mannheim, and Erste Group Bank
AG, Vienna, the economic expectations for Romania, ranking fourth in Central and Eastern Europe
(CEE) concerning economical outlook, have deteriorated significantly in December 2011. The respective
indicators have dropped by 20.4 points and have thus reached levels of minus 52.7 points.
Beyond all these negative aspects, however there are some grounds for optimism as, in Q3 2011 the
evolution of consumption, the sector whose share in GDP is above 60%, recorded the first increase since
the beginning of the crisis.
The total number of employees over last 3 years
According to data published by the National Institute of Statistics (NIS) during the first 10 months of
2011, the number of private sector employees increased by 142,000 and the number of employees in the
public sector fell by 42,300.
Thus, from January to October 2011, the economy gained almost 100,000 employees, the best annual
performance after 1989. The official number of permanent employees in Q3 2011 was of 6.172 million,
up 139,000 from Q3, 2010.
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The official unemployment rate came, in April 2011, to 5.41%, down from 6.87% in December and
8.07% in April 2010; the minimum was recorded in Bucharest (1.98%). Although the registered
unemployment rate declined further (5.1 percent against 5.3 percent in 2011 Q2), the estimated
unemployment rate points to a relative stability (at approximately 7.3 percent).
At the end of October 2011, the average net wage per economy was of 1,457 lei, up 8.7% from October
2010.
In the same period, the inflation dropped at 3.55%, thus the purchasing power has increased with about
5%.
The average net wage evolution, 2010-2011
As a result, in the third quarter of 2011 the consumption raised by 3.1%, the first increase since
the beginning of the crisis, and in Q4 the performance is expected to be even better, considering the
winter holiday period in December, when many companies give to the employees holiday bonuses.
4.2. Real estate market at the national level
The economic and financial turbulence hit all parts of the Romanian real estate sector and markets are
only now is beginning to see some patchy signs of stabilization. After three year of crisis, the real estate
market is more mature and follows with some delay, the evolution of the economy, as it is influenced by
interest rates and financing policy in general.
The conservative policy NBR and the problems encountered by several European banks, especially those
of Greece, tend to reduce lending and hence to limit the demand in the real estate market.
Also, both buyers and sellers have nowadays a better perception of value, whether it is a property or a
sum of money, and purchases are no longer based strictly on emotional factors, leaving more room for the
rational factors: prices, surfaces, etc. On the other hand, psychological factor acts as a brake, as buyers are
much more apprehensive about the purchase, especially in housing, seen by most of the population as the
most important investment in life.
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The three quarters of 2011 have brought a sale boost compared to 2010 especially due to the “First
House IV” governmental program. Contrary to all expectation, the number of registered transactions in
the first ten months of 2011 increased from 472,240 to a total of 526,556 transactions. Of these, over 80%
are of housing sales.
Starting with October 2011, the trend was downward, due to the pessimistic forecasts and the anxiety on
the financial markets.
Residential market
The credit crunch has had an effect on the re-pricing of all apartments. However, the re-pricing was not
uniform and we can now see a two-tier market in the residential sector, with stronger price differences
between prime and secondary residential schemes depending on location, access to public transport,
quality of apartments, building structure etc, with prices better reflecting the individual scheme’s
qualities.
The three quarters of 2011 have brought a sale boost compared to 2010 especially due to the “First House
IV” program.
“First House IV” – started in June 2011, is a governmental program to sustain acquisition of a house by
young people which never had one, under special conditions:
• Interest rate for loans:
o in EURO will be maximum three-month EURIBOR + 4%;
o in RON will be maximum three months ROBOR + 2.5%.
• The maximum ceiling of loan guaranteed by the state program remained unchanged:
o 60,000 euros when buying an old house;
o 70,000 euros for new homes;
o 75,000 euros for building a house;
• The down payment remaining 5% of the building and commission of 0.49% per year to the
Guarantee Fund has not changed either.
• The state will not fully guarantee loans and banks will assume 50% default risk.
In H2 2011, the program “First House IV” facilitated the acquisition of ca. 15,034 units countrywide.
The state also supports the improvement of the “energy efficiency” of the old residential block of flats,
mainly through facade renovations, better insulation and new thermo glazed windows in Bucharest and
other major cities in Romania. The refurbishment costs are split between the state and the landlords,
which are allowed to spread the costs over a period of 20 years. This will gradually improve the old stock
of residential buildings in the major cities potentially closing the gap in quality between old and new
stock.
The number of building permits issued for residential buildings fell by 5.6 percent in the first nine months
of 2011, compared to the same period last year, down to 31,012, according to the National Statistics
Institute (INS).
3,800 building permits were issued for residential buildings in September 2011, down by 11.5 percent
compared to August 2011, and by 5.6 percent compared to September 2010.
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Residential building permit issued, by development regions
Source: INS
For local residential market, 2011 was characterized by a clear trend towards price stability. According to
imobiliare.ro in the last 12 months the price difference was reduced significantly (only by 4.1%),
compared to 2009 and 2010, when prices fell by about 21% and 16%.
Imobiliare.ro Index for apartments, Romania level
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In 2011, prices have decreased, followed by small increases, but the overall trend was slightly downward;
nationally the average price stood at 991 euro per square meter, about 4% less than the value of 1033 euro
recorded in early January 2011.
The annual evolution of prices was slightly different on the old and the new apartment segments, whether
in the first case the price trajectory was rather downward, in the second situation was reversed.
2011 trends:
•
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•
atypical for the real estate market was that, in 2011, the positive sales evolution was registered even
in the summer period.
another essential difference from 2010 is the appearance of a new category of buyers, interested in the
buy-back system, usually requiring a larger area of the apartment and a bigger number of rooms.
Through the Buy-back system, the potential customer pays the advance for a new apartment through
his old one, where she/he can live until the completion of the new apartment, without paying rent.
demand for one bedroom apartments with prices of 40,000 - 45,000 euro (compared to studios, with
prices between 25,000 and 30,000 euro and to two bedroom apartments with prices between 65,000
and 70,000 euro).
the one bedroom apartments are no longer the top-selling properties. The most were traded in 2011
were studios and 2 bedrooms apartments.
Area
Studio
1 bedroom ap.
2 bedrooms ap.
Source: anunturiparticulari.ro
Land market
The volume of land transactions in 2011 slightly exceeded 55 hectares and the total value of the most
important purchases reached about 68 million euro.
In 2011 land transactions halved, compared to 2010, when only in Bucharest and its surroundings were
traded over 100 hectares, to a total of about 100 million euro.
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The biggest transactions made in 2011 are:
No.
Buyer
Seller
Surface
(ha)
Location
Price
(milions
euro)
1 Auchan
Pryconsa
2.7 Bucharest, Drumul Taberei
21
2 Maveco Holdings
Jaffal Imad
35 Bucharest, Policolor
18
3 Ikea
Baduc
4 GED
Heineken
3.6 Bucharest, Militari
5 Polisano
Republica
0.5 Bucharest, Republica
6 NEPI
Dan Ostahie
5.8 Ploiesti
7 Alpha Property Development
Subex
1.9 Bacau
4.56
8 Dedeman
Ario Bistrita
1.9 Bistrita
1.6
2 Bucharest, Calea Plevnei
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4
0.45
N.A.
Office buildings and commercial activities
In 2011, office construction activity was limited, with few sites in progress:
•
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Sky Tower, near Aurel Vlaicu subway station - bought by Raiffeisen Bank Vienna, for
headquarters of the local subsidiary.
Ana Tower office building: partnership between Globe Trade Centre, the biggest developer of
offices in Romania, and businessman George Copos. Completion scheduled for 2013.
AFI Business Park, a complex of five office buildings located near the AFI Cotroceni Palace.
Rents for prime office remain stable, around 19 euro / sqm / month, and is expected to keep this level for
the first half of 2012. The vacancy rate decreased to 16.3% in office buildings class A and B.
In 2011, the most active areas were the center-north of Bucharest (32% of contracts), in Pipera North
(12% of contracts), and in Floreasca (11% of contracts).
Main transactions with commercial spaces in 2011:
•
•
MacroMall Brasov was sold by Carpathian Fund with 1 milion Euro.
City Mall Bucharest has been sold by UniCredit Tiriac Bank to a local developer, former owner
of City Mall. Transaction value was EUR 17.3 million.
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4.3. Specific market of the valuated property
The land price in Arad – a relatively small number of land transactions was observed in 2011. The land
surfaces from transactions are small, suitable for individual dwellings. No major transaction was found
during that period.
We performed a survey for collecting information about land market, we checked to notary offices, real
estate brokers and announcements on specialized sites. Because of the lack of real estate transparency
deals in Romania, our analysis more elaborate on current market offers. We select from the offers
available a sufficient number of offers with similar characteristics like property appraised (location,
surface, relevant information). Regarding offers from the area, we excluded from our analysis the offers
with non-reasonable price (with posting too old or with a too high price) and offers from sellers with
distressed asset (an asset that is put on sale, usually at a cheap price, because its owner is forced to sell it,
main factors for these are: bankruptcy, excessive debt or regulatory constraints).
1. Developer Arad Real Estate Development
Sale apartments offer for RED1
Residential RED one whose project
includes a total of 16 blocks
Location:
Arad, Str. Poet, no. 1 / c (Next to the
former offices of the Customs Region)
42.243 sq. m land area affected
16 blocks have been designed since 2007
and were sold R1-R9 full blocks and from
VALUATION REPORT
the other 5 blocks already finished about 40%, as follows:
- Block R10 - 86 apartments
- R11-26 block apartments
- Block R12-100 suites
- Block R13 - 73 apartments
- Block R14-65 - Apartment (deadline provided in October 2011)
Total apartments sold at the valuation date - 1.041 apartments from a total of 1.200 apartments.
The last two blocks are in the execution phase of construction and it doesn’t start contracting.
