Also, 70% of investors active on the land segment say they plan to conclude all or at least some of the ongoing transactions, as per a survey on the land market, conducted among 115 professionals active on the real estate segment.
Most real estate investors (64%) want to better understand the current situation before making any investment-related decisions. However, nearly a quarter of participants in the Colliers International survey on the investment market say they would invest even in the context of current uncertainties if there is the opportunity of a transaction under favorable conditions.
Capital Bucharest remains the most popular location for new investments for approximately 57% of respondents and over 25% of respondents are open to new investment opportunities in regional cities, which could stimulate the real estate market, especially since only 5% of them currently hold proprieties outside of Bucharest.
Owners of buildings located in Bucharest or in regional cities plan to keep these assets in their portfolios.
“Given the market uncertainties, contract terms will become even more important during the trading process, and the public opinion is that both guarantee and insurance will harshen, to cover more uncertainties. As regards due diligence processes, the general opinion is that they will become more rigorous or remain unchanged, which would be a sign that the Romanian investment market is balanced between sellers and buyers”, stated Anca Merdescu, Associate Director Investment Services at Colliers International.
On the land market, nearly 70% of players active in transactions plan to move forward with all or some of the ongoing transactions and 43% of participants in the Colliers International survey on this segment expect to conclude transactions over the next three months. Moreover, most investors who do not foresee the finalization of a transaction (acquisition or sale) on the short term, expect, however, to conclude a transaction until the end of 2020. Only 16% of respondents do not expect to finalize any land acquisition or sale in.
As regards the effects of the coronavirus pandemic, over 67% of investors expect the impact on the Romanian economy to last more than a year.
Nevertheless, there is a bit more optimism regarding the real estate market, with 35% of respondents relying on a recovery in less than one year.
Investors are even more optimistic when it comes to their own companies, with 27% of them expecting things to get back to normal in less than six months and 38% expecting this in less than one year.
Over 80% of respondents believe revenue from the retail sector and the hotels segment will drop, while the industrial segment is expected to see increases in rental rates (22.4%) or stable rents (58.6%). The perspectives for the office space segment are unclear, as the number of respondents seeing a decline in rents (45%) is almost equal to the number of respondents expecting rents to remain unchanged (37%).