Offices and housing for the middle class dominate the market

In the context of a heated discussion taking place lately about the local real estate market, data on the first half of 2019 show that only four transactions of over EUR 10 million were closed during this period, and over 70 percent of the total volume of EUR 340 million was generated by just two transactions: The Office in Cluj-Napoca and Prime Kapital’s portfolio of shopping centers, according to

The first half of 2019 showed that there is liquidity in secondary cities for high-quality, institutional products, a fact supported both by the largest transaction in this time period, namely the sale of The Office in Cluj-Napoca, as well as by the fact that 70 percent of the volume total investments were directed to cities other than Bucharest.

“It is true that there is an increased number of transactions in various stages of trading on the investment market, which is likely to bring the market to its highest volume after 2014, to EUR 1.2 billion. However, buyers remain very careful and due diligence processes are very detailed”, said Andrei Vacaru, Head of Capital Markets at JLL Romania.

More than half of the investments made in the first semester were related to office buildings, a trend that we expect to continue in the next period, with offices remaining the most liquid real estate class at the moment.

In a regional context, Romania and the Czech Republic are the only countries that have recorded higher investments, while Poland, Hungary and Slovakia recorded investment drops.

In the first six months, the investment market in Central and Eastern Europe exceeded EUR 5.47 billion and was dominated by Poland and the Czech Republic, which total 80 percent of the investment volumes.

In the last 12 months, prices for industrial and office properties in Romania have increased (the yields in the industrial segment have fallen by 50 basis points and those on the office market have decreased by 25 basis points), while prices for retail have remained at the same level.

“The above evolution is in line with regional and global trends, where investors’ appetite is increasing for industrial and logistics projects, especially due to the expansion of e-commerce and implicitly of the spaces that serve online retailers, while the shopping centers’ traditional products are losing their attractiveness, especially in the case of by-products. It should also be mentioned that, in the context of the apparent market effervescence, there is a risk that the gap between the price expectations of buyers and sellers will increase in the next period”, said Vacaru.

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