More real estate deals will be closed once central banks start to cut interest rates, while Romania is still seeing investment geared towards sustainability in its commercial and residential sectors, concluded speakers of the dealmakers panel of Property Forum’s Spring Networking Party, held in Bucharest.
Cristian Ezri, Head of Investment Eastern Europe & UAE, Yellow Tree, who chaired the panel mentioned that interest rates are starting to fall for euro financing.
On interest rates, we see a slow decrease of benchmarks on euro and leu, stated Romulus Andrei, Director, Banca Transilvania. He added that Banca Transilvania is not more or less conservative than in the last 2-3 years on real estate funding.
According to Andrei, banks have ESG targets and look for good assets with green buildings accreditations. Thus, he advised owners of older buildings to upgrade them under ESG standards as soon as possible.
Bogdan Bălașa, General Manager, HILS Development, suggested that starting H2 2024, the interest rates will fall, and we will see better funding conditions for residential buyers and developers. He also predicted that more funds from bank deposits would be going into home purchases.
Speaking about Romania’s economy, the executive pointed out that yields are good in the country and that in residential there is still a shortage of new homes.
On real estate investment, it is positive that transactions are going, but we see more consolidation in the buyers' universe, explained Gijs Klomp MRICS, Business Development Manager, WDP.
WDP’s core focus is industrial and logistics, while its tenants are starting to ask for additional facilities such as accommodation units for employees or health services. Speaking about market perspectives, Klomp mentioned the growing interest in production facilities in Europe.
The perspective has shifted on dealmaking, and transaction execution in the past 12 months, starting from Q3 2023, stated Mihai Paduroiu, CEO of Office Division, One United Properties. He expects larger deals to be completed by year-end as central banks start to cut interest rates. The CEO predicted that more central banks would follow after the Swiss National Bank cut its main interest rate in late spring.
On the office side, Paduroiu pointed out that Bucharest has less than one million sqm of real modern offices. Furthermore, One United Properties has three more office buildings permitted in One Cotroceni Park, each roughly 20,000 sqm. However, development will start only under pre-leasing or build-to-suit agreements.
Alex Skouras, Managing Partner, Alesonor, said that in residential, there is demand from end users who are looking for higher standards of living. More buyers are asking about heat pumps and thermal insulation solutions.
Moreover, Skouras mentioned that the biggest opportunity for Romania is to incentivize more investments in sustainable buildings.
Blockchain is being used to democratise real estate investments, mentioned Michael Topolinski, Managing Director of Investor Relations, MetaWealth. The company has already attracted investors from 23 countries in Romania’s residential sector.
Topolinski added that MetaWealth has attracted hundreds of investors who have not been involved in this sector until now.
