(P) The potential of investing in a luxury residential project

10.08.2020 ZF English

Luxury residential projects come with competitive advantages compared to other segments of the real estate sector, mainly when it comes to superior housing experience and the potential to increase the value of the dwelling on a long-term.

The facilities developed in a premium compound emphasize the well-being of the inhabitants, an aspect that the buyers in the luxury segment especially appreciate. The design of a property contributes to the physical and mental well-being of potential buyers of a luxury dwelling, reveals an internationally study conducted by Knight Frank.

In the top of the interesting attributes for them are also the access and quality of the local wellness facilities, but also the existence of green spaces for relaxation and leisure activities in the vicinity of the compound.

The prioritization of health and well-being is becoming more and more present among young professionals, being so far qualities sought more by executives with significant experience in the business environment.

With clear direction to sustainability, energy efficiency, premium quality, elegance and closeness to nature, IMPACT Developer & Contractor created Luxuria Residence project for people who build their own success every day.

Located in Expoziţiei area, close to Herăstrău Park and within a 10-minute drive to Kiseleff Park, the ensemble benefits from 9,650 sqm of green spaces which includes a private park of 2,500 sqm. Underground parking, a lounge for networking and remote work, a fitness center, a playground are other facilities that contribute to the wellbeing of the residents. Access to the large office centers in the city is easy, with multiple options available for relaxation and leisure.

The medical situation in the first half of the year reset the expectations of some people regarding the living experience. For example, some will want an apartment with access to the indoor garden or will consider purchasing an apartment with a larger usable area and even a dedicated office if they work from home. Improving the housing experience is on the agenda of many high-income Romanian people who have to manage the uncertainties generated by the medical crisis.

Investing in a premium home

If you choose to buy an apartment in a luxury investment compound, you will be keen on a certain yield, that will lead to the return on investment in a reasonable time frame with a decent profit.

Economic risks cannot be ignored when it comes to the effects on the real estate sector. However, premium real estate assets in very good locations manage to successfully overcome the challenges of the market.

For example, the current health crisis has impacted the residential real estate sector, especially in the case of low-priced properties. Instead, the demand for housing in the price segment of more than 2,000 euros per sqm will remain stable and no change is expected of potential buyers of high-end properties, note the analysts of JLL agency.

In fact, the housing stock in the high-end segment represents only 6% of the total residential market in Bucharest.

The development activity in the luxury real estate segment also considers the growth potential among the community of Romanian millionaires. If in 2019, there were 55,889 Romanian people with fortunes over 1 million dollars, their number could increase by 42% through to 2024, according to "The Wealth Report 2020".

Also, in 2019 there were 276 people with a net worth over 30 million dollars in Romania. By the middle of the next decade, the number of Romanians with fortunes higher than 30 million dollars should increase to 392, the report also shows.

Investors are constantly looking for industries that generate better profitability in a low-risk environment. Already, the return generated by a real estate property reaches 6-7% per year, this being a better result than the one obtained in the case of investments in various financial instruments, where the risks can be much higher.

IMPACT vision in the luxury industry

By developing Luxuria compound, IMPACT Developer & Contractor builds the opportunity to experience a select lifestyle in a luxury setting with energy efficient buildings, generous spaces, multiple facilities and premium finishes.

This is the first residential project in Bucharest that received the BREEAM Excellent Certification from Build Green, being included in energy class A and in the category of "green buildings". This aspect is very important in the analysis of the long-term use of space and at the level of low costs on the part of energy consumption that can turn into higher profits for the investor.

Currently, the residential complex is in the third phase of development, with 130 apartments to be delivered by April 2021. In the previous phases, 500 apartments were completed.

The offer of Luxuria Residence is varied, starting from 91.890 Euro + VAT for a 50 sqm single room, to a 5-room duplex with a total area of ​​300 sqm. The prices of the apartments with the most generous areas in the premium locations as a whole can exceed half a million euros, this being an indicator of the development of the demand for top assets on the luxury real estate niche in Bucharest.

Luxuria Residence is the first project of IMPACT Developer & Contractor in the luxury real estate field and the first objective to implement the highest level of quality, through the energy efficiency certificate. As an extra validation of the construction quality, the project has been awarded by the International Property Award with the title "Architecture Multiple Residence".

The company has been listed on the Bucharest Stock Exchange since 1996 (IMP stock symbol) and is one of the most active local developers currently working on two other large projects in Bucharest (Greenfield) and Constanţa (Boreal Plus).