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Substantial increase in number and volume of investment transactions in Romania in H1 2014

Investment volume for Romania in H1 2014 up 222% y-o-y, with an increased diversity in terms of type and use of the properties sold, as well as profile of buyers, according to the latest research about the capital markets from global property advisor CBRE.

The investment volume for H1 2014 was of EUR 402.4 million for a transacted surface exceeding 692,000 sq m. This represents an increase of 222% versus H1 2013 and 17% over full volume for 2013. A total of 15 transactions were recorded, highest number since 2008, with an average volume size of EUR 26.8 million, similar to last year.

Profile of transactions was quite diverse in terms of use (office segment leading with 58% of total volume), in terms of type of properties (prime properties generating 55% of total volume), in terms of buyer typology (developers and institutional funds the most active, out of which Globalworth generating 54% of volume). The type of properties transacted is quite diverse, ranging from prime properties (like Charles de Gaulle Plaza), to secondary properties (like Auchan Pitesti Gavana) and distressed properties (Pic Pitesti and Pic Oradea).

On the back of increased investors’ interest, prime yield for office segment compressed at 8%. Other prime yields stable. In terms of prime rent, evolution relatively stable: EUR 60/sq m/mth - shopping centre, EUR 18/sq m/mth - office and EUR 3.8 /sq m/mth- industrial.

Razvan Iorgu, Managing Director CBRE Romania declared: “This increase in volume of investment deals comes on the back of increased investors interest in prime products, especially office and retail located in Bucharest. With attractive returns, a growing economy and demand from tenants’ steadily increasing q-o-q there are sufficient arguments for other major investment transactions to finalise in the next 6 – 9 months”.

In respect to land transactions, we have observed also a rise in terms of number, volume value and type of properties sold. We have identified three major categories of buyers of land properties: retailers (mainly Lidl, Dedeman, Kaufland, Leroy Merlin) looking to buy properties in prime and secondary cities, industrial occupiers interested in plots of land for the development of factories (Dr. Oetker, Best Food, Continental) and real-estate developers securing prime properties in major cities for future landmark developments (NEPI, Globalworth and Kiseleff Development).

Published on: 24 07 2014

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