The total investment volume in Romania has increased by 32% to €79 million in the first semester of this year, compared to the same period of the previous year, according to CBRE Romania’s Investment MarketView H1 2013. Prime properties across the country continue to be attractive both to international and local investors.
“The most active investors in the market are international private equity funds, opportunity funds and local private investors. The attractiveness of the market is influenced especially by a more stable macro-economic outlook, created by the 1.7 - 2.2% GDP increase and the inflation rate decrease to 3.1% estimated for this year,” said Razvan Iorgu, Managing Director CBRE Romania.
Only three transactions were made in Romania during January – June 2013. In the office market, the Lakeview A class building in Northern Bucharest, with an area of 24,000 m², was purchased by NEPI. The other two transactions were registered in the commercial centers market: Mitiska Ventures – InterCora, consisting of eight small operating retail parks, with a cumulative area of 32,000 m², in Bucharest and other cities, and the GTC portfolio, a shares transaction related to Galleria Piatra Neamt, Galleria Suceava and Galleria Buzau, the traded area totalizing 36,500 m².
“The most traded properties in H1 2010 – H1 2013 were office buildings (42%), followed by commercial centers (40%) and industrial spaces (10%). The interest for office and retail spaces will continue to increase, taking into account the development of these sectors and the general appetite for such properties. By the end of this year, the total investment volume could reach the level in 2012 (over €200 million), but it is very hard to repeat the levels in 2010-2011 (over €300 million each year),” added Razvan Iorgu.
Romania is one of the most attractive countries in the Central and Eastern Europe (CEE), together with Bulgaria, in terms of pricing, with prime yields 1 percentage point higher than in Hungary or Slovakia. Therefore, in the first six months of the year, the yield for prime retail in Romania has dropped from 8.75% to 8.5%, due to investors’ increasing interest, the prime yield in the industrial sector has increased from 10.25% to 10.5% due to the lack of transactions, while the yield for prime office spaces has remained stable at 8.25%.
The investment volume in CEE has reached €4.5 billion in the first half of 2013, which means a 61% increase from the figures registered in the first six months of 2012.
The demand for office and retail plots with approved zoning remains high, but the number of such available sites is limited, as a large part has already been traded. There is an interest from investors that realize this is a favorable moment to purchase well located plots of land at low prices.
“The value of properties located outside major cities in Romania will continue to decrease, as sellers compete with distressed properties available in the market,” explained Razvan Iorgu.
Source: CBRE Romania