Romania's investment volume accounted for approx. EUR 395 mln. in the first six months of 2020, a value 17% higher than the same period of the previous year, according to CBRE, leader in the real estate consultancy market. Office buildings were the properties most sought after by investors, accounting for 88% of the volume traded and other similar projects are available for sale, totaling over EUR 350 mln.
E van Wijk has been a tenant of the P3 Bucharest A1 park since 2007 and has gradually expanded, occupying in present a total area of 10,400 sq m, double the volume leased five years ago. The current space includes an office area and the warehouse used to distribute more than 15,000 pallets per month, with more than 50 employees.
„Office buildings continue to attract attention from investors, especially projects located in Bucharest. Currently, there are multiple opportunities for sale on the office market, projects that account for a total value of over 350 million euros, of different sizes and located in various areas, from the center-western part of the city to Victoriei Square", stated Gijs Klomp, Head of Investment Properties within CBRE Romania.
The average value of a real estate transaction was 30 million euros, in the first half of the year, slightly above the average of 26 million euros recorded in the same period last year, according to CBRE Research data.
Contrary to the trend seen in 2019, the real estate projects in Bucharest dominated the investment activity, in the first half of this year, with only one property transacted outside the Capital city (3% of the traded volume). Last year, CBRE assisted the Hexagon group of companies in the sale of a portfolio composed of three office buildings in Cluj-Napoca to the Romanian company Ideal Projects Services, resulting in a transaction of approximately 30 million euros.
Office buildings were the most traded product (88%), in the first six months of 2020, while industrial spaces came in second (8%) regarding real estate investors’ preferences, followed by mixed-use properties (2%).
In terms of yields (investment returns), they maintained a stable pace in the first half, remaining at 7% for office spaces, respectively 7.75% for industrial spaces, according to CBRE Research. In the retail segment, where investors' appetite declined due to the COVID-19 pandemic, yields continued to decompress to 7% at the end of the first semester.
Romanian investors remain active: 7 transactions in 6 months
Romanian investors remained active this year as well, concluding seven transactions in the first six months of the year and thus ranking second in terms of their origin, after Hungarian investors, while the third place was claimed by Greek and South African companies. Some of the Romanian buyers are: Dedeman (The Bridge 3), Ionuț Dumitrescu (partly One Tower, partly One North Gate) and One United (Office 1).
"Since 2014, the prime yield for office spaces in Romania has remained stable, as have prime rents, meaning that our country has much lower capital values compared to the markets in Central and Eastern Europe. Further on, Romania needs intense publicity in order to attract new investors, given that important names from Western Europe are missing from the local scene. However, several new players have been analyzing their entry into Romania before the lockdown period caused by Covid-19 and continue to do so", added Gijs Klomp.
Regarding the overall real estate market in Europe, the volume of investments totaled 129 billion euros in the first half of the year, increasing by 2% compared to the same period last year despite the COVID-19 pandemic, according to CBRE Research. Of this volume, office properties transactions accounted for 41 billion euros. The volume of investment increased by 6% in the first half of this year in Continental Europe, (excluding United Kingdom and Ireland), compared to the same period last year.
2020 it's still a game of two halves! Check the first-half statistics to improve the second-half strategy.
Follow this link & download the CBRE's report on Romania Real Estate Market Outlook for H1 2020.
- Romania's 2020 economic growth affected by the global COVID-19 pandemic. Q2 2020 indicates better performance than expected. Private consumption is on an ascending trend. This pumps a breath of air in everyone's financial lungs.
- Investment wise, in CEE region, Romania and Hungary were the only two countries that registered growth during H1 2020. Right now, in Romania, there are other office properties on sale, with an estimated total value of EUR 350 mln.
- In the Office Market, the dominant trend is the wait-and-see strategy. Tenants are studying their employees and landlords studying them in return. Pay attention to subleases opportunities & landlord incentives package... (give us a shout if interested)
- The Industrial Market is the show off for H1, with 350,000 sq m already transacted. 3 times better than the same time last year! New deliveries in 2020 estimated at 650,000 sq m, the industrial market might be the CRE champion. This is the largest volume delivered in the last 20 years.
- Brick & Mortar retail is on survival mode and online shopping had an unprecedented boost. New high-street concepts could trigger an awakening of this sleeping-beauty market!