“Following a long period on a descendent trend in the real estate market (2009-2013) and a relative stagnation in 2014, the first half of 2015 announces a revival of the real estate market. The resuming of some projects started before the financial crises mainly in the commercial spaces and office market, as well as the beginning of new projects represent solid arguments in this respect. The expansion trend of the real estate market is being noticed both in the capital and in the province”, says Andrei Botis, managing partner of NAI Romania.
“There are indeed some investors looking at the existent opportunities in Romania too. Those are divided in several categories: active in Romania in the last 3-7 years (NEPI, Globalworth, Immofinanz etc), present in Romania but inactive after 2008, investors evaluating the opportunities in Romania without having purchased yet. We expect that from the last two categories to see more and more investors doing transactions with assets in the next 12 months”, also says Silviana Badea, head of capital markets within JLL, which adds that the potential is that the investment volume in the second semester to reach EUR 800 million.
Real estate specialist mentioned that the market’s ascending trend will continue with a plus of dynamics on the regional markets. “The last semester of 2015 will continue, most likely, the trend started in the end of last year through the completion of the started projects and the beginning of new ones. It is expected to see a more accentuated development on the regional markets, on the background of the Bucharest market giving signs of maturity”, has declared Andrei Botis.
The investors are back: the investment opportunities are depleting
Silviana Badea cautions though that the investment opportunities are not so many in fact. “The office buildings for sale will be transacted in the next 6-12 months, leaving the investment market with a limited stock of prime products. This is the case of the industrial investments stock of products too, which will be exhausted by the end of this year, being pooled in the hands of 3-4 owners. Regarding the retail, among the prime shopping centres we do not expect to see on sale income producing properties”, says Silviana Badea.
The main trends noticed by JLL consultants on the market this year include the increasing interest for the industrial segment, as well as for Romania in general as an investment destination, the institutional investors doing their country assessment. Moreover, the specialists saw a compression of the yields, as well as a stronger interest from the banks to refinance prime investment products, which makes the consultants optimistic regarding the financing conditions.
“This year was marked by an increase of the real estate market both on the new developments segment, as well as on the segment of the transactions with industrial, commercial and office real estate properties. The significant real estate projects on Bucharest market include the office buildings within AFI complex, those developed by Skanska and Globalworth in North or Center Square on Vasile Alecsandri St. On Timisoara market, the investment of Globalworth in the industrial facilities near the airport or those of NEPI in the development of a mall on the plot of the former Dermatina factory are relevant in order to understand the trends of the real estate market. The office market is also registering, as previously seen, development trends. On the market in Iasi we notice a higher interest in commercial and office spaces market, significant in this respect being the continuation of Palas project or the massive investments in Moldova Center project, expected to end in the second part of the year”, also commented Andrei Botis.
Therefore, the number of projects in development and of the transactions is increasing. “It is obvious the interest showed by the foreign investors, among which ParkPoint Properties, which has purchased the industrial park Europolis, NEPI, which develops new commercial project, including Mega Mall and Timisoara Shopping City, Sonae Sierra and Caelum Development, which are developing Park Lake Mall or Globalworth, involved in the Bucharest office market, as well as in the industrial market in Timisoara, through the acquisition and development of Timisoara Airport Park. We could also remind of Romanian important players on the commercial and office spaces market, among which Iulius Group stands out with massive investments in Iasi, Timisoara or Cluj, as well as Proiect Bucuresti, developr of Center Square”, has explained Andrei Botis.
“The general conclusion is that we could notice for the first semester of 2015 an increase of the interest of Romanian and foreign investors for the Romanian real estate market”, says Botis.
Evolution of rents
“Following the above mentioned development of the offer in the real estate market, we expect the real estate properties stock growth on all segments and mostly on the spaces offering extended facilities, the industrial spaces and the A class offices respectively. Many of these have been developed starting from the clients’ requests and being based on pre-renting contracts. The growing offer, in the conditions of a request mostly based on companies’ relocation needs, leads us to forecast a relative stability of the level of rents during 2015”, has declared the representative of NAI Romania.
The office market
The office market in Romania reached a stability point, says the specialists within JLL. “The rents, otherwise variable depending on sub-markets, are for the prime spaces at the same value of approx. 3 years –18,5 €/m²/month and there aren’t signs that these could increase on short to medium term. The office spaces stock reached 2.3 million sq. m, after the new projects deliveries in the last two years were around 120,000 sq. m. Moreover, in 2015, the same value is forecasted. In 2016, though, approx. 300,000 sq. metres were announced, mostly in Northern Bucharest, a value which represented 13 pct. of the current stock. The request, strongly dominated by IT and Telecom companies, reached record values in the last two years, of approx. 295,000 sq. m, and in 2015 we expect that a similar area to be rented”, have declared the officials of JLL.
The industrial market
The rents were constant in the last 12 months, varying for prime logistic facilities between EUR 3.4 and EUR 4/ sq. m/ month (Depending on the type of space, location and contractual terms), but a slight increase could be noticed, taking into account that the average vacancy rate has significantly dropped in the last year and the new projects will be delivered only in the end of the year, beginning of next year.
The interest has increased in industrial and logistics projects, due to several factors, among the most important being the strong request growth (record numbers both in 2013 and 2014) and the limited available space to cover this request. The forecasted volume of the rental transactions for 2015 will be at least at the same level as in 2014, exceeding 300,000 sq. m. Moreover, the beginning of the year, when the request was almost entirely new, makes us optimistic regarding the percent of this type of transactions in the annual request, according to JLL. (source: wall-street.ro)