Prices for developer on 30.09.2011 (selection)
Residential RED1 UTA
R11 block scale B, Floor 8, Suite: Red1.3-R11-B-8-91
Area: 91.92 sq. m No. Rooms: 3
Price: € 55,256 excluding VAT
R11 block scale B, 9th floor, Apartment: Red1.3-R11-B-9-95
R11 block scale B, 9th floor, Apartment: Red1.3-R11-B-9-96
R12 Block scale A, Floor 4, Suite: Red1.3-R12-A-4-19
Area: 68.81 sq. m Number of rooms: 2
R12 Block B scale, Floor 10, Apartment: Red1.3-R12-B-10-98
Price: € 50,216.8 VAT
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VALUATION REPORT
R12 block scale B, Floor 4, Suite: Red1.3-R12-B-4-69
R13 block, Floor 8, Suite: Red 1.3-R13- 8-75
Block R14, Floor 1, Suite: RED1.3-R14-1-7
Price: € 72,363.46 excluding VAT
Block R14, 2nd Floor, Apartment: RED1.3-R14-2-13
Block R14, Floor 3, Apartment: RED1.3-R14-3-23
Block R14, Floor 4, Suite: RED1.3-R14-4-37
R14 block, 8th floor (penthouse) apartment: RED1.3-R14-8-74
By analyzing the current sales prices of apartments in the complex RED 1 - Phase 3 results the following
conclusions:
- Average area of 2 bedroom apartments, without including areas of balconies/terraces and no interior
walls, is 77.97 square meters. This will be considered the reference surface of the complex analysis
(rot.78mp)
- Average selling prices of the apartments of 2 rooms is 47.000 Euro. By reporting to the reference
surface, it causes a unit value of 604E/mp. The unit value decreases about 19% (from 746E/mp similar
value) for apartments delivered in previous phases, contracts spanning between 2008 and 2010.
18
VALUATION REPORT
Offer to sell apartments RED 3
The complex is located on the street Volunteers no. 2 in the district officials. It is currently under
construction along with the project and provides a total of 6 units (380 apartments), a hotel of 240 rooms
and a ground floor of commercial buildings with an aggregate area of 5300 sq. m. The reference price for
the study considered the feasibility of this project is 650 E/m - dwellings and 1500 E/m - commercial
space.
In connection with the investments ARED, note the following information for the assessment:
• Selling prices have decreased progressively during the three stages of development since the
project launch date, which was outlined above.
• Apartments’ surfaces in Red 3 were slightly lower and the weight 3 and 4 bedroom apartments
decreased, the latter aspect is found in stage 3 including the Red 1.
• Mixed-oriented projects, residential and commercial, since Red 2 has launched.
• Higher degree of finishes ensured by offers’ sale price - the sale of unfinished apartments or with
incomplete features was not allowed, even in times of crisis, all these elements ensured the success
of Red 2, sold out in 2010.
• Ranging from the developer’s directly funding rates.
• Sales Promotion
19
VALUATION REPORT
2. Developer Bermo Imotrust company shareholder group with Imotrust Arad
House assemblies Axis 1 and Axis 2 were completed and sold out - projects worth 3.4 million Euro. The
following ensembles are completed, but still up for sale:
• Bermo Horizon, Dreptatii Street no. 21, right next to the park Orizont district Micalaca
• The last apartment - View apartment in the complex plane, is at a special offer 660E/
mpSc (2 rooms, 1st floor, finished turnkey, price does not include VAT 5%)
• The apartments sold in 2009-2010 were traded at prices of 650-750 E/sq. m
• Bermo Ambient in Subcetate district of Arad, set with natural atmosphere included. Bermo
Ambient offers new apartments with superior finishes, parking lots and over 5,000 square meters
of green landscape space in condominium.
The complex is located near shopping centers: Billa, Penny Market, Selgros and Spaar.
The ensemble consists of two buildings of type P2, with a total of 48 apartments, 24 two-bedrooms and
24 three-bedrooms, measuring 78.104 square meters. On each floor there are 4 apartments. The
apartments are sold at a rate of 75%. They are considered premium from the point of view of finishes,
architectural design and facilities offered.
The price information for sale in this complex is around 700 E / sq. m, negotiable, according to statements
of Mr. Flavius Esnican Bermo Group, sales marketing director.
Bermo Residence 1 and 2
The buildings Bermo Residence1 (D+P+4+Penthouse) and Bermo Residence2
(D+P+7+Penthouse) offer high standard premium apartments, located in Arad on Voluntarilor Street from
Functionarilor Neighborhood.
The apartments measure 50 square meters for 2 bedroom apartments and more than 270 square
meters for penthouse apartments. The basement parking space is accessible by modern lifts that go down
to the basement and climb up to the penthouse apartments.
Offered for sale in BR1 - 78.54 sq. m 2 bedroom apartment, 7th floor, turnkey finished, the last
one available, only 63.000 euro, VAT 5% included. (The result is a price of 760 E/mpSc, sustainable by
location, degree of comfort and experienced developer).
20
VALUATION REPORT
3. Developer Urbanna - started three real estate projects in Arad
Originally estimated at a total value of over 21million, “300 Mures Complex” consists of two
blocks (basement + ground floor + 8floors + penthouse) of 38 apartments each.
The apartments are generously sized, measuring from 51sq. m for a studio apartment up to 232sq.
m for penthouse apartments. They are located in the natural areas of Arad - Mures cliff. Mures 300
adjoins a residential complex and a series of newly developed urban facilities: supermarket Billa,
Euromedic Medical Center, University Aurel Vlaicu and a future gym.
“INTIMO” is a building P+4 type located on Ghiba Birta street, near the new banking center in
the Intim area. The building has 16 apartments, two duplexes and is equipped with underground parking.
On evaluation in Complex Mures 300 there were only 16 apartments available from a total of 76
in the two blocks completed in late 2009 - reference to developer unit price is 650 E/sq. m without VAT:
21
VALUATION REPORT
•
An apartment on resale by an individual offer is priced at about 700 E / m
Price:
55000
Tip:
Apartment
Subtype:
Apartment: 2 rooms
Zone:
Zone 300
5 (see images)
Images:
APARTMENT 2 ROOMS, AREA 300, DETACHED, S = 74 MP, CF.1, GOOD POSITION, DOUBLE
GLAZING, AIR-CONDITIONING, TOTAL FINISHED, TILES, FAIENCE, PUTTY, WASHABLE,
COMPLETELY NEW, SELLS FOR KITCHEN FURNITURE INCLUDING PRICE . 55,000 EUROS
NEG
On the following map we located the residential projects in Arad.
We also made researches regarding notary offices and all real estate transactions are made in front of a
notary. Transaction prices are written in the contracts. For this approach we have split the map of Arad in
4 areas, A being the best and D the worst located (this is not a general rule).
22
VALUATION REPORT
Legend:
1=Cart. Verde; 2=Cart. Subcetate(BERMO); 3=Cart. Politiei/Blanduziei; 4=Zona Intim; 5=Gradiste si Castor; 6=Gai; 7=Confectii;
8=Aradu Nou; 9=Alfa; 10=Micalaca; 11=Sanleani; 12=UTA; 13=Parneava; 14=Centru vechi si ultracentral.
23
VALUATION REPORT
24
VALUATION REPORT
Selling prices for new apartments in Arad’s residential projects, 01.01 – 30.09.2011 – information from local notary office
Rooms
S[sq. m]
A Area
B Area
C Area
D Area
1
<40 sq. m
641
0
790
0
≥40 sq. m
666
642
0
718
<70 sq. m
641
754
647
674
70 sq. m - 90 sq. m
0
0
589
654
>90sq. m
0
0
0
0
<80 sq. m
599
724
0
0
80 sq. m - 100 sq. m
0
0
0
0
>100sq. m
0
754
682
0
<110 sq. m
0
0
0
0
≥110 sq. m
0
833
0
0
2
3
4
25
VALUATION REPORT
Notes:
1. Values are expressed in Euro per unit square meters of built area.
2. The average value of transactions/mSc/01.01.-30.09.2011/Mun Arad = approx 683.55 EUR/sq. m built
3. The most demanded were apartments with 1-2, max. 3rooms.
4. The differences lie in the constructive elements of the site, Sc, equipment, utilities, access roads, etc.
5. Incidentally, in some cases the selling prices are lower than the initial offer price.
4.3.1 Comparables for the valuated property considered free of buildings - see the annex
before the grid comparison
26
VALUATION REPORT
5. PROPERTY VALUATION
In accordance with International Valuation Standards, “Market value: is the estimated amount for which a
property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s
length transaction after proper marketing where the parties had each acted knowledgeably, prudently and
without compulsion”.
If there isn't an active market or the property is specialized, an asset can be valuated taking into
consideration the potential of services it can generate in the future, for instance the future economic
benefits represented by the asset in the sense of its potential to have a direct or indirect contribution to the
cash flows and the cash equivalents for the entity.
In this case, the fair value would be used. The fair value of the asset is generally used in the financial
reporting of the market value and also, of other amounts, not based on market value. If the market value
of an asset can be determined, this amount will be equal with the fair value.
In addition to the facts presented above, the property valuation made in this report presupposes:
•
approach based on market elements - through direct comparison, the later exists just at the
date of the evaluation of the documentation elaborated for that purpose (local council decision for
the inclusion in the built-up area, zoning land use plan (PUZ), detailed land use plan (PUD), notes,
permits, etc)
•
the established value is the Market value (in this case it is equal to the Fair value).
5.1 The direct comparison method
The major premise of the direct comparison approach is that the Market value of a real estate property is
in direct relation with the prices of competitive and comparable real estate properties.
The method of the direct comparison uses the process in which the Market value is estimated by
analyzing the market in order to find similar properties and compare them to the evaluated property.
The comparative analysis is based on the resemblances and the differences between properties and
transactions that influence the value.
Regarding the subject property, the direct comparison method can be applied because there are enough
offers for similar properties.
