The year 2018 ended with a significant premiere on the local real estate market: Romanian investors ranked second in the volumes generated by nationality. Almost EUR 200 million were paid to buy commercial properties (about a quarter of the total volume), a significant leap to more than five times their investment in 2017, according to Colliers International real estate consultancy.
“The increased presence of the Romanian capital on the real estate market marks a possible turning point, because one of the observations we have received so far from some foreign investors without activity here was: if Romanians do not trust the local assets, why should we? At the same time, it is also a sign that the Romanian economy as a whole has grown so much in the last decade to lead to capital accumulation, a positive aspect for longer term prospects,” said Robert Miklo, Investment Services director, Colliers International.
On average, in the Central and Eastern European economies, local buyers accounted for 23 percent of the business, so Romania approached the other countries in the region for the first time. Another observation would be that South African capital still dominates in Romania, with a share of almost one-third of the investment volume, double the share it has in the region as a whole.
A second memorable event of the past year is that two of the signed deals are among the top ten largest real estate transactions.
“The sale of The Bridge and Oregon Park offices in Bucharest is one of the top 10 largest real estate deals ever made in Romania. If Romania’s economy does not go too far from potential growth in 2019 (about 4 percent), and the global economy will remain in a relatively favorable dynamics, growth in the real estate market can also be seen. Last year yields in the Central and Eastern European capitals continued to decline, increasing the gap with prices in Romania. Thus, despite the more difficult economic context and higher uncertainties than a year ago, there are premises for 2019 to generate new positive surprises, and these two records recorded in 2018 could even be overcome,” added Miklo.
The largest transaction made by the Romanian capital also marked the entry into the real estate market of the Dedeman group, which bought the Bridge project in Bucharest’s center-west area for a total value close to 200 million euros (in the metering of investments in 2018, a lower figure for this transaction was taken into account as the third phase will be completed in 2019).
Other transactions made by local stock companies were smaller but relevant for the market: the acquisition of the Bucharest Corporate Center office building by One United Properties or Oradea Shopping City by Sapient Center Oradea.