At ca. €5.6billion, H1 2017 represented an almost 10% increase over the same period of 2016 and is just short of the highest first half year regional investment volume which was recorded in 2007 (€5.7 billion), according to JLL’s CEE Investment Market report.
We have again recorded continued appetite from investors for product across the entire region.
The first half year breakdown saw the Czech Republic pull in an impressive H1 volume to bring its share to 37%, followed by Poland (29%), Hungary (13%), SEE (other CEE) markets (9%), Romania (9%) and Slovakia (3%).
With a strong H2 pipeline, we expect another record year. Our forecast for the full year could see CEE regional volumes reach ca. €13.0billion which would mean a new record over 2016 which holds the current record at €12.56 billion.
The H1 2017 property investment volume for Romania is estimated at €485 million, a value almost 43% higher than the one registered in the same period of 2016 (€337 million). The number of transactions increased, with the average deal size standing at approximately €25.5 million.
Bucharest accounted for just over 25% of the total investment volume, less than in the same period of 2016, showing that liquidity in secondary cities has improved significantly.
Market volumes were dominated by retail transactions (70%), while industrial, office and hotels accounted for over 13%, 11% and 6% respectively.
The largest transaction registered in first half of 2017 was the acquisition of 50% of Iulius Group’s retail and office portfolio (Iulius Mall Cluj-Napoca, Iulius Mall Iasi, Iulius Mall Timisoara and Iulius Mall Suceava and 3 office buildings) by South African group Atterbury. This is the first acquisition of the fund in Romania, buying shares in one of the largest retail owners in the country.
The most notable office transaction was the acquisition of ART BC 7 by HILI Properties from a company owned by a local entrepreneur for approximately of €30 million.
In industrial, the largest deal in the first half of the year was the acquisition Renault Warehouse Oarja by Globalworth, for approximately €42 million.
The first half of 2017 marked the entry of several new names on the Romanian real estate market, either through the purchase of regional platforms or individual assets. Among them Atterbury, who already invested in the region in Serbia, U City Public from Thailand and Hili Properties.
Market fundamentals remain robust. The macro-economic forecast for Romania is positive. The country was the EU’s top performer in the first quarter of 2017(with GDP growth estimated at 5.7%) and is expected to hold this position throughout the rest of the year. Occupier demand remains high across all market segments and is close to the record high levels registered in 2016. Availability of quality product is increasing and there is still significant yield spread between Romania and Poland or the Czech Republic.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $136 billion. At year-end 2016, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 77,000. As of December 31, 2016, LaSalle Investment Management has $60.1 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com
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