Starting 2008, the few major investors the local real estate market has managed to lure have decided to leave or, at best, maintained their positions without making new acquisitions. Thus, in the past six years, the few deals that were sealed have been particularly clinched by opportunist investors seeking bargains.
“One of our objectives is to attract investors that should have more confidence in Romania. The yield gap between Bucharest, with 8% a year, and Warsaw, with 5.9% a year, is unjustified. The gap is given by the number of investors battling for one property and by their skepticism to enter Romania,” Iorgu told ZF.
“Otherwise, rents in Bucharest have started falling, so that they are no longer posing any risk, and companies have started signing long-term rental contracts. Moreover, the gap between funding costs is no longer as wide,” added Iorgu.
He also says deals of this type are not sealed “overnight”, but expects at least two deals with prime properties of Bucharest to be sealed until the first quarter of next year.
Lately, there’s been information about the possible sale of Promenada mall of Floreasca, Green Court office project of Barbu Vacarescu or logistics park Europolis Park. The deals are likely to spur the market.
Romania competes with Poland not only for real estate investors, but also for IT, BPO and production companies, and salary costs and workforce availability make the main strength of the local market in this perspective.
CBRE has been lately involved in the deals by which Germany’s Deutsche Bahn decided to develop a services center in Bucharest in Hermes Business Campus of Pipera and also assisted an automotive group in signing the contract for the development of a new plant in southern Moldova.
According to Finance Ministry data, CBRE Real Estate Consultancy generated revenue of EUR2.6 million in 2013, and Iorgu says he expects revenue to go up by at least 50% this year on the development of all business lines. If the target is met, CBRE is likely to reach revenue of EUR4 million this year.
Since early 2013, when CBRE had 32 employees, the company’s team has augmented to 80 people.
“We want to open another two business lines next year. This year, the office department was the number one driver, but we also have major mandates in the retail sector, we manage Sun Plaza and handle the renting of projects ParkLake Plaza and Veranda. The objective is for all departments to grow and operate as profit centers,” concluded Iorgu.
(English version by Catalina Apostoiu)