Real estate projects worth around EUR 500 million are expected to go bankrupt in 2011, according to Coldwell Banker Affiliates of Romania. The volume of projects which will end up bankrupt will thus double on this year's, according to Valentin Ilie, CEO Coldwell Banker Affiliates of Romania.

Insolvency will hit more residential projects and companies which own land plots. Retail spaces will remain the most exposed to insolvency and bankruptcy, mainly shopping centers without strong anchors, in secondary areas or small cities where the competition is high.

“Two years of crisis have gone by and the financing institutions have started to gain experience and courage. Banks have created specialized team on forced executions and they have had all the possible discussions with the project owners, analyzed all the options, some shareholders brought in new capital but to no success, so insolvency or bankruptcy are the only alternatives,” said Valentin Ilie.

Some projects, however, could restructure, even if they will end of in the portfolio of a bank.  Coldwell Banker Affiliates of Romania currently administrates insolvent or bankrupt assets worth EUR 20 million in book value.

editor@romania-insider.com