The selection of comaparables was made, according to previous mentionings, following mainly:
• The closeness to the valuated property;
• The closeness of transaction/offer date to the valuation date.
27
VALUATION REPORT
In using the comparison method, respectively in making the data grid, the following comparison criteria
shall be used:
1 Transaction/offer: refers to the date of transaction/ offer, reflecting the market conditions and the
possibility of negotiating the price which is valid at that time. The correction applied in accordance
with this criterion expresses:
• The hardening of financial conditions related to the financial effort;
• The sellers’ willingness to negotiate in the analyzed area (it has been shown that there is a
pretty limited interval for negotiation under normal conditions, the sellers knowing the history
of past transactions to which they refer);
2 The surface of the land: it is known that by increasing the surface of the land, the financial effort
increases and the number of potential buyers decreases, thus the unitary price tends to decrease. In
the case of lots jointed, the largest jointed area is taken into consideration;
3 The location: built-up/unincorporated area or the belonging to field considered better. The
correction is of 20-50 E/sq. m in favor of the land located in the built-up area. It offers the
possibility of immediate construction, of course providing that one has obtained all legal
documents (as for the valuated plot, the terms necessary for obtaining the permits have already
been met, according to the hypothesis).
4 The technical and urbanite equipment and the distance from the public networks of gas, water,
sewage, electricity (if they exist), the type of road to which the land has access. The coefficients
vary with the distance to the utilities and they cumulate one with each other;
5 The shape and the dimensions, the possibility of future division in lots: max. 25%. This criterion
makes practical impossible to diminish the unitary price for the transaction for the big surface.
This explains why lands with big surfaces have practically the same value with small plots, only in
as much as it creates the premises of a future residential development;
6 Strong points given by the proximity to the forest (or an opening at the forest skirt), lake, future
projects (highway, belt highway), variable according to the precise location of the valuated land;
7 Possible restrictions/limitations given by the location (gas pipes, L.E.A., public roads extension,
the routes of future public roads).
8 Additional criteria: in the case of lands within the built-up area, the building restrictions
imposed by the Urbanism Certificate will be additionally analyzed (P.O.T. max., C.U.T. max.,
alignment retreat) which express the most efficient use of the land.
28
VALUATION REPORT
In order to reach a value, the valuer calculates the amount of the corrections and a bigger trust will be
granted to that property that registers the smallest total brut corrections reported to the price of the
transaction/offer.
The grid of the market data - is annexed to the present report - see Annex.
Taken into consideration the location of the property, real estate market information and data about
similar sales, the purpose of appraisal the appraiser’s opinion is the market value estimated by comparison
approach.
The unitary value of the land is rounded to
V= 175 Euro/sq. m.
The total value of the land S= 70,075 sq. m is:
V = 12,260,000 Euro
6. APPENDIX
•
•
•
•
Comparison grid
Offers of free land properties
Photos of the valuated property
Copies of valuer’s Identification Card
29
Annex - Comparison Grid
Address:
Property:
Date:
Arad County, Arad City, Calea Victoriei
Land
12/31/2011
Comparison element
Unitary price [Euro/sqm]
1 Tranzaction/ offer
Correction[%]
Correction[E/sqm]
Corrected price [E/sqm]
2 Surface[sqm]
Surface correction[%]
Correction[E/sqm]
3 Location within the city
Correction[%]
Correction[E/sqm]
Corrected price [Euro/sqm]
4 Municipallity system (utilities
network, access road)
Correction[%]
Correction[E/sqm]
5 Shape and size (possibility to parcel
out for future residential
development)
Valued land
???
centre-west
100
110
offer
-10%
-10%
-14
-10
126
90
16,000
3,400
70075
-10%
-25%
-12.60
-22.50
113.40
67.50
Aurel Vlaicu street Aurel Vlaicu street
20.00
133.40
Full equipment, access similary
to main roads
favorable
residential,comercial
development on 2
fronts
no
similary
-10%
-11
99
53,000
0%
0.00
99.00
Sugar factory
50.00
149.00
similary
0.00%
0.00%
0.00%
0.00
0.00
0.00
133.40
87.50
149.00
favorable
favorable
favorable
residential,comer
comercial
residential,comer
cial development development on 1 cial development
on 1 front
front
on 2 fronts
5%
5%
6.67
4.38
140.07
91.88
Central area on
Central area on
the development
the development
direction of the
direction of the
city/ location
city/ location
favorable to the
favorable to the
road network0%
road network 0%
no
POT-30-40%
no
(Sc=19,900sqm)
CUT=2.65-2.8
(RHhmax=P+11E,
Rhcalcul=P+7E )
B.P., Project P+10-14
25.00%
35.02
175
25%
37.25
186.25
no
25%
22.97
114.84
project show-room similary
10.00%
11.48
126
Total Value Rounded [EUR]:
88
63%
35
25.06%
0%
0.00
149.00
south area
undeveloped
0.00
91.88
yes, railway
0%
0.00
140.07
175
offer
20.00
87.50
0.00
140.07
Correction[%]
Correction[E/sqm]
Brut correction
% Brut correction
Net correction related to offer
% Net correction related to offer
Offer no.
offer
Correction[%]
Correction[E/sqm]
7 Possible restrictions (network
electricity. main gas pipe line. public
roads (existing or in project) etc.)
Unitary Value Resulted:
Offer no.
140
Correction[%]
Correction[E/sqm]
6 Strengths (vecinatate forest/ lake/ DN Central area on the
vicinity, future projects, etc.)
development direction
of the city/ location
favorable to the road
network
Correction[%]
Correction[E/sqm]
8 Buiding restrictions established by the
urbanism regulations (the coefficients
cumulative)
Offer no.
91
91%
26
26.33%
0%
0.00
186.25
0.00%
0.00
186
12,260,000
98
89%
76
69.32%
1st Offer
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We dicussed with seller, the offer is active.
Imobiliare Arad: Teren 2500 mp
Page 1 of 2
2nd Offer
imobiliare arad
z
z
anunturi gratuite
blog imobiliar
real estate links
Start | Ajutor | Cautare oferte | Membri | Oferte recente | Adaug oferta | Cerere | Regulament | Contact | Publicitate
z Garsoniere
Pagina Start :: Terenuri > Vanzari
z Apart. 1 cam.
z Apart. 2 cam.
ID #20128 Oferta adaugata de proprietar
z Apart. 3 cam.
z Apart. 4 cam.
Teren 2500 mp
z Apart. 5 cam.
z Case
z Vile
Date generale
z Terenuri
Fara poze
z Spatii cazare
Descrierea imobilului:
Din: 14-11-11
Expira: 13-11-12
Vizite: 86
z Sp. Comerciale
Teren fs 20m situat pe c.aurel vlaicu linga(dacia-renault) cu utilitati complete iesire pe 2
strazi ideal investitii auto
Subiect: Teren 2500 mp
z Sp. Industriale
OFERTE SPECIALE
Zona: Vlaicu
Adresa imobil: Arad
Ofertele agentiei
imobiliare
Euromon Arad
Etajul: din:
Confort:
Suprafata construita (m2):
Material constructie:
Pret imobil
Pret vanzare: 199.00 EUR
Negociabil: da
sau inchiriere: 1500.00 EUR / luna
sau Fix:
Detalii
Dependinte
Anexe
Bucatarie: da
Mansarda:
Nr. bai: R
Nr. garaje:
Nr. balcoane: R
VANZARI:
apartamente
case/vile
spatii
terenuri
INCHIRIERI:
apartamente
case/vile
spatii
Boxa:
Balcon inchis: da
Acoperis:
WC serviciu: da
Alte anexe:
Utilitati
Incalzire
Gaz: da
Telefon: da
Incalzire proprie: da ->cu:
Apa curenta: da
Cablu TV: da
Retea Termoficare: da
Apometre: da
C. trifazic: da
Imob. contorizat: da
Finisaje
Alte dotari
Faianta:
Terasa:
Gresie:
Curte: comuna:
Parchet:
Gradina: cu supr: m2
Podele:
Geamuri termopan:
Lambriuri:
Aer conditionat:
Alte dotari sau amenajari:
Pentru Terenuri
Suprafata (m2): 2500
Intravilan: da
Extravilan:
Cu constructie:
La sosea: da
Front stradal (m): 21
Acces auto: da
Alte detalii despre teren: Parcare amenajata 1500 mp
Pret imobil
Negociabil: da
sau Fix:
Alte informatii
Fara ipoteca: da
Acte in regula: da
Web Site:
Tel: 0721269705 0721269706
ID #20128
Oferta adaugata de proprietar - Tel. 0721269705 0721269706
http://www.arad-imobiliare.ro/detail.php?cat=31&de=20128
08.02.2012
OFERTA 2
http://www.arad-imobiliare.ro/detail.php?cat=31&de=20128
Teren 2500 mp
Date generale
Fara poze
Descrierea imobilului:
Din: 14-11-11
Expira: 13-11-12
Vizite: 87
Teren fs 20m situat pe c.aurel vlaicu linga(dacia-renault) cu utilitati complete iesire pe 2
strazi ideal investitii auto
Subiect: Teren 2500 mp
Zona: Vlaicu
Adresa imobil: Arad
Etajul: din:
Confort:
Suprafata construita (m2):
Material constructie:
Pret imobil
Negociabil: da
sau Fix:
Detalii
Dependinte
Anexe
Bucatarie: da
Mansarda:
Nr. bai: R
Nr. garaje:
Nr. balcoane: R
Boxa:
Balcon inchis: da
Acoperis:
WC serviciu: da
Alte anexe:
Utilitati
Incalzire
Gaz: da
Telefon: da
Apa curenta: da
Cablu TV: da
Retea Termoficare: da
Apometre: da
C. trifazic: da
Imob. contorizat: da
Finisaje
Faianta:
Incalzire proprie: da ->cu:
Alte dotari
Terasa:
Gresie:
Curte: comuna:
Parchet:
Gradina: cu supr: m2
Podele:
Geamuri termopan:
Lambriuri:
Aer conditionat:
Alte dotari sau amenajari:
Pentru Terenuri
Suprafata (m2): 2500
Intravilan: da
Extravilan:
Cu constructie:
La sosea: da
Front stradal (m): 21
Acces auto: da
Alte detalii despre teren: Parcare amenajata 1500 mp
Pret imobil
Negociabil: da
sau Fix:
Alte informatii
Fara ipoteca: da
Acte in regula: da
Web Site:
Tel: 0721269705 0721269706
OBS.
