Romania registered a record €800 mln of real estate investment in both 2014 and 2015, and investors are expected to target more equity at the market this year, Colliers International has forecast on the first day of MIPIM in Cannes.
Romania registered a record €800 mln of real estate investment in both 2014 and 2015, and investors are expected to target more equity at the market this year, Colliers International has forecast on the first day of MIPIM in Cannes.
'Compared with 2014, when the local market was characterised by some atypical transactions, such as the takeover of Real network by Auchan, the investment market in 2015 was rather balanced and diversified, with strong engagement by international investors,' said Laurentiu Lazar, director of investment and valuation Services at Colliers International Romania.
'While the office sector drove almost half of the investment volume in 2015, the industrial segment reported the biggest increase this year and retail projects remained constant. 2016 will reconfirm the strong investment opportunities in Romania and investors’ interest in our real estate market, especially given the significant premium stock of office buildings that is to be delivered,' Lazar said.
Retail
Retail property accounted for only 20% of the total Romanian investment volume in 2015. However, Colliers International has witnessed enhanced attention from investment funds for the sector.
'Until recently, the local investment market for shopping centres has been mainly dominated by NEPI, but an increasing number of investors want to enter the market or to consolidate their local operations,' noted Simina Niculita, associate director investment services for Colliers International Romania.
The main driver of this shift is the performance of active retailers who have registered average annual profits up to 15%, which indicates, Niculita said, that Romania has powerful medium and long term potential, supported by more confident consumption behavior. 'The next two years will see an increase of retail asset transactions, from shopping centres to retail parks, DIY and food anchors,' Niculita predicted.
Yield advantage
Yield compression in some of the large markets in CEE is also an advantage for Romania. Yields in Romania tend to be on the high side: 7.5% for offices, similar level for retail and almost 9% for industrial and logistics.