The investments transaction market in Romania totaled around €500 million in 2023, down from a record of more than €1.2 billion in the previous year, in line with lower deal volumes that have been recorded across region and the major international markets, according to a Colliers Romania report.
Last year’s result was supported by M Core’s purchase of 25 retail parks from Mitiska REIM in a deal worth €219 million.
Colliers’ experts suggested that Romania’s deals under negotiation at present have a combined value of around €500 million, but this figure could grow if more transactions are successfully closed. The industrial, office and retail sectors could drive the investment market during 2024.
Silviu Pop, Director CEE & Romania Research at Colliers, suggested we could still see local yields move out a bit more to improve the country’s relative attractiveness.
The agency’s data shows that in the Bucharest office segment there will be a single project delivery spanning 16,000 sqm. According to Pop, this would be the lowest pipeline since at least 2004-2005, when the office market was in its early development stages. With a lower volume of new deliveries, rents for prime offices in key areas rose by around 10% last year. Although total demand reached a fresh high close to 390,000 sqm, new demand for offices was low and this trend could continue this year as well.
Meanwhile, in the industrial segment rents rose by more than 10% yearly in 2022 and 2023, and Colliers’ consultants predict that demand for quality space will remain high, especially due to the ongoing re-shoring process. At the end of 2023, Romania’s industrial stock was edging closer to the 7 million sqm, placing the country third in the region behind Poland and Czechia.
In the retail sector, we might see more big projects coming on the market this year, after years in which smaller retail park schemes have driven development activity.
“Following the delivery of the biggest retail scheme in many years in 2023, a mall in Craiova, we acknowledge the rising interest for large projects, both standalone and integrated in major mixed-use projects. 2024 will see works continue or start on a multitude of such schemes throughout the country,” said Pop.
In the housing market, demand is expected to pick up this year as wages grow and the interest rates start to fall going into H2 2024.
This year, we could see fewer land transactions as developers are still facing uncertainties in the commercial and residential segment.
Pop said that many investors have been seeking some opportunities and discounts. However, sellers are not willing to offer that many as they have not felt significant pressures like, say, during the 2009-2011 period.
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