Din discutiile cu proprietarul (0721.269.705) au rezultat urmatoarele:
- Pretul unitar afisat (199E/mp) este valabil pentru constructia tip show-room
existenta pe teren.
- Pretul total solicitat pentru proprietatea in forma sub care este prezentata in
listing este 250.000 Euro ( deci cuprinde teren 2500 mp si constructie 500 mp.)
- S-au propus 2 variante pentru achizitia de teren liber, respectiv, 1500 mp care
s-ar putea dezmembra din lotul construit sau achizitia unui teren alaturat (alta CF) cu
S= 3500 mp, ambele la un pret unitar de 100E/mp
3rd Offer
OFERTA 3
TEREN DE VANZARE - ULTRACENTRAL - ARAD
Timisoara, zona Ultracentral
STR FALEZA MALUL MURESULUI
5.830.000 EUR + TVA 110 EUR + TVA / mp
Tip teren: intravilan constructii
Suprafaţa teren: 53.000 mp
Front stradal: 400 m
•
•
•
•
Prezentare
Imagini
Poziţionare pe hartă
Informaţii credite
1 - 4 din 5
mai multe imagini
Afişează
•
Detalii
TEREN - 53.000 MP, AMPLASAT IN ZONA CENTRALA DIN ARAD - FALEZA MALUL MURESULUI
•
Caracteristici
Suprafaţa teren:
53.000 mp
Front stradal:
400 m
Nr. fronturi:
4
Lăţime drum acces:--Înclinaţie teren:
--Tip teren:
constructii
Clasificare teren:
intravilan
Construcţie pe teren:Nu
Suprafaţa construită: ---
•
Specificaţii
Utilităţi
•
Apa
•
•
•
•
•
Canalizare
Gaz
Curent
Curent trifazic
Utilitati in zona
Alte informaţii
•
Link extern: http://www.depozite-eurorent.ro
Sursa:
http://www.depozite-eurorent.ro/er-arad.html
Detalii proiect
•
•
•
amplasament - Arad, pe malul Mureşului - zona centrală
Suprafata teren - 52.430 mp
Planificare Urbană regional aprobat de Primăria Municipiului Arad prin Decizia nr 132 / 14.04.2009 suprafete
•
•
•
•
construite şi aprobat prin PUZ
Servicii publice - 48.000 mp, din care birouri - 25.000 mp
cazare - 98.000 mp
placere - 3.500 mp
parcare subterana - 32.000 mp
Contact
Adresa: str.Polona nr.2
Timisoara, 300523
Tel: 0256 203 264
0040-722-205.979
Fax: 0256 309 539
Mail: [email protected]
We discussed with seller representative, Mr. Gratian, the offer is active
IMG_3597
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Tagor - Arad Land - Photos of the valuated property
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VALUATION REPORT
Oradea/ December 2011
Valuated Property:
Real property - plot of land, located within the built-up area
Location:
74-78, Calea Clujului, Oradea, Bihor County, ROMANIA
Date of Valuation:
December 31st , 2011
Performed by:
8 Dr. Lister Street, Bucharest, 5th District - ROMANIA
Tel / Fax: 021 – 335.23 36
[email protected]
VALUATION REPORT: ORADEA LAND, TAGOR PROPERTIES
1. EXECUTIVE SUMMARY
BENEFICIARY:
S.C. TAGOR PROPERTIES S.R.L
OWNER:
S.C. CHEETAH CAPITAL S.R.L.
VALUER:
EUGEN BREAZU – VALUER, ANEVAR MEMBER, Identification Card No. 3833
VERIFIED BY:
MARIAN ŢUŢUI - TASK MANAGER, VALUATION DEPARTMENT, VALUER,
ANEVAR MEMBER, Identification Card No. 9188
OBJECT OF VALUATION:
Real estate property land within the built-up area, with a total surface of
17,777 sqm in accordance with the Land Book, respectively 17,818 sqm according to measurements,
located in Bihor County, Oradea, 74-78, Calea Clujului, registered in the new Land Book 93464,
identified by the new no. 19723, which resulted from the merging of the following plots (former
topographical identifications):
o 1st PLOT: 2,307 sqm, Land Book 190, cadastral no. 345/2, located in 78, Calea Clujului
o 2nd PLOT: 1,320 sqm, Land Book 465, cadastral no. 345/4, located in 78, Calea Clujului
o 3rd PLOT: 8,661 sqm, Land Book 472, cadastral no. 345/13, located in 78, Calea Clujului
o 4th PLOT:1,508 sqm, Land Book 9320, cadastral no.629, located in 81, Calea Maresal Averescu
o 5th PLOT: 487 sqm, Land Book 473, cadastral no.345/9, located in 81, Calea Maresal Averescu
o 6th PLOT: 3,494 sqm, Land Book 88959, cadastral no.17120, located in 74-76, Calea Clujului
PURPOSE OF VALUATION:
Establishing the fair value of the real estate for financial reporting
PROPERTY RIGHTS APPRAISED:
Fee Simple Estate
DATE OF VALUATION:
31.12.2011
REFERENCE EXCHANGE RATE:
4.3197 lei/Euro
ESTIMATED MARKET VALUE:
Real estate property in Oradea City,
Bihor County, Calea Clujului no.74-78
The direct comparison method
Surface
(measurements) [sqm]
17,818
Total Value
Value
[Euro]
[Euro/sqm]
6,060,000
340
MARIAN ŢUŢUI - TASK MANAGER,
VALUATION DEPARTMENT
EUGEN BREAZU – VALUER
The contents of this Valuation Report are confidential, therefore they are not to be partially or totally reproduced or disclosed
to any third party, but the provider and the beneficiary to whom the report is addressed.
2
2. INTRODUCTION
2.1 Scope and object of the valuation
Valuation object: land within the built-up area considered free of buildings (a negligible surface of the
land is occupied by buildings earmarked for demolition) identified by the new cadastral number, i.e.
19723.
The valuation is an updating of the value at the date mentioned in the report, provided that the real property has
been previously valuated.
Result of the previous valuation:
Date of valuation
12.31.2008
12.31.2009
31.12.2010
Total Value /Unitary Value
V= 9,381,000 Euro / 527 Euro /sqm
V=7,127,200 Euro / 400 Euro /sqm
V=6.058.000 Euro / 340 Euro/sqm
Reference exchange rate
1 Euro=3.9852 lei
1Euro=3.2282 lei
1 Euro= 4,2848 lei
The elements from the previous report are to be found in what follows, the changes from the previous situation
being signaled, especially those that have influenced the value variation in their time interval.
We used one approach to assess the land surface: comparative approach
The valuation aim remains the same - determining the fair value for financial reporting:
The fair value represents the amount for which an asset could be willingly exchanged or a debt could be
deducted between the two parties with full knowledge of the facts, within the frame of a transaction with an
objectively determined price. (IAS 16, 6th paragraph).
Market value. The amount estimated for which a property will be exchanged at the valuation date, between a
determined buyer and a resolute seller, within the frame of a transaction with an objectively determined price,
after an appropriate marketing activity in which the involved parties have acted with full knowledge of the facts,
cautiously and without constraint (IVS 1, 3.1st paragraph 3.1).
The terms market value and fair value, the way they constantly appear in accounting standards are, by and
large, compatibles, even though they are not always total equivalents. The fair value, as an accounting concept,
is defined in the International Accounting Standards and in other accounting standards as being the amount for
which an asset can be willingly transacted or a debt can be deducted between the parties who have full
knowledge of the facts, within the frame of a transaction with an objectively determined price. The fair value is
generally used for financial reporting not only of the market value, but also of the non-market value. When one
can establish the market value of an asset, this value will be equal to the fair value. (IVS – Concepts and
Principles, 8.1st paragraph)
Within the International Valuation Application Standard 1 (IVA1), according to IAS 16 and IAS 2, the
following specifications regarding the valuation activity for valuation reporting are being made:
3
“5.4 Valuations according to IAS 16
When an entity chooses the revaluation based on the fair value, according to IAS 16, the assets are included in the
balance sheet at the fair value, as follows:
a) „The fair value of land and buildings is generally determined by the record data on the market, through an
evaluation made by qualified professional valuers. The fair value of tangible assets is, generally, their market
value, determined through valuation” (IAS 16, 32nd paragraph).
b) „If there is no market data regarding the fair value, on account of the specialized nature of the element of
tangible asset, and if the element is seldom sold, except the case in which it represents part of a continuous activity,
an entity might need to estimate the fair value, by using an income approach or by the net depreciated replacement
cost” (IAS 16, 33rd paragraph).
5.4.1 IVSC considers that a qualified valuer should report the assets market value when he performs a valuation
with this purpose (financial positions). Any hypotheses or opinions expressed in the application of the market value
must be discussed with the representatives of the entity and must be included in the report.
5.4.2 The valuation conclusion must be reported according to IVS 3, International Valuation Standards, 8th edition
of Valuation reporting. The valuers must ensure themselves that the valuation reports, which were made with a
view to draw up the financial standings, contain enough data, according to the requirements of IAS 16, 77th
paragraph:
a) the revaluation comes into force date
b) if an independent valuer was involved (Note: according to IVSC interpretation, this is an external valuer)
c) significant methods and hypotheses applied
d) the extent to which the assets’ fair values have been directly determined, by referring to the prices which exist in
transactions made on an active market or in recent impartial transactions, or they have been estimated by using
other valuation techniques
Valuations according to IAS 2 –Inventories
“Definitions:
6. The following terms are used in this standard, with the meanings specified below:
…
Net realizable value is the estimated selling price of an asset in the normal course of business, less the estimated
costs to complete its production and necessary to conduct the sale.
