Thus, from an average of approximately 5% of the annual volume invested in commercial real estate assets, since 2018, the local capital has come to cumulate annually 25% of the investment market value, per an analysis by real estate consulting firm JLL.
”Lately, we have seen a large number of Romanian businesspeople investing in real estate, mostly in acquisitions of existing projects, either after selling the businesses they took to maturity, or in addition to the development of their businesses. If in the first stages of the modern real estate market, Romanian entrepreneurs steered clear of investing in commercial properties, this has changed a lot over the past three years,” said Andrei Vacaru, Head of Capital Markets JLL Romania.
To reduce the risk of placing the entire fixed capital in a single business or a single field, entrepreneurs diversify their investments. Besides bank deposits, state bonds or shares in various companies, the real estate sector represents a stable alternative on the long term and more profitable.
An important advantage of investments in real estate projects is that they can quickly become a source of cash, both through direct sale and through refinancing.
In Romania, Dedeman Group, which owns the largest do-it-yourself chain in Romania, probably is the most eloquent example of local investors which diversified their portfolio by acquiring real estate properties. Dedeman had a turnover of nearly EUR1.6 billion in 2019 and has invested over EUR300 million in real estate so far.