This interview was first published in Property Forum's annual listing of "The 50 most influential people in Romania's real estate market”.

What are the key development highlights you anticipate for Hagag Development Europe in 2025 across your ongoing and planned projects? 

When it comes to development activities, this year appears to be unquestionably effervescent, regardless of whether we are discussing ongoing or planned projects. We were already on site in January, as we are close to finalising works on both the commercial component of H Pipera Lake, and on H Știrbei Palace.

The revamping process of H Herăstrău Park has already started and will be completed this summer. Same with the fit-out works for our first tenant.

The building permit for phases II and III of H Pipera Lake is expected any time now, while for H East Residence – where structure works for all four buildings are close to completion – we have received approval on the design theme upgrades, and are now putting together the final details before reprising construction. On top of this, our team is advancing with the permitting process for the conversion of H Vasile Lascar – which officially marks our entry to the hotel market. 

Staying in this market segment, I am delighted to share that we have registered significant progress for H Susai as well. A couple of months ago we selected the lead architecture firm that will handle design and planning activities, the masterplan was recently completed, we started discussions with a potential operator, and we are now working on finalising the concept.

How much has Hagag Development Europe invested in Romania to date, including current projects under development? 

Our investments in Romania so far exceed €150 million, with roughly €360 million to be invested in the following years into 9 projects currently under development in Bucharest, Pipera and Predeal. We are talking about ongoing and pipeline developments spanning across multiple market segments like residential, office, retail, mixed-use and hotels.

What is tenant demand for your new Știrbei Palace project in central Bucharest and what will be its strong points in the eyes of retail tenants and shoppers? 

With the development of H Știrbei Palace we have achieved something quite outstanding and, at the same time, unique.

A milestone that not many can gloat about: driving demand for a new market and creating a sense of desire. And I say this because, although we have already secured a long-term tenant for the Palace, we keep on getting inquiries from luxury brands and HoReCa alike. When it comes to strong points, we are convinced that the property's aesthetics, impressive history, and distinctive architecture, together with its exceptional positioning is what captivated our tenant's attention.

Likewise, we are positive that the above, alongside the exclusive shopping experience it promises to offer, will captivate the public as well. But rest assured that there is more to this development than meets the eye, hence the inauguration of H Știrbei Palace will mark a national premiere: the opening of Romania's first luxury department store.

This year, Știrbei Palace will affirm its status as a luxury shopping destination by gathering some of the most prestigious international brands in the world, aligning Bucharest to the major world fashion capitals. Moreover, the refined atmosphere will be complemented by a fine dining restaurant and an in-store Champagne Bar, redefining the art of hospitality in an iconic setting.

What are your perspectives on the demand within the Bucharest residential market looking towards 2025, particularly in light of the limited new supply anticipated? 

As we see it, demand for residential will continue this upward trend. Every day, we deal with buyers that either acquire a residential unit for the first time, for their own personal use, buyers that are building an investment portfolio, or buyers interested in upgrading their current living space. Regardless of their reasons to purchase, our CRM registers around 300 qualified leads per month. Unfortunately, our stock cannot respond to this growing demand, though within our two residential developments that address the middle market - H East Residence and H Pipera Lake, we currently have 728 units listed for sale.

More than half of these units have already been pre-contracted, respectively reserved. Furthermore, for H Primăverii 1 and H Eliade 9 – two of the most exclusive addresses in Bucharest that will bring to the market 53 upper-premium apartments, we have a waiting list of over 70 potential buyers expecting for us to break ground. So, there is no dispute here - living is a basic need, and we all need to live somewhere. With Bucharest's population increasing year-on-year, it is only natural for demand to be so vivid.

What are your projections for the performance of Hagag Development Europe's office portfolio in 2025, and do you foresee the trends of demand for smaller spaces and boutique buildings continuing to shape the market?

We are actually very optimistic about the dynamics of the leasing activity this year, mostly due to the good performance that our office portfolio registered over the past 12 months, and, of course, to the inquiries we have been managing lately. In the context of hybrid work and economic instability, companies tend to manifest an increased appetite for smaller surfaces or serviced offices, and this looks like a trend that is here to stay.

At least for a while, boutique buildings will keep the momentum going. And demand – specifically demand for northern Bucharest, is what encouraged us to take over the mixed-use building on 23-25 Ghețarilor street and add H Herăstrău Park to our offer. We have already signed our first tenant in Herastrau, and we are currently discussing the lease of approximately 1,500 sqm of office space here. What is more, we have recently secured a new tenant for H Tudor Arghezi 21, leading to a 96% occupancy rate across our two projects in the CBD area. In addition, H Private continues trending and enjoys a constant occupancy rate of about 80% - 85%.

Given the reported delays in obtaining PUZ and building permits in Bucharest, what strategies is Hagag Development Europe employing to navigate these regulatory hurdles as you plan your developments for the medium term? 

A couple of years ago we decided that it is time to explore opportunities outside Bucharest, and we have been prospecting the market ever since. This does not mean that we are turning our back to the Capital – hence a significant part of our investments is concentrated here and we do have ongoing projects that we will not dismiss. But while the storm settles, we are committed to go national. For instance, we are looking closely at Brașov, Cluj, Constanța, and Timișoara, and we are willing to spend about €50 million on land acquisitions in at least one of these secondary markets. The plan is to secure some new properties across the country and start working on at least one new development in the following five years.