Fair value is the amount by which it can be exchanged an asset or a liability cancelled, among stakeholders and
duly informed, engaged in a transaction at arm's length.”
This valuation is made in accordance with the International Valuation Standards in force, out of which, taking into
account the valuation aim, mainly with IVA 1 - Valuation for Financial Reporting.
4
2.2 Value acknowledgement
• The following Valuation Report was performed by Mr. Eng. Breazu Eugen, Valuer, ANEVAR member,
Identification Card No. 3833.
• The valuer is acting as an External Valuer, having no recent or future interest in the valuated property.
• All data and information used in the Valuation Report are true and accurate and have been verified by the
valuer, when possible.
• All analysis, opinions and conclusions of the report are personal and limited by different assumptions and
specific restrictive conditions, and are not influenced by any moral or financial obligations.
• The valuer undertakes to preserve the independence and integrity in carrying out the valuation report. The
amount which represents the payment for the drafting of the report, paid by the Owners, has no relation to the
declaration of a certain market value or a range of values of the property plot which favors the Owners.
• The valuation has been performed in accordance with the Deontological Code of the valuer’s profession and
with the International Valuation Standards, 8th edition. The beneficiary has agreed on the content of the Report.
• The Valuation Report was verified by Mr. Marian Ţuţui, Task Manager, Valuation Department - S.C. SIGMA
BUSINESS CONSULT S.R.L., valuer and ANEVAR member, Identification Card No. 9188.
• The company SIGMA BUSINESS CONSULT S.R.L. is an associated member of ANEVAR, the National
Association of Romanian Valuers, with the Identification no. F09/0229.
• Since 2006, SBC has been a recommended valuation company for BRD Groupe Societe Generale bank.
• Up to the present, the number of valuation reports has reached a total of 1,500. These reports refer to buildings,
pieces of land, commercial centers, office spaces, warehouses, dwellings, etc.
2.3. Inspection date and effective valuation date
The documentation for valuation was made between 15.12.2011 - 31.01.2012, interval in which the field inspection
was also performed. The inspection was made without the participation of a representative of the company which
owns the property right on the real property, since we know the land from previous visits.
Value estimation date: 31.12.2011
It is mentioned that the result of the valuation is prone to variation on the real estate market, making it valid for a
limited period of time (usually up to 3 months).
2.4 Assumptions and restrictive conditions
The valuer assumes whole responsibility regarding the opinions he provided in this valuation report.
During the elaboration of the Report, several hypotheses and restrictive conditions were considered, as follows:
• The valuation is made, assuming that the property is not entailed.
• It was assumed by the valuer that there are no hidden or unknown property conditions which may change the
value of the property. The valuer declines his responsibility regarding the existence of the above mentioned
conditions, or regarding any necessarily professional investigations in order to reveal such conditions.
5
•
•
•
•
•
•
No investigations were performed in order to determine whether soil contaminants are present on site or not, so
we are unable to confirm that the valuation is free of risk on this regard. Therefore, for the purpose of the
valuation, it was assumed that there are no soil contaminants on the property, which could pollute the
environment and diminish the value of the property.
Any value estimation from this report is related to the valuated property, as a whole; any splitting of the
property (not mentioned in the report) or partial rights on the property would invalidate this value.
It was assumed by the valuer that all data and information are genuine and accurate.
It was assumed by the valuer that the property is well hold and managed.
The valuer will not be asked to offer subsequent support regarding the valuated property or to testify, unless
previous arrangements were made between parties.
The content of this Valuation Report could be reproduced, partially or as a whole, in other documents, circulars
or statements. S.C. SIGMA BUSINESS CONSULT S.R.L. and its valuer are not responsible to the beneficiary
or any third party if, by publishing this report, prejudices should occur to them. This Valuation Report does not
contain investment suggestions, therefore, neither the valuer, nor the company S.C. SIGMA BUSINESS
CONSULT S.R.L., are responsible for any prejudices occurred to the beneficiary, or other third party,
following the use of these data as investment decision.
Additional assumptions:
•
A hypothesis with generic character reffers to the merging possibility of more lands condiderated as being
a compact polt. The eventual discontinuities (of relatively small proportion) cannot influence these
hypothesis, because the whole can rather form itself around bigger plots rather than missing strips.
Moreover, it should be mentioned that a compaction of the valuated land can be physically can be also
made by exchanging lands in favour of those who own big surfaces (e.g. the actual owners), who have this
option as opposed to the other owners, who are divided. the real estate market acknowledges the compact
plot for the valuated land, and placed the emphasis on lands which were initially divided and which have
been bought by the same owner. This hypothesis is no longer necessary in the present case (it only
confirms itself) by merging the 6 plots according to the document no. 69376/2008.
•
Although we have been given favorable urban permits, extremely advantageous due to the technical and
economic indicators (High regime=P+15-18-20et, POT=30-40% and CUT=3.5), until the completion and
PUZ approval, we will consider the situation similar to that of the previous valuation. This is because, as it
will be mentioned in chapter “Market analysis”, taking into account the history of other major residential
investments, the developers have reconsidered their decisions, which were taken under favorable
circumstances of the real estate market evolution, adapting them to the present situation. Worst case
scenario, the projects will be cancelled, but by and large one chooses to alter the value of the investment
(as it is our aim in this paper).
6
2.5. Highest and best use appraisal
The “Highest and best use” is a market concept.
Through “Highest and best use” analysis of the valuated property one can identify the most competitive and
profitable use.
In accordance with the International Valuation Standards, the “Highest and best use” concept is defined as “the
most probable use of a property which is physically possible, appropriately justified, legally permissible, financially
feasible, and which results in the highest value of the property being valued”.
Physically possible
The valuated property could have multiple uses, but as the market states, as market data shows, the micro-zone
specific aims towards the residential sector, collective or individual.
Probable use
It is valuer’s opinion that the specific of the area could change in the near future, and the investments that could be
made on the land subject of this report could only have a residential or commercial use. For this reason, the
“Highest and Best Use” will be limited to the above considerations, regarding the use of the property.
Legally permissible
At this moment, the land has an industial destination and it is located within the build-up area, in the central area of
Oradea, which has mainly a residential and commercial character.
The land location can be seen as an element that could stimulate residential type investments (collective and
individual) or commercial.
It is common knowledge that the local authorities support this kind of projects and even encourages them, and by
increasing the surface (see compact plot hypothesis) they increase the chances of making them possible (beginning
with the easiness of obtaining the approval of PUZ/PUD).
I consider that the possibility of building in this area is plausible, formal.
Financially feasible
By analyzing the above facts and, also, by applying the appropriate justification filtration, the valuer considers that
the best use of the property, in the near future, is collective residential estate, and this is because there are mostly
developing residential ensembles in the area.
7
3. DESCRIPTION OF THE SUBJECT PROPERTY
3.1 Description of the location and of the area
The real estate property, i.e. the real property subjected to the valuation presents itself as a compact plot for which
the technical and economic regime suffers changes.
The land is in the near vicinity of the civic and commercial centre of Oradea, seen as the business centre and also
the place where the most important administrative, cultural and social activities of the town are held.
•
Traffic area, with intense tranzit, Maresal Averescu Street and Clujului Street being he main roads to
and from E60, towards Cluj Napoca (parallel straeets, both being one way streets);
•
Easy access to E60, European road;
•
Vicinities: Block of flats neighborhood “Velenta” for Calea Clujului and the river flow Crisul Repede
for Calea Maresal Averescu;
•
There are local projects for municipal development – is incorporated in the financing program of local
authorities the gas pipe. Existing utilities: electricity, water, sewage, heating from the city networks.
3.2 Juridical status of the subject property - ownership rights
The ownership right is given by the following sell-purchase agreements:
•
Sell – purchase agreement with authentification completion no. 3199/ 10.18.2007;
•
Sell – purchase agreement with authentification completion no. 1017/ 10.18.2008;
Contracting parties: S.C. SIRIUS DEZVOLTARE S.R.L., respectively S.C. ANGROMET S.A., as Sellers, and
S.C. CHEETAH S.R.L., located in 11-13, Kiseleff Blvd., 1st District, Bucharest, as Buyer,
Subsequently, the bought real properties (plots) have been merged according to the document no. 69376/ 2008,
forming a single plot identified by the new cadastral number 19723, for which a new Land Book has been started,
having the no. 93464.
3.3 Land description
The plot is flat, good for backing the foundation and presenting the characteristics of a land with a building
destination.
• Total currently accumulated surface: 17,818 sqm.
• Utilities: all existing on the land
• Access: from the main, asphalted roads.
Building restrictions required by:
• high voltage aerial networks: no
• main gas pipes: no
• railway networks: no
• existing or designed public roads (extensions of county highways, roads, highways): no
• public projects in progress: no
8
4. MARKET ANALYSIS
4.1. National economy overview
In 2011, the Romanian economy grew in the third quarter, up 1.9% from the second quarter, respectively 4.4 %
compared to corresponding period of 2010, mainly due to the evolution beyond expectations of the agricultural
sector.
The annual inflation rate followed a strong downward course in Q3 2011, from 4.25 pct in August to 3.45 pct,
returning after more than one year to the variation corridor around the target (3 percent), the reduction being mainly
the effect of the decrease over June-September in foodstuff volatile prices and of the first wave of the VAT increase
fading out.
The National Institute of Statistic (NIS), reported in November 2011, that due to rises in electricity, gas, steam and
air conditioning supply (+10.2%) and manufacturing (+1.3%), the national index of industrial production (gross
series) increased by 2.2% compared to the previous month, and by 4.3% compared to the same month of 2010.
