Transactions worth over EUR400 million are currently under various stages of negotiation, targeting mostly office buildings and retail projects.
For now, despite market expectations, the yields for office and logistics/industrial space remained unchanged over the last year, at 7% and 8%, respectively, while the yields for retail space increased by 25 basis points to 7.25%.
“Romania offers highly attractive opportunities on the segment of commercial real estate property in terms of prices. The level of yields stays way above the previous peak level in 2007, but also way above the level registered in the rest of the region. Considering that rental prices largely remained unchanged for several years (even ten years for office space), we see that prices per square meter for office space, industrial halls or retail space have increased only marginally over the last five years (between 0 to 10%), strikingly in contrast to sustained increases on the residential segment. Consequently, we expect this opportunity to reflect in a large trading volume, in the coming period, although, on the short term, namely, in 2021, investments most probably will not exceed the level in 2020”, said Andrei Vacaru, Head of Capital Markets JLL Romania.
Romana’s real estate investment market totaled EUR309 million in the first half of 2021, almost 22% lower than in the same period of 2020. The pandemic impact was lower than expected, therefore, investment volumes stayed at “healthy” levels both in 2020, and in the first half of 2021, according to consultants.
The transactions started during the COVID-19 pandemic were concluded in the first half of 2021, which proves that investors still have appetite for commercial property in Romania, encouraged by the swift economic revival. Compared with 2020, the number of transactions has increased, while the average value of a transaction fell to EUR21 million.
Capital Bucharest remained the preferred destination of investors, accounting for 69% of the total volume transacted in the first half of 2021, being followed by the cities of Timisoara, Iasi and Oradea.
The largest transaction in the first half of 2021 was the sale of the Campus 6.2 & 6.3 buildings located in the Center-West area of Bucharest, within which JLL represented the seller, namely Skanska.
Another important transaction on the Romanian office space market targeted the sale of the first phase of The Light project, also located in the Center-West area of Bucharest, by River Development to Uniqa RE and the acquisition of the Bucharest Financial Plaza, located in downtown Bucharest, by Immofinanz from Banca Comerciala Romana.
The volume of office space transactions totaled EUR197 million in the first half of 2021.
On the industrial and logistics space market, the sale to CTP of Catalyst portfolio, consisting of four properties – two in Timisoara, one in Arad and one in Caransebes, represented the largest transaction on this segment.
Other major transactions with industrials and logistics projects targeted the acquisition of the Industrial Park West Arad and Industrial Park West Oradea by Globalworth from Globalvision, the sale of the H.Essers warehouse in Oradea to Connectronics and the acquisition of Solo Logistic Park in Iasi by Swedish investment fund Oresa, which marked the entrance of a new investor on the local real estate market.
On the retail market, the only significant transaction concluded in the first half of 2021 targeted the sale of a portfolio of big box-type projects in several tertiary towns in Romania, acquired by Praktiker Real Estate and Lidl from Portico Investment.