Commercial property investments in Romania could hover between €700 and €900 million in 2023, slightly below the average of recent years, with new deals set to be driven by industrial and office projects, according to JLL.
The fall in investment comes after a record of 2022, with total transactions amounting to more than €1.3 billion.
In the first quarter of 2023, the commercial investment totalled approximately €133 million, of which the industrial sector attracted 45%, while the office segment accounted for 35%, hotels 14% and retail space around 6%.
Bucharest attracted almost 45% of the total investment volume in Q1, followed by Timișoara with 23% and Constanța with around 10%.
In the office segment, the biggest deal was the sale of One Herăstrău Office, while in the industrial segment, the largest transaction was CTP’s acquisition of FM Logistic’s warehouse portfolio in Romania.
"As a result of a 2023 increasingly challenging outlook, both investors and lenders have become significantly more cautious in their underwriting process. Such changes reflect directly, after a decade of accommodating monetary policy, the unprecedented uncertainty surrounding cash flow and valuations forecasts as well as ongoing structural changes affecting the real estate industry. On a positive note and despite existing headwinds, liquidity remains available where transactions are reflecting, for both buyers and sellers, strategic importance and when investor’s expected returns are met," said Maxime Otto, Capital Markets Consultant at JLL Romania.
Prime yields increased in Q1 by 0.25 percentage points for office (to 7.25%) and retail (7.5% for shopping centres and 8.00% for retail parks) and stagnated for industrial (7.5%).