In the first 11 months of 2011, Romania exported goods worth 41.75 billion euro, up by 22.5% (7.66 billion euro)
over the same period in 2010, and made imports of 50.4 billion euro, up 17.8% over the corresponding period of
2010.
Monthly Foreign Trade over last 3 years (billion euro)
According to the Inflation Report issued by NBR in November 2011, exports will most likely post a faster pace of
increase than that of imports. Conversely, imports growth is projected to accelerate slightly in 2012 amid the
rebound in domestic demand, while exports growth is seen to be influenced by the slower dynamics of external
demand. In this context, the current account deficit will widen moderately, without any noticeable inflationary
pressures coming from domestic currency exchange rate dynamics.
9
Even with this positive economic evolution in 2011 and a favorable outlook for 2012, it's raining bad news in many
other directions. There are negative signs related to services and constructions, both civil and industrial, as well as
infrastructure area – on the supply side – and investment – on the demand side.
2012 will be a difficult year: the debt crisis, the problem of deficits, drought in agriculture and the general elections
are some of the most important reasons why any forecast for economic growth in Romania at this time seems
hazardous. In addition, financial institutions have no encouraging messages, and the evolution of the economy is
fragile, being influenced by the international situation.
According to the Center for European Economic Research (ZEW), Mannheim, and Erste Group Bank AG, Vienna,
the economic expectations for Romania, ranking fourth in Central and Eastern Europe (CEE) concerning
economical outlook, have deteriorated significantly in December 2011. The respective indicators have dropped by
20.4 points and have thus reached levels of minus 52.7 points.
Beyond all these negative aspects, however there are some grounds for optimism as, in Q3 2011 the evolution of
consumption, the sector whose share in GDP is above 60%, recorded the first increase since the beginning of the
crisis.
The total number of employees over last 3 years
According to data published by the National Institute of Statistics (NIS) during the first 10 months of 2011, the
number of private sector employees increased by 142,000 and the number of employees in the public sector fell by
42,300.
Thus, from January to October 2011, the economy gained almost 100,000 employees, the best annual performance
after 1989. The official number of permanent employees in Q3 2011 was of 6.172 million, up 139,000 from Q3,
2010.
The official unemployment rate came, in April 2011, to 5.41%, down from 6.87% in December and 8.07% in April
2010; the minimum was recorded in Bucharest (1.98%). Although the registered unemployment rate declined
further (5.1 percent against 5.3 percent in 2011 Q2), the estimated unemployment rate points to a relative stability
(at approximately 7.3 percent).
At the end of October 2011, the average net wage per economy was of 1,457 lei, up 8.7% from October 2010.
10
In the same period, the inflation dropped at 3.55%, thus the purchasing power has increased with about 5%.
The average net wage evolution, 2010-2011
As a result, in the third quarter of 2011 the consumption raised by 3.1%, the first increase since the
beginning of the crisis, and in Q4 the performance is expected to be even better, considering the winter holiday
period in December, when many companies give to the employees holiday bonuses.
4.2. Real estate market at the national level
The economic and financial turbulence hit all parts of the Romanian real estate sector and markets are only now is
beginning to see some patchy signs of stabilization. After three year of crisis, the real estate market is more mature
and follows with some delay, the evolution of the economy, as it is influenced by interest rates and financing policy
in general.
The conservative policy NBR and the problems encountered by several European banks, especially those of
Greece, tend to reduce lending and hence to limit the demand in the real estate market.
Also, both buyers and sellers have nowadays a better perception of value, whether it is a property or a sum of
money, and purchases are no longer based strictly on emotional factors, leaving more room for the rational factors:
prices, surfaces, etc. On the other hand, psychological factor acts as a brake, as buyers are much more apprehensive
about the purchase, especially in housing, seen by most of the population as the most important investment in life.
The three quarters of 2011 have brought a sale boost compared to 2010 especially due to the “First House IV”
governmental program. Contrary to all expectation, the number of registered transactions in the first ten months of
2011 increased from 472,240 to a total of 526,556 transactions. Of these, over 80% are of housing sales.
Starting with October 2011, the trend was downward, due to the pessimistic forecasts and the anxiety on the
financial markets.
Residential market
The credit crunch has had an effect on the re-pricing of all apartments. However, the re-pricing was not uniform
and we can now see a two-tier market in the residential sector, with stronger price differences between prime and
11
secondary residential schemes depending on location, access to public transport, quality of apartments, building
structure etc, with prices better reflecting the individual scheme’s qualities.
The three quarters of 2011 have brought a sale boost compared to 2010 especially due to the “First House IV”
program.
“First House IV” – started in June 2011, is a governmental program to sustain acquisition of a house by young
people which never had one, under special conditions:
• Interest rate for loans:
o in EURO will be maximum three-month EURIBOR + 4%;
o in RON will be maximum three months ROBOR + 2.5%.
• The maximum ceiling of loan guaranteed by the state program remained unchanged:
o 60,000 euros when buying an old house;
o 70,000 euros for new homes;
o 75,000 euros for building a house;
The
down payment remaining 5% of the building and commission of 0.49% per year to the Guarantee
•
Fund has not changed either.
• The state will not fully guarantee loans and banks will assume 50% default risk.
In H2 2011, the program “First House IV” facilitated the acquisition of ca. 15,034 units countrywide.
The state also supports the improvement of the “energy efficiency” of the old residential block of flats, mainly
through facade renovations, better insulation and new thermo glazed windows in Bucharest and other major cities
in Romania.
The refurbishment costs are split between the state and the landlords, which are allowed to spread the costs over a
period of 20 years. This will gradually improve the old stock of residential buildings in the major cities potentially
closing the gap in quality between old and new stock.
The number of building permits issued for residential buildings fell by 5.6 percent in the first nine months of 2011,
compared to the same period last year, down to 31,012, according to the National Statistics Institute (INS).
3,800 building permits were issued for residential buildings in September 2011, down by 11.5 percent compared to
August 2011, and by 5.6 percent compared to September 2010.
Residential building permit issued, by development regions
Source: INS
12
For local residential market, 2011 was characterized by a clear trend towards price stability. According to
imobiliare.ro in the last 12 months the price difference was reduced significantly (only by 4.1%), compared to 2009
and 2010, when prices fell by about 21% and 16%.
Imobiliare.ro Index for apartments, Romania level
In 2011, prices have decreased, followed by small increases, but the overall trend was slightly downward;
nationally the average price stood at 991 euro per square meter, about 4% less than the value of 1033 euro recorded
in early January 2011.
The annual evolution of prices was slightly different on the old and the new apartment segments, whether in the
first case the price trajectory was rather downward, in the second situation was reversed.
2011 trends:
•
•
•
•
atypical for the real estate market was that, in 2011, the positive sales evolution was registered even in the
summer period.
another essential difference from 2010 is the appearance of a new category of buyers, interested in the buy-back
system, usually requiring a larger area of the apartment and a bigger number of rooms. Through the Buy-back
system, the potential customer pays the advance for a new apartment through his old one, where she/he can live
until the completion of the new apartment, without paying rent.
demand for one bedroom apartments with prices of 40,000 - 45,000 euro (compared to studios, with prices
between 25,000 and 30,000 euro and to two bedroom apartments with prices between 65,000 and 70,000 euro).
the one bedroom apartments are no longer the top-selling properties. The most were traded in 2011 were
studios and 2 bedrooms apartments.
13
Area
Studio
1 bedroom ap.
2 bedrooms ap.
Source: anunturiparticulari.ro
Land market
The volume of land transactions in 2011 slightly exceeded 55 hectares and the total value of the most important
purchases reached about 68 million euro.
In 2011 land transactions halved, compared to 2010, when only in Bucharest and its surroundings were traded over
100 hectares, to a total of about 100 million euro.
The biggest transactions made in 2011 are:
No.
Buyer
Seller
Surface
(ha)
Location
Price
(milions
euro)
1 Auchan
Pryconsa
2.7 Bucharest, Drumul Taberei
21
2 Maveco Holdings
Jaffal Imad
35 Bucharest, Policolor
18
3 Ikea
Baduc
4 GED
Heineken
3.6 Bucharest, Militari
5 Polisano
Republica
0.5 Bucharest, Republica
6 NEPI
Dan Ostahie
5.8 Ploiesti
7 Alpha Property Development
Subex
1.9 Bacau
4.56
8 Dedeman
Ario Bistrita
1.9 Bistrita
1.6
2 Bucharest, Calea Plevnei
13
4
0.45
N.A.
14
Office buildings and commercial activities
In 2011, office construction activity was limited, with few sites in progress:
•
•
•
Sky Tower, near Aurel Vlaicu subway station - bought by Raiffeisen Bank Vienna, for headquarters of the
local subsidiary.
Ana Tower office building: partnership between Globe Trade Centre, the biggest developer of offices in
Romania, and businessman George Copos. Completion scheduled for 2013.
AFI Business Park, a complex of five office buildings located near the AFI Cotroceni Palace.
Rents for prime office remain stable, around 19 euro / sqm / month, and is expected to keep this level for the first
half of 2012. The vacancy rate decreased to 16.3% in office buildings class A and B.
In 2011, the most active areas were the center-north of Bucharest (32% of contracts), in Pipera North (12% of
contracts), and in Floreasca (11% of contracts).
Main transactions with commercial spaces in 2011:
•
•
MacroMall Brasov was sold by Carpathian Fund with 1 milion Euro.
City Mall Bucharest has been sold by UniCredit Tiriac Bank to a local developer, former owner of City
Mall. Transaction value was EUR 17.3 million.
15
4.3. Specific market of the valuated property
Bihor is a county in the North – Western part of Romania, in Crişana, with capital city at Oradea. It has a
total area of 7,544 km2 and a population of 593,431 people (1st July 2008).
Oradea has long been one of the more prosperous cities in Romania, due mainly to its location on the
Hungarian border, making it a gateway towards Western Europe. The per capita GDP of Oradea is
approximately 150% of the Romanian average. After 1989, due to its important base of consumers,
Oradea enjoyed an economic renewal, not so much in industry but rather in the services sector such as
trade and tourism.
