Commercial property investment in Romania amounted to €202 million in Q1 2024, up by 69% compared to the same period of last year, with retail accounting for around two-thirds of the deal volume, according to a Colliers report.
Overall, total investment volume in the six CEE countries fell by 15% compared with the first quarter of 2023, to around €1.2 billion euros, in line with the dynamics in other international markets. The Czech Republic became the region's new leader, with investment volumes accounting for 46% of the total of the six largest CEE countries, overtaking Poland, which had a cumulative share of 30% of the deals.
“There remains a disparity between the price expectations of buyers and sellers. Various factors affect returns and liquidity, including interest rates, maturity, loan terms, and ESG compliance, among others. However, the primary challenge persists in the cost of financing, currently ranging between 5% and 5.75% for all-in loans, influenced by persistently high interest rates,” said Laurențiu Lazăr, Managing Partner & Head of Investment at Colliers Romania.
Bucharest stands out with one of the highest investment returns in the region for industrial, office, and retail sectors, boasting returns of 7.5% for prime industrial and office assets and 7.25% for retail properties, according to Colliers.
The agency added that the growth momentum in dealmaking across Romania could continue if the European Central Bank moves to cut the interest rate considering that the biggest share of real estate financing in the country is executed in euros.
