Local real estate investment plummets 87 percent in Q2, DTZ

Around EUR 23.5 million was transacted on the residential and office sectors of the Romanian property market during Q2, an 87 percent decrease from the first quarter of 2011, according to DTZ Research data. For the whole first semester, investment volumes totaled EUR 213.94 million, up 14 percent year-on-year.

Investment volumes in Romania are expected to surpass EUR 500 million by the end of the year, according to real estate adviser DTZ. “We foresee a steady improvement in the market throughout the second half of 2011 with activity mainly from investors who already have assets in Romania. We do not expect to see significant new capital entering the local market until 2012,” said Bogdan Sergentu, head of valuations and consulting with DTZ Research.

Investment in commercial real estate across Europe in the second quarter of 2011 reached EUR 25.4 billion, up 14 percent from EUR 22.4 billion in Q1, according to DTZ Research in its latest Investment Market Update report. Investment volumes have averaged EUR 27.1 billion over the past four quarters compared with EUR 20.7 billion in the same period a year ago. This is the seventh consecutive quarter of growth in this indicator and underscores a steady growth in activity.

The office sector accounted for the largest proportion of Q2 activity with EUR 9.8 billion invested, representing 39 percent of total volumes. Activity also remained buoyant in the retail sector with volumes totaling EUR 9 billion, driven in particular by shopping centers. The industrial sector saw a significant decrease in investments over the quarter, falling 45 percent to EUR 1.7 billion and equating to a market share of just 7 percent.

The report also reveals that the share of activity from overseas investors (29 percent) fell to its lowest level since 2002, reaching EUR 7.5 billion in Q2 2011. Both inter and intra-regional investors were less active during this quarter with those outside Europe the least active. By contrast, domestic investment rose 28 percent in Q2 to EUR 17.9 billion. Activity by global investors nearly doubled this quarter to EUR 1.4 billion from EUR 0.8 billion in Q1.