The investment volume in H1 2019 amounted to almost 410 million euros, a 6% increase compared to the similar period of last year, when the corresponding figure for investment transactions was of 386 million euros, according to Cushman & Wakefield Echinox calculations and estimates.
At the Central and Eastern European (CEE) level, the Romanian market attracted around 10% of the total investment volume of 4.1 billion euros recorded in Poland, the Czech Republic, Slovakia, Hungary, Romania and Bulgaria. The first place was occupied by the Czech Republic (1.9 billion euros, with a share of 45%), which surpassed Poland, the country where an investment volume of about 1.3 billion euros (31%) was registered. Romania ranked 3rd, surpassing Hungary (7%), Slovakia (5%) and Bulgaria (2%).
At the local level, the most active sector was again the office sector, with a share of 53% of the total volume, followed by retail (28%), while the industrial and logistics sector had a share of 18%. In regards to georgraphical distribution, Bucharest attracted 40% of the total real estate investments in Romania, being followed by Cluj-Napoca with 32%, while the other transactions were concluded in several cities.
Tim Wilkinson, Partner, Capital Markets, Cushman & Wakefield Echinox: “Regarding the H1 activity, we consider that an important factor that negatively influenced the investment volume was the banks' reluctance to finance such acquisitions due to the uncertainties caused by the fiscal measures announced by the government at the end of last year. Subsequently, the government re-assessed and revised those measures, so that the impact on the banking system was much lower than initially estimated, which unlocked corporate lending and which will therefore accelerate the closing of transactions in the second part of the year. Thus, we anticipate that this year’s investment volume will substantially exceed the 1 billion euros threshold.ˮ
The largest transaction in terms of value was concluded by Dedeman, which purchased The Office project in Cluj-Napoca, with a total rentable area of 63,000 sqm, for 130 million euros, from NEPI Rockcastle and Mulberry Development. This transaction marks the consolidation of Dedeman's portfolio, which is becoming an increasingly important player on the local office market. By acquiring The Bridge project, Dedeman had also made the largest transaction on the Romanian real estate market in 2018.
Another important transaction was the one related to Oregon Park C in the Floreasca-Barbu Vacarescu area, the last building of the Oregon Park project, which was sold by Portland Trust to Lion's Head Investments for an estimated 60 million euros.
When it comes to the industrial segment, the most relevant transaction was the acquisition of the A1 Logistic Park project located at km 13 of the A1 motorway by CTP, the largest owner of industrial spaces, for approximately 40 million euros.
Tim Wilkinson, Partner, Capital Markets, Cushman & Wakefield Echinox: ”We are witnessing increased competition between a significant number of investors, especially in regards to premium real estate assets. Those investors are currently paying more attention to completing the transactions in which they are involved, an aspect that will result in a yield compression over the short and medium terms. At the same time, we consider that, besides the office and industrial transactions, we will see increased activity in the hospitality segment.”
Cushman & Wakefield Echinox is a top real estate consultancy company on the local market, operating in all real estate market segments. The company’s Capital Markets department is involved in the processes of selling a number of real estate assets in Romania with a market value of over 300 million euros.
The exclusive affiliate of Cushman & Wakefield in Romania, owned and operated independently, Cushman & Wakefield Echinox, has a team of over 60 professionals and collaborators offering a full range of services to investors, developers, owners and tenants. For more information, visit www.cwechinox.com .
Cushman & Wakefield is a leading global real estate services company with 51.000 employees in more than 70 countries, helping owners, occupiers and investors to optimize the value of their real estate. Cushman & Wakefield revenues of $8.2 billion come from core services of investment & asset management, capital markets, agency leasing, tenant representation, asset and facility services, project management, valuation & advisory. To learn more, visit www.cushmanwakefield.com .