New investors increase competition for the best assets in Romania

Through the acquisitions made and the assets explored, these investors increased the competition for the best available assets on the market, contributing to a slight decrease in the investment yields, a process that is expected to continue in the following quarters.

In terms of investment volume, the most active new players in the local real estate market have been in the last 5 years MAS Real Estate, Atterbury and Lion's Head Investments, with South African shareholding, Cerberus, Morgan Stanley and White Star in The United States of America, respectively GIC (Singapore) and CIC (China). From Europe, the local market has attracted new investors, especially from the region, from countries such as the Czech Republic (PPF Real Estate) and Hungary (Indotek).

Analyzing the acquisitions of companies that already had a presence on the local market, the largest acquisitions were made by NEPI Rockcastle, CTP and Globalworth, leaders of the retail, industrial and office segments in terms of portfolio assets, together with the local Dedeman group, the leader of the DIY market, which by two acquisitions became a significant player on the office market in Bucharest and Cluj.

Tim Wilkinson, Partner, Capital Markets, Cushman & Wakefield Echinox added: “As we continue to see record yields set in Poland, the Czech Republic and Hungary, prime yields in Romania continue to show resistance to any significant compression. There are clear signs that for prime assets below €50 million yields are starting to settle below 7% and we expect this trend to follow for newly delivered, large assets over €100 million within the next 12 months. This steady movement and limited volatility suggest a new level of maturity for this market, offering investors an attractive hedge against other CEE markets.’

Tim Wilkinson

Partner, Capital Markets, Romania
Cushman & Wakefield Echinox

Tim Wilkinson is Partner, Capital Markets Cushman & Wakefield Romania. He joined the office in Bucharest in 2004, and significantly contributed to the development of the business in Romania, predominantly coordinating the advisory services for occupier and landlord clients in the office, retail and industrial sectors, as well as supporting the development of the professional service departments, including valuation, investment, research and property management activities. Tim’s real estate background includes over 17 years of experience in the CEE region, working within the DTZ Poland and Hungary offices, as well as working in the DTZ London office. He has been involved in some of the most pioneering and significant investment deals in Romania over the past 12 years, including the acquisition of Domnesti Business Park (by IOG at the time), Mercury Logistics Park by Heitman, Cefin Logistics Park by Europolis and the joint venture between GE Real Estate and Helios Phoenix. More »

Overall, between 2015 and 2019, 137 transactions were recorded with a total value of approximately €4.2 billion, the average value of the transaction being over €30 million. The most traded properties were office buildings, with a volume of almost 1.8 billion euros and a share of 43% of the total, followed by commercial spaces, with a share of 30%, respectively industrial spaces (20%).

About 67% of the investments were directed to properties located in Bucharest, with Cluj-Napoca being the next attractive market with a share of approximately 7% of the transaction activity.