How has the COVID-19 pandemic impacted the property investment market in Romania? What are the biggest challenges companies face these days? Is the wait and see period really over in Romania? Four experts tried to answer these questions and more at SEE Property Forum 2020, a hybrid event organised by Property Forum and RICS. We summarised the highlights of the discussion, moderated by Codrin Matei (Crosspoint Real Estate).
From the financing perspective, there are no changes in liquidity and interest rates. Still, there are significantly fewer queries by investors, compared to the 3-4 quotes per week in February. This obviously represents the lower appetite for financing real estate investments these days. Banks are not necessarily looking at the yield, there are also other important indicators, assessed Romulus Andrei (Banca Transilvania). In terms of asset classes, industrial is the most interesting right now with the office and hospitality sectors being hit heavily by the pandemic. The recovery of the residential market, on the other hand, is surprisingly strong, the sector performs quite well, he added.
There is no dramatic change in yields in the industrial segment, as there is a general compression in Romania year on year, explained Ana Dumitrache (CTP). Several transactions were closed even during the pandemic period and there are three closings left until the end of the year where no adjustments have been made. From this perspective, we can see no negative trend – not yet, as the period is still not over, she added.
According to her, the biggest challenge is to keep up with everything in a working from home environment, while all the construction sites, warehouses as well as property managers have to be kept safe. All the decisions are slower than earlier when all the stakeholders and other participants used to be in the same building.
It is still unknown how the working from home policies, social distancing and global recession will affect office demand. While Q1 2020 was full of optimism, all new investments were stopped in Q2 in the office sector, the focus has shifted towards safety measures, pointed out Mihai Zaharia (Globalworth). In Romania, fortunately, there was no aggressive yield compression, the prime office yield is quite stable at around 7% for the last few years.
The lack of predictability in the market is the biggest challenge right now. Also, adopting new technologies is more necessary than ever, proptech will show the benefit of implementation, he added.
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