The most dominant segment in 2014 was the retail sector, amounting to over EUR 510 million, representing approximately 40 percent of the total investment value. Office sector accounted 27 percent, while transactions with industrial properties accounted 13 percent from last year’s investment volume.
The most important deals have been registered in Q4 and represent 69 percent from 2014’s investment volume. NEPI purchased Promenada Mall for EUR 148 million, P3 acquired CA Immo’s industrial park Europolis Logistic Park, transaction value estimated to be of EUR 120 and Globalworth purchased three office buildings, including Skanska’s office building Green Court – A, an EUR 133 million total investment value. NEPI was the most active retail investor in 2014. Apart from acquiring Promenada Mall and two other retail properties located in Buzau and Alba Iulia, NEPI also purchased land properties in Piatra Neamt and Timisoara having the purpose of enlarging its retail portfolio with future developments. With a value of approximately EUR 343 million invested, Globalworth was the most active in acquiring office properties. The investor also purchased two land plots located in the most performing office areas in Bucharest, Barbu Vacarescu – Floreasca and Pipera South.
The properties sold by banks represent a small share in the total investment volume recorded in 2014. Banks still hold on balance sheets large portfolios of non-performing loans collateralized by various properties with low degree of liquidity. After seven years of dry activity in terms of recovering bad debts, banks continue to show little flexibility in negotiating the sale of collaterals.
In light of the above, last year some banks ended up selling to opportunistic specialized investment funds large bad debt portfolios at significant discounts. Alternatively, some banks handed-over property guaranties towards special purpose vehicles controlled by their own group, having the strategy to improve the performance of distressed assets and to sell in better market conditions.
The total investment value recorded last year proves that Romania is again becoming a desired destination for real estate investments, also reads the report.
Economic growth, political stability and the yield difference between the local market and Western European markets draws the attention of new investors. Institutional funds that in the past were not considering Romania to be a viable investment destination are now active and are looking to acquire income generating products. Thus, local investment market is forecasted to perform going forward, driven also by new investors entering the market. Further yield compression is expected this year.
Retail and office products have continued to be on investors’ radar in the recent years, while industrial and logistics segment witnessed no investment activity. 2014 proves that this sector is becoming again attractive, according to the Property Times Romania Investment 2014 report.
“With several prime industrial and logistics products available for sale, we estimate that this particular segment will represent an important share in 2015’ total investment value. Regarding banks’ financing policy, despite the fact that financing costs decreased significantly, financial institutions are still reluctant to finance commercial real estate, while funding of residential development is virtually inexistent. Nevertheless more and more developers are preparing residential developments on equity,” reads the report. (Source: business-review.eu)
