Meta Estate Trust is a portal between the capital market and the real estate investment market, said Alexandru BONEA, CEO of Meta Estate Trust, at the Capital Market Forum organized by Financial Intelligence. He explained:
"Meta Estate Trust has proposed a business model that is unprecedented in the Romanian market and different from the existing models in developed markets in Western Europe or the United States.
The real estate market - especially the residential market - tends to develop in very specific ways in the area it belongs to. In real estate, there are opportunities on both the upward and downward slopes, and I believe we will reach a stage where we can exploit these opportunities.
As for development plans, we want to increase assets through bank leverage and bond issuance. Some of our business lines are bank-financable - banks understand the source of repayment and the guarantees we can offer - and I believe that the other business lines can be financed through bond issuance on the capital market, guaranteed. In this sense, without raising more capital, we believe we can double our assets just through this type of financing."
When asked about potential investment in Meta Estate Trust, Alexandru Bonea said:
"There are several investment methods, mainly two very different strategies with different risk profiles and returns. There is the buy&hold strategy, which aims to generate recurring income from income-producing assets, the returns are generally low but stable and the investment risk is low. On the other end, we have activities related to the real estate development market, where the returns are high, generally the risks are high too, but if they are well analyzed and well managed, we believe that we can share this benefit with Meta Estate Trust shareholders. We propose a hybrid model to investors in which we pursue both strategic pillars and want to have investments in both income-generating assets and higher-yielding investments related to the real estate development market."
Regarding the taxes that the government wants to impose on the real estate market, Alexandru Bonea said: "We are closely watching what the government is doing because the real estate market depends directly on how the government decides to change its fiscal policy. We are not very afraid of increasing the VAT threshold from 5% to 9%, but we are closely watching the tax changes regarding microenterprises. A large part, over 50% of real estate transactions, are carried out with their own capital. In this sense, microenterprises were a very good source for buyers to withdraw capital from their company with a considerable tax benefit and to fuel this market of transactions with their own capital.
The changes regarding microenterprises generally affect the traditional sales market, where there are individual buyers who buy apartments for consumption or investment purposes. On the other hand, a significant part of our portfolio consists of larger companies that are capitalized and will be able to meet their payment obligations. In this sense, we are exposed to different market segments and the risk is considerably reduced compared to a punctual investment in a single market."
Regarding a potential real estate crisis, Alexandru Bonea said: "A potential real estate crisis will come with opportunities, which we analyze very carefully. We look at what we can find in workout departments of banks because assets that go through the process of being executed through foreclosure are transferred free of encumbrances and at a considerable discount."
"The appetite of investors for the real estate market is currently low," says Alexandru Bonea explaining: "Individual investors who buy apartments to generate recurring income now have a reduced appetite because inflation is high, the reference interest rate is high, their business plan at the moment does not make much sense because sometimes the interest rate even exceeds the investment return, but at the same time, if we see a little help from banks through promotional fixed interest rate programs, I believe that both the sales market and the number of transactions will increase."
