With an international approach centred on three brands – myhive for offices, VIVO! for shopping centres and STOP SHOP for retail parks, IMMOFINANZ offers unique experiences in all its properties: from the modern, collaborative office environment to a complete leisure experience or a practical approach to shopping.

By Anda Sebesi

With more reasons to be optimistic than not, Romania is again set to outpace most EU countries in terms of economic growth in 2020. At the same time, all real estate segments are still displaying robust growth, albeit a bit mellower than the record-setting pace seen in recent years.

As pundits say, the local economy is already adapting to the new reality, as expansion cooled down to around 4 percent in 2019 from 4.4 percent in 2018 and 7.1 percent in 2017. Gaping fiscal and current account deficits, yielding an increased vulnerability to shifts in external sentiment, suggest GDP risks are skewed to the downside, so there will be no defying gravity in 2020 (a growth around 3 percent looks realistic). Yet Romania still exhibits one of the best potential growth rates in Europe, and major structural reforms (workforce mobility, education) could unlock significant growth down the road with fairly little effort.

“Romania has had a steady growth of roughly 3 percent since 2013. The economic growth rates put our country on the map for foreign investors, as it is becoming a driver of the region. For example, the transaction volume on the real estate investment market continues to enlarge and is well distributed across the three sectors: office, retail, and logistics properties,” says Fulga Dinu, country manager for operations at IMMOFINANZ Romania.

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According to Top 10 predictions in 2020 by Colliers International, last year was a good one for the Romanian investment market, with yields moving a bit lower and overall demand maintaining robust levels. As things stand now, 2020 may actually be the best year in the post-crisis cycle, says the same report. There are already several office deals that could soon close and be worth over EUR 600 million, with several buildings on the market asking yields below 7 percent. And this is only related to the office segment, while industrial and retail submarkets are also doing fairly well, though there are some supply-side limitations here. “Going forward, we’ll be looking for a deepening of various submarkets, from pure class A office buildings to those with a value-added angle or reconversions,” says the same report.

As the local market grows, so does the impact on both the office and retail space transactions.

“Romania is a dynamic market with steady economic growth, which is translated into positive prospects for our retail and office operations. For example, the increase in office space transactions comes on the backdrop of strong demand in the consumer goods sector. In retail, the increased purchasing power has seen shopping centers around the country getting more visitors, and as the minimum wage grows this trend is expected to continue in 2020, offering substantial growth possibilities,” says the country manager, adding that the expectation is for Romania to continue on this steady growth path.

As the real estate industry mirrors economic development, there are still many opportunities for investment. “As key areas in major cities develop, they tend to turn into hubs and trigger a need for a variety of properties to serve the need for office, retail or even leisure space. As a leading owner of office and retail space, we have attracted several new tenants to our properties, but have also noticed that many existing tenants with growing businesses demand additional space in our properties,” says Dinu about the development of the local real estate market. IMMOFINANZ’s main directions are the development of its office and retail portfolio as well as the strengthening of its position as a leading commercial real estate player on the local market.

LOCAL FOOTPRINT

With nine office buildings in prime Bucharest locations and five retail properties across the country, the IMMOFINANZ properties in Romania have, as of September 2019, a book value of approx. EUR 645.0 million and represent 14% of the international company’s total standing portfolio.

In the office segment, the company has constantly made significant investments to provide best-in-class properties and services to its clients. Meanwhile, on the retail side, pans are focused on improving experiences in VIVO! shopping centers.

“We center on three brands – myhive for offices, VIVO! for shopping centers, and STOP SHOP for retail parks. Each brand offers a unique experience – from the modern, collaborative office environment to a complete leisure experience or a practical approach to shopping,” says Dinu.

Speaking about the company’s business strategy, Dinu says that IMMOFINANZ is a long-term oriented value-added investor on the Romanian market, with a clear focus on a high customer orientation which results in a high occupancy rate and a stable cash flow. “Against this background, we will continue on our chosen path by constantly adapting to our tenants’ needs, which nowadays have become increasingly sophisticated and challenging. The office and retail sectors are both very competitive. As an international company and long-term investor in Romania, we are in a very good position to grow with the market,” she adds. As for 2019, the IMMOFINANZ representative says that it was a very successful year in terms of further strengthening its market position and offer to its clients. “Within our office buildings, we have gained a number of new tenants like Sodexo, Rohde & Schwartz Topex, Whole Food Process (trickSHOT), Stradale, and Motul.”