Money has started moving, as banking interest rates fell to record lows, but only investors with experience on the Romanian market, such as Greek Ioannis Papalekas or South-African Martin Slabbert, as well as retailers such as Auchan, Kaufland or Dedeman have the courage to place tens of million euros in real estate assets of Romania.
After in the 2009-2013 period annual real estate deals revolved around EUR400 million, in the first half of this year one can speak of a sector revival.
This year’s largest real estate deal so far has been the purchase by French group Auchan of 12 shopping centers. The deal revolves around EUR280 million and the involved sides have not disclosed any details so far. The 12 projects host Auchan stores fitted out in the spaces of former real hypermarkets acquired by the French group.
Through this acquisition, Mulliez family, which controls Auchan, is cementing its presence in Romania, but the deal was rather prompted by the desire to no longer pay rents than by a rising appeal of Romanian real estate in the eyes of foreign groups.
An idea about foreign investors’ perception can be made by analyzing this year’s second major deal, the sale by RREEF, part of Deutsche Bank, of a 78% stake in the companies that own BOC and BOB office buildings of Pipera, a deal that marked the exit of the power German group from the domestic market and the strengthening of the portfolio of Ioannis Papalekas’ Globalworth fund.
The German group was determined to leave even as it had to accept a significant discount at its exit, with the deal being valued at some EUR120 million, 20-30% below the acquisition price.
Beside these projects, Globalworth bought a logistic project in Timisoara and a land plot to develop a new business park in Pipera this year, with the three deals worth around EUR150 million weighing about 20% in the total value of deals sealed in the first 8 months.
South-African group NEPI, which during the crisis was the most dynamic buyer of Romanian real estate, this year focused on development, raising three shopping centers and an office building, but also sealed three acquisitions worth nearly EUR50 million.
“There still are two major players on the investment market, Globalworth and NEPI, but we expect a series of other regional players to tap the market,” states Laura Bencze, head of research at real estate consultancy CBRE.
Two senior real estate consultants of DTZ and Knight Frank also recently stated the Romanian real estate market is capturing renewed interest from major real estate investors.
In 2014, Romania has also seen the first acquisitions by two opportunistic investors, Revetas and Secure Property, which bought Bucharest’s Vitantis shopping center, a logistics center of Clinceni and Danone’s headquarters of Colentina. The deals offer a 10% or even higher annual yield.
Among Romanian investors, two made significant acquisitions this year: Gheorghe Iaciu, the developer of Expo Market Doraly and the main Impact stakeholder, bought shopping center Moldova Mall of Iasi, while Ionut Dumitrescu, former stakeholder in real estate consultancy Eurisko, the current CBRE Romania, bought two land plots in Bucharest.
At the same time, Dorinel Umbrarescu, owner of Spedition UMB construction firm, bought a building from Romtelecom to fit out the headquarters of Banca Romana de Credite si Investitii he launched this year.
This year also saw a series of manufacturers, such as Kromberg & Schubert, French furniture producer PGS Sofia or food companies Best Foods and Dr. Oetker invest million of euros in production halls or land plot for the construction of new plants.
(English version by Catalina Apostoiu)