"2018 will be a turning point for the investment market, especially from the perspective of the office segment. If so far, office buildings with an average surface area of 20,000 sqm were traded, the pipeline for the next period includes projects with an average surface area of over 50,000 sqm. Therefore, the volume of investment in the office market could increase from 160 million euros in 2017 to 500 million euros in 2018 ".
Also, the total estimated real estate investment volume for this year will exceed the EUR 1 billion threshold and returns for retail, office and industrial projects could fall by 25-50 basis points.
Economic growth has encouraged investors' interest in Romania, which has led to a qualitative improvement in the real estate market. However, the prolongation of the negotiation phase postponed some transactions for 2018, with liquidity in 2017 almost unchanged at 960 million euros. The largest transactions were the partnership between Iulius Group and Atterbury Europe (estimated at 200 million euros) and the sale of Radisson Blu to Cerberus Capital Management and Revetas Capital (169 million euros).
According to the new report, the dynamism of 2017 will continue in 2018 in the real estate market, being doubled by new demands and trends in the Capital and especially in the major regional cities in the country.
In Bucharest, the office market was moderately growing, with new projects totaling 123,000 sq m being delivered, so the stock of modern facilities has reached 2,3 million sq m, a value lower than the initial estimates. The total area rented in Class A spaces amounted to 320,000 sqm and the new demand exceeded the 150,000 sq m threshold, the latter being a maximum in recent years. The IT & C segment remained the main demand engine, generating 44% of the rental activity (140,000 sq m). The most active areas were Floreasca / Barbu-Văcărescu and CBD (19% of total transactions), followed by the Casa Presei/Expozitiei and West-Center.
The office space to be delivered in Bucharest in 2018 is 185,000 square meters of A-class offices, the total demand being estimated at around 300,000 sqm and the net area at 135,000 sqm.
An increase in the West-Center and Expozitiei areas is expected, in the context of the infrastructure probems in north-eastern sub-market.
The total office stock of the four major regional cities is 3.5 times lower than that of Bucharest, but it will increase in 2018 by 150,000 sq m, which will cause a decrease in this gap. (source: zf.ro)
