Top real estate sectors that attracted the most investment in the first quarter of 2023

Deniza Cristian 05/04/2023 | 13:34

Real estate investments in the first quarter of 2023 exceed 153 million euros and are higher by 72% compared to the same period last year, according to an analysis by Fortim Trusted Advisors, a member of the BNP Paribas Real Estate Alliance.

 

The best performing sector in attracting investors was the industrial segment, the value of investments in halls and production spaces cumulating about 72.27 million euros, which represents 47% of the total investment market.

“In the first three months of 2023, we see a significant increase of 72% in the value of traded commercial properties, compared to the same period in 2022. However, the volume of the first quarter of 2023 is below the quarterly average recorded in 2022, a year marked by a record in real estate investments.  In terms of distribution of transactions by segments, most were recorded in the office area, but they were of lower values ranging from 1.5 million to 21 million euros. In contrast, on the industrial segment, a single major leaseback transaction, with a total area of approximately 100,000 square meters and an estimated value of over 60 million euros, represented about 47% of the total investments in Romania. This led to a positioning on the first place of the industrial segment”, says Nicolae Ciobanu Managing Partner – Head of Advisory at Fortim Trusted Advisors, member of the BNP Paribas Real Estate Alliance.

On the industrial segment, a total of four transactions were made, with values starting from 1.2 million euros and passing 60 million euros. The investors bought industrial spaces with a total area of over 130,000 sqm, with afferent lands that can be further developed, in Arad, Bragadiru, 1 Decembrie, Timisoara and Dragomirești.

In recent years, there has been a significant increase in investor interest in its leaseback transactions, not only in Romania, but also internationally. This investment strategy involves the sale of a company’s property to an investor, and that company then rents the property back for a period of time set out in the lease.

The advantages for companies that opt for this type of transaction are multiple. First, an immediate capital injection is obtained, without the need for a major investment in real estate assets. In addition, companies can focus their resources and efforts more on their core activities, which can help them become more competitive in the market.

On the second place in the top of the destination of commercial assets was the office segment, with seven transactions and funds attracted of 67 million euros. The values of the office buildings sold were between €1.5 million and €21 million. Six of these buildings are in Bucharest.

On the third place is the retail segment, which attracted 8 million euros by selling a Brico Depot space in Iasi.

What was invested in in 2022, in Central and Eastern Europe

The largest real estate transaction in the CEE region took place in Poland in 2022. In the top of the countries in the region, Romania surpassed Hungary for the first time and climbed to the third place

In total, real estate commercial assets with a total of 10.8 billion euros were traded on the fields of the EEC in 2022, according to a study conducted by a group of companies affiliated with BNP Paribas Real Estate.

In Romania, last year, the real estate investments were exceeded threshold of 1.3 billion euros.

The largest transaction in the region took place in Poland, where Google bought the Warsaw Hub, an office complex with a total area of 101,000 sqm, a transaction estimated at 583 million Euros.

In Romania, the largest transaction was 377 million euros, consisting of a portfolio of seven office buildings bought by Paval Holdings, the owners of the Dedeman network.

“At the end of 2022, there is an increase in the returns on real estate investments throughout the region, including Romania. We estimate that this trend will continue on the background of keeping interest rates at a high level and rising rents by indexing to the inflation index. In the next period, we estimate that investments in the retail segment, especially in retail parks, will be the most attractive, due to their resilience in difficult times”, says Stefan Oana, Head of Capital Markets at Fortim Trusted Advisors, member of the BNP Paribas Real Estate Alliance.

The full report made by companies from the Paribas group or affiliated to BNP Paribas Real Estate from CEE, can be found here: CEE Investment market report 2022 | 108 AGENCY CEE Investment market report 2022 | 108 AGENCY

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