Despite this, a survey by Capital Magazine named Oradea as the least dynamic city in Romania with a
population over 150,000, falling behind its neighbors Cluj-Napoca, Arad and Timisoara. In particular, the
city was criticized for high taxes, poor infrastructure and a lack of a clear development strategy.
Oradea has an unemployment rate of 6.0%, slightly lower than the Romanian average but much higher
than Bihor County's average of around 2%. Oradea currently produces around 63% of the industrial
production of Bihor County while accounting for 34.5% of the population of the county.
Its main industries are furniture, textiles and clothing, footwear and food processing.
Oradea is one of the main education centers of Romania. The city is home to the University of Oradea,
one of the largest and most modern universities in the country. There are also several private universities,
one being Agora University, a modern academic institution founded in 2000.
The public transport network is run by OTL, a municipal agency. It is made up of three tram lines (1R,
1N, 2, 3R, 3N) and ten bus lines (numbered from 10 to 19). The city has four train stations: Central, West,
East and Episcopia Bihor. The West Station is located in the quarter of Iosia, the Central station (called
simply Oradea) is located closer to the city center, near the quarter of Vie, while the East station is located
in Velenta.
Oradea is served by Oradea International Airport, which has flights from major Romanian cities as well
as some cities in northern Italy.
16
The land price in Oradea – a relatively small number of land transactions was observed in 2011. The land
surfaces from transactions are small, suitable for individual dwellings. No major transaction was found
during that period.
We have performed a survey about the land market, collecting information from notary offices, real estate
brokers and from specialized sites on internet. Because of the lack of transparency on real estate deals,
our analysis is based on current market offers for properties with similar characteristics to the subject of
the valuation (location, surface, relevant information).
Also we performed a check of main residential projects in Oradea, similar to Tagor project, used to obtain
information for current apartments’ selling prices:
Luceafarul Residential Ensemble
Developed by Selina Invest
It is located on two locations: Calea Aradului and Universitatii Street, and includes several
building phases
• The location in Calea Aradului:
o The project includes 1,000 apartments, 1,600 parking spaces and a 13,000 sqm green
area.
o two blocks of flats, with a height regime S+P+10E, are for sale:
block no. 4 (104 apartments), finalized in 2008 and it is 80% occupied
block no. 3 (106 apartments), finalized in December 2011 and it is 10%
occupied
Price: starting with 31,000 Euro (VAT included)
•
•
Iosia Residential Ensemble
o
o
o
The project consists of 3 blocks: 2 on Lapusului Straeet and one on the Erofte Grigore
Street. The ensemble is located in a central area, 800 m distance from Decebal Bdv.,
near the commercial ensemble 3G and PennyMarket. In the near vecinity, there are: 2
highschools (Sinteza and Don Orione Highschools), a kindergarten (Piticot), Iosia lido,
Iosia Market, Sports Centre and Precon sports ground, equiped with tennis and football
fields.
The ensemble has 5 blocks of 8-11 storeys, planned to be made in 3 phases, the first one
being close to completion. At the end of the 1st trimestre of 2009, 180 apartments can be
given to use, out of which 15% were contracted in the spring of 2007, when the project
was launched, and 50% in December 2008.
Price: 78.500 Euro, VAT included, for 3 room apartments + parking space
17
Prima Casa Residential Ensemble
o The residential ensemble Prima is located in Oradea, 15 minutes away from downtown
and 5 minutes away from Baile Felix and it is a 4 project ensemble, consisting of 7
blocks of flats. In the 1st phase, the first 3 blocks of flats have been built, which have 87
apartments that have all been sold. In the second phase, other 3 blocks were built, over
50% of them being sold. The 3rd phase consists of a block of flats D+P+5, which, as the
developer believes, will be the most attractive component of the project. The 4th phase is
made up of 5 tower blocks.
o Price:
For apartments: starting with 23.500 Euro +VAT.
Rent for commercial spaces: 4 Euro/sqm = VAT
Cartierul Soarelui Residential Ensemble
o
o
o
Cartierul Soarelui is located at the exit towards Satu-Mare in a quiet area, 2 km away
from downtown. The project is made up of 6 blocks of flats D+P+4 : 4 rectangulare and
2 circulare, with a total of 480 apartments. There are underground parking spaces.
Rectangular blocks
4 blocks having a height regime S+P+4
Numder of apartments: 380
Number of rooms: 1 - 3
Apartments’ suraface is between: 44 si 105.68 sqm
Round blocks – new concept
2 blocks having the height regime S+P+4
Number of apartments: 90
Number of rooms: 2 - 4
Apartments’ surface is between: 68.42 si 73.95 sqm
18
Price: 52.900 Euro, VAT included: 2 rooms apartment + parking space.
Europa Residential Ensemble
The project, located on Umbrei Street, is built on a 110,000 sqm land and consists of 298
villas
o The ensemble is located 10 min. away from the city center, near the commercial area (
Real, Obi, Bricostore) and near Era Park
o 170 villas are already sold
Price: starting with 68.161 Euro (VAT included)
o
Conclusions of apartments market analysis:
apartment prices have dropped over 20% in 2011. Currently in Oradea the asking price for a
studio is between 8,000 Euro and 27,000 Euro, depending on size and amenities, and for a tworoom apartment is between 24,000 Euro and 40,000 Euro. Real estate experts point out that the
studios and two bedroom apartments have reached the lowest possible price.
speculators who buy apartments with cash get discounts up to 40% of the original price
rents are also falling, because the number of students in Oradea’s Universities has decreased.
19
Following the market analysis from the given area, we have selected the following comparable offers:
1st Offer (see annexes): Vacant land located on Nufarul Plaza area
o
Offer ID no. T-7240 from www.casa-regal.ro, posted by Lucian Ardelean , Casa
Regal Imobiliare, Oradea, Str. Ady Endre nr.45/A, tel: 0788/20.90.20,
[email protected]
o
Vacant land, within the build-up area, of 4,122 sqm, with 82 m road opening;
o
o
Existing utility networks: fully equipped;
Residential / commercial destination;
o
The offer price is of 340 Euro/sqm.
2nd Offer (see annexes): Vacant land located on Central Plaza area
o Offer ID no. T 939 from www.casa-regal.ro, posted by Lucian Ardelean , Casa Regal
Imobiliare, Oradea, Str. Ady Endre nr.45/A, tel: 0788/20.90.20,
[email protected]
o
Vacant land, within the build-up area, with the surface of 444 sqm and a 65 m
opening to 2 roads;
20
o
Existing utility networks: fully equipped;
o
o
Fit for office building destination;
Building permit approved (S+P+2E)
o
The offer price: 380 Euro/sqm.
rd
3 Offer (see annexes): Land located on City Hall area
o
Offer ID no. T-1294 from www.casa-regal.ro, posted by Lucian Ardelean , Casa
[email protected]
o
Land within the build-up area, with a total surface of 1,716 sqm and a 28 m opening
to the road;
o
3 Buildings on site, with a total built area of 452 sqm;
o
Existing utilities networks: fully equipped;
o
Fit for residential / commercial development;
o The offer price: 512 Euro/sqm.
4 Offer (see annexes): Vacant land located on Ciuperca Hill
th
o
Offer ID no. T-1201, from www.casa-regal.ro, posted by Lucian Ardelean , Casa
[email protected]
o
Land inside build-up area, with a total surface of 5,625 sqm and a 70 m opening to
the road;
o
Existing utilities networks: water, sewage, electricity;
o
o
Fit for residential development;
The transaction price: 120 Euro/sqm
21
5. PROPERTY VALUATION
In accordance with International Valuation Standards, “Market value: is the estimated amount for which a
property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s
length transaction after proper marketing where the parties had each acted knowledgeably, prudently and
without compulsion”.
If there isn't an active market or the property is specialized, an asset can be valuated taking into
consideration the potential of services it can generate in the future, for instance the future economic
benefits represented by the asset in the sense of its potential to have a direct or indirect contribution to the
cash flows and the cash equivalents for the entity.
In this case, the fair value would be used. The fair value of the asset is generally used in the financial
reporting of the market value and also, of other, not based on market value, amounts. If the market value
of an asset can be determined, this amount will be equal with the fair value.
In addition to the facts presented above, the property valuation made in this report presupposes:
• approach based on market elements - through direct comparison method
• the established value is the Market value (in this case it is equal with the Fair value).
5.1 The direct comparison method
The major premise of the direct comparison approach is that the Market value of a real estate property is
in direct relation with the prices of competitive and comparable real estate properties.
The method of the direct comparison uses the process in which the Market value is estimated by
analyzing the market in order to find similar properties and compare them to the evaluated property.
The comparative analysis is based on the resemblances and the differences between properties and
transactions that influence the value.
Regarding the subject property, the direct comparison method can be applied because there are enough
offers for similar properties.
The selection of comparables was made, according to previous mentioning, following mainly:
• The closeness to the valuated property;
• The closeness of transaction/offer date to the valuation date.
We have searched significantly recent transactions or similar offers, comparable by means of surface,
location and existing utilities, in the analyzed area –Oradea town.
22
As a general characteristic of the real estate market, the land is a limited resource, and each land presents
unique characteristics; at the same time, the offers of lands with big surfaces within the cities are limited.
What follows is the lack of offers or transactions with similar, comparable dimensions.
The offers of land with small surfaces usually have bigger values per sqm and the negotiation margin is
smaller, whereas the offers with big surfaces have smaller prices per sqm and the negotiation margin is
much bigger.
Following the market analysis from the given area, we have selected the comparable offers, mentioned in
market analysis - see annex.
