The investment transaction activity in Romania recorded total volumes of close to €170 million in the first half of 2023, which is down by around 50% compared to the same period, but the transactions could reach around €700 million by the end of 2023, according to Colliers data.
Colliers’ consultants point out that there has been a substantial slowdown in real estate transactions over the last two years, but it is more like a return to normality. During 2022, the investment volume reached almost €1.3 billion following CA Immo’s office portfolio sale to Pavăl Holding.
“Clearly, rising interest rates and a more uncertain context have created a wider gap between buyers' and sellers' expectations, even though there are a substantial number of projects on the market that can generate significant volume in the second half of the year. How these deals will or will not close will be a challenge for the local market,” says Laurențiu Lazăr, Managing Partner & Head of Investment at Colliers Romania.
In the first half, the logistics and industrial saw leasing activity growing by around a quarter to 500,000 sqm compared to the same period last year. And in the office area, Bucharest recorded an increase in rental volume of over 20% compared to the same period last year to around 160,000 sqm.
In retail, plans for this year exceed 200,000 sqm of new commercial space (though some may be delayed due to the 2024 delays), making it the busiest calendar in over a decade.
Deals involving land for commercial developments hovered around €250 million, almost half of what we recorded for the whole of 2022.
In the residential area, Colliers consultants note an increasing focus by both clients and developers on the residential for rent (PRS) segment. Due to the high interest rates, it is now cheaper to rent than to pay for a mortgage.
“After an absolute effervescence in the period 2021-2022, seen not only in Romania and not only in the residential area, 2023 started with a drop in apartment sales nationwide of around 20% compared to the first half of 2022. High interest rates had their effect, and purchasing power eroded by inflation. However, the pace of apartment sales is comparable to that of 2018 and about 30% higher than in 2019, so it does not look weak at all," said Silviu Pop, Director CEE & Romania Research at Colliers.