In using the comparison method, respectively in making the data grid, the following comparison criteria
shall be used:
1 Transaction/offer: refers to the date of transaction/ offer, reflecting the market conditions and the
possibility of negotiating the price which is valid at that time. The correction applied in accordance
with this criterion expresses:
• The hardening of financial conditions related to the financial effort;
• The sellers’ willingness to negotiate in the analyzed area (it has been shown that there is a
pretty limited interval for negotiation under normal conditions, the sellers knowing the history
of past transactions to which they refer);
After talking to real estate agents about all comparable properties, especially about offer no. 1,
and accordingly to market evolution, a -10% negative correction was applied on all offers.
Due to the present economic conditions, the number of investors has diminished, and the sellers
accept these margins, especially when it comes to important transactions sums of money.
2 The surface of the land: it is known that by increasing the surface of the land, the financial effort
increases and the number of potential buyers’ decreases, thus the unitary price tends to decrease. In
the case of lots jointed, the largest jointed area is taken into consideration.
There is limited number of offers for big surface plots within de build-up area of the city, thus a
negative corrections were applied on all offers, as follows:
o -10% on offers no. 1 and 4, with surfaces bigger then 10% of the valued plot of land;
o -20% on offers no. 2 and 3, with surfaces smaller then 10% of the valued plot of land;
Also, smaller surfaces are much easily sold, due to the smaller transaction sum.
In addition, a -10% negative corrections was applied on offers no. 3 and 4, to compensate on the
fact that the land is not vacant.
3 The location: built-up/unincorporated area or the belonging to field considered better.
All comparable offers are located within the built-up area of Oradea. Offers no. 2 and 3 are
located in the Center of Oradea, thus no correction was applied. The 1st offer has a worsen
position; its price was decreased with 55 Euro. The last property is located in a secluded area,
outside residential areas of Oradea. Its price was corrected with 150 Euro, considered a
reasonable amount to justify the difference between the two locations.
4 The technical and urbanite equipment and the distance from the public networks of gas, water,
sewage, electricity (if they exist), the type of road to which the land has access. The coefficients
vary with the distance to the utilities and they cumulate one with each other;
23
The 2nd and 3rd offers have similar endowments, so no correction was applied. On the 1st and 4th
Offers positive corrections were applied: 3% was applied on offer no. 1 because of the worsen
access to the property and 10% on offer no. 4 because of the lack of gas system in the area.
5 The shape and the dimensions, the possibility of future division in lots: max. 25%. This criterion
makes practical impossible to diminish the unitary price for the transaction for the big surface.
This explains why lands with big surfaces have practically the same value with small plots, only in
as much as it creates the premises of a future residential development;
A 5% correction was applied on the 2nd offer, due to the size of the plot, less favorable for
residential development.
6 Strong points given by the proximity to the forest (or an opening at the forest skirt), lake, future
projects (highway, belt highway), variable according to the precise location of the valuated land;
A 5% correction was applied on the 4th offer, because of the its distance to future projects
7 Possible restrictions/limitations given by the location (gas pipes, L.E.A., public roads extension,
the routes of future public roads).
No corrections were applied..
8 Additional criteria: in the case of lands within the built-up area, the building restrictions
imposed by the Urbanism Certificate will be additionally analyzed (P.O.T. max., C.U.T. max.,
alignment retreat) which express the most efficient use of the land.
The properties on Offers no. 3 and 4 have no PUD/PUZ approved, thus a 5% correction was
applied, for taxes.
In order to reach a value, the valuer calculates the amount of the corrections and a bigger trust will be
granted to that property that registers the smallest total net corrections reported to the price of the
transaction/offer.
The grid of the market data - is annexed to the present report.
The unitary value of the land is rounded to:
V= 340 Euro/sqm.
The total value of the land (S=17,818 sqm) is rounded to:
6,060,000 Euro
24
6. APPENDIX
•
•
•
•
Comparison grid
Offers of free land properties
Photos of the valuated property
Copies of valuer’s Identification Card
25
Annex - Comparison Grid
Address:
Property:
Date:
Comparison element
Unitary price [Euro/sqm]
Bihor County, Oradea City, Calea Clujului
Land
12/31/2011
Valued land
Offer no. 1
Offer no. 2
???
340
380
1 Tranzaction/ offer
Correction[%]
Correction[E/sqm]
2 Surface[sqm]
Surface correction[%]
Correction[E/sqm]
17,818
3 Location within the city
central
offer
offer
-10%
-10%
-34
-38
306
342
34
38
4,122
444
-10%
-30%
-31
-103
275
239
30.6
102.6
Nufarul Plaza Central Plaza area
area
Correction[%]
Correction[E/sqm]
Corrected price [Euro/sqm]
4 Municipallity system (utilities network, Calea Clujului, near
access road)
Cetate
Correction[%]
Correction[E/sqm]
5 Shape and size (possibility to parcel out
for future residential development)
yes
Correction[%]
Correction[E/sqm]
6 Strengths (vecinatate forest/ lake/ DN
vicinity, future projects, etc.)
Civic centre, propitious
location for Crisul
Repede belvedere
Correction[%]
Correction[E/sqm]
7 Possible restrictions (network
electricity. main gas pipe line. public
roads (existing or in project) etc.)
no
Correction[%]
Correction[E/sqm]
8 Buiding restrictions established by the
urbanism regulations (the coefficients
cumulative)
POT-30-40%
(Sc=5700sqm) CUT=3.5
RHhmax=P+20E,PUZ in
progress
(Rhcalculation=P+7Emedium height)
Correction[%]
Correction[E/sqm]
Unitary Value Resulted:
Brut correction
% Brut correction
Net correction related to offer
% Net correction related to offer
340
Offer no. 3
512
Offer no. 4
120
offer
offer
-10%
-10%
-51
-12
461
108
51.2
12
1,716
5,625
-30%
-20%
-138
-22
323
86
138.24
21.6
Central - City Ciuperca Hill area
Hall area
55
330
55.00
Thoroughfare
0
239
0.00
similar
0
323
0.00
similar
3.00%
10
340
9.91
yes
0.00%
0
239
0.00
no
0.00%
0
323
0.00
yes
150
236
150.00
local asphalted
roads, no gas
system
10.00%
24
260
23.64
yes
0%
0
340
0.00
near residential
Nufarul-Plaza
5%
12
251
11.97
similar
0%
0
323
0.00
similar
0%
0
260
0.00
no
0%
0
340
0.00
no
0%
0
251
0.00
no
0%
0
323
0.00
no
10%
26
286
26.00
no
0%
0
340
0.00
similar
0%
0
251
0.00
similar
0%
0
323
0.00
no
0%
0
286
0.00
no
0.00%
0
340
0.00
0.00%
0
251
0.00
5.00%
16
339
16.13
5.00%
14
300
14.30
Total Value Rounded [EUR]:
130
38%
0
0%
153
40%
-129
-34%
6,060,000
206
40%
-173
-34%
248
207%
180
150%
Detalii Oferta Imobiliara
http://www.casa-regal.com/ro/details-terenuri-848.html
Vanzari
Inchirieri
Proiectare Oportunitati
Despre
Contact
Legislatie
Cariere
Detalii
Teren de vânzare
Preţ total: 1400000 EUR
Preţ per mp: 340 EUR
2
Suprafaţa: 4122 m
Front stradal: 82 m
Destinaţie: Rezidentiala, blocuri de apartamente, comerciala, etc.
Zona: Nufarul (Piata)
ID Ofertă: T-7240
Alte detalii: Teren excelent pozitionat langa ansamblul rezidential Nufarul-Plaza, toate utilitatile.
Persoana de contact: Ardelean Lucian
Telefon: 0788/20.90.20
E-mail: [email protected]
Web
Design
Vanzari l Inchirieri l Oportunitati l Despre l Contact
1 din 1
2/10/2012 5:25 PM
1 din 2
Vanzari
Inchirieri
Despre
Contact
Legislatie
Cariere
Detalii
Teren de vânzare
Suprafaţa: 444 m 2
Front stradal: 65 m
Destinaţie: Cladire de birouri cu autorizatie de construire
Zona: Central-Clubul Constructorul
ID Ofertă: T-939
Alte detalii: Teren cu dublu front stradal, cu proiect autorizat pentru cladire de birouri compusa din S+P+2E cu suprafata construita
desfasurata de 1538 mp + 120 mp terasa.
Telefon: 0788/20.90.20
Alte imagini
2/10/2012 5:11 PM
2 din 2
Web
Design
2/10/2012 5:11 PM
1 din 1
Vanzari
Inchirieri
Despre
Contact
Legislatie
Cariere
Detalii
Teren de vânzare
Suprafaţa: 1716 m 2
Front stradal: 28 m
Destinaţie: rezidential si comercial
Zona: Central-Primariei
ID Ofertă: T-1294
Alte detalii: Teren situat in zona centrala a municipiului Oradea, cu utilitatile: drum asfaltat, curent electric mono/trifazat, apa retea,
canalizare si termoficare (toate pe teren). Terenul dispune de trei corpuri de cladire in supr.constr. de 452mp.
Telefon: 0788/20.90.20
Alte imagini
Web
Design
2/10/2012 5:24 PM
1 din 2
Vanzari
Inchirieri
Despre
Contact
Legislatie
Cariere
Detalii
Teren de vânzare
2
Suprafaţa: 5625 m
Front stradal: 70 m
Destinaţie: Zona rezidentiala
Zona: Central-Ciuperca
ID Ofertă: T-1201
Alte detalii: Teren situat in zona colinara a orasului (Dealul"Ciuperca"), ofera panorama spre centru si parc. Utilitati: drum asfaltat, curent
electric, apa retea si canalizare. Terenul este optim din punct de vedere al pozitiei si formei pentru dezvoltarea mai multor unitati de locuit
uni/plurifamilial.
Telefon: 0788/20.90.20
Alte imagini
2/10/2012 5:26 PM
2 din 2
Web
Design
2/10/2012 5:26 PM
IMG_3567
IMG_3572
IMG_3566
IMG_3568
Tagor - Oradea Land - Photos of the valuated property

VALUATION REPORT

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