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Real Estate Transactions in Romania Show Remarkable Growth
In the first half of the year, Romania witnessed an impressive 131% surge in real estate transactions, reaching a total volume of 418 million euros. This growth marks the highest increase in Central and Eastern Europe (CEE), positioning Romania as the third-largest market in the region, following Poland and the Czech Republic, while surpassing Hungary and Slovakia.
Key Drivers of the Local Market
The local market has been significantly driven by retail property transactions and industrial projects, accounting for 90% of the total volume. In stark contrast, office spaces contributed only 4% to the overall transaction volume.
Regional Insights
Across the CEE region, which includes Romania, Poland, the Czech Republic, Hungary, and Slovakia, the transaction volume for the first semester reached 3.26 billion euros, reflecting a 40% increase compared to the same period last year. Poland experienced a 113% rise, while the Czech market grew by 19%. Conversely, Hungary saw a decline of approximately 33% in revenue-generating property transactions, and Slovakia faced an even steeper decrease of 73%.
Transaction Activity in Romania
During the first semester of the year, Romania recorded 38 transactions, a significant rise from just 17 in the same period of 2023. Additionally, this semester marked the most dynamic first half since 2017, as the latter half of the year typically sees increased transaction activity.
Investor Interest and Market Outlook
“The year 2024 signifies a resurgence of interest from investors in real estate assets within the local market, with heightened activity particularly from established players in Romania. The outlook for the second half of the year remains optimistic, supported by relaxed financing conditions and stabilizing prices. Significant transactions are expected to close, especially within retail and office segments. Overall, the transaction volume is anticipated to return to an average of around 1 billion euros, a typical figure for the local market over the past decade,” states Cristi Moga, Head of Capital Markets at Cushman & Wakefield Echinox.
Investment Sector Breakdown
The retail sector attracted 47% of the total investment volume, while the logistics sector accounted for 43%. The hotel and office sectors represented 6% and 4%, respectively.
Notable Transactions
The most significant transaction during the analyzed period was the acquisition by CTP of a portfolio that includes six industrial and logistics parks from Globalworth, amounting to 267,900 square meters of GLA for 168 million euros. Another important acquisition in the first semester was finalized by WDP, a Belgian group, which acquired the Expo Market Doraly project near Bucharest for approximately 90 million euros.
Yield Stability Across Market Segments
Benchmark yields remained stable across all segments in the first semester, with only industrial properties recording a 10 basis points increase compared to the end of 2023. Yields currently range from 7.25% for prime office buildings and shopping centers to 7.50% for industrial parks.
Conclusion
The Romanian real estate market is poised for a robust recovery, reflecting both investor confidence and strategic growth opportunities across various sectors.
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Investment Volume in Central and Eastern Europe (Million €)
The investment landscape in Central and Eastern Europe has been evolving significantly, with various factors contributing to the changing dynamics of the market. As the region continues to attract foreign investments, it is essential to analyze the volume of transactions taking place, particularly in the real estate sector.
Distribution of Real Estate Transaction Volume in Romania by Asset Class
In Romania, the real estate market showcases a diverse range of asset classes, each playing a crucial role in the overall investment volume. Understanding the allocation of transactions across these asset classes provides valuable insights into investor preferences and market trends. Residential, commercial, and industrial properties each contribute distinctively to the investment volume, reflecting the economic conditions and growth potential of the region.
As investment activity intensifies, stakeholders in Romania’s real estate market must remain vigilant and adaptable to the evolving landscape. This will ensure they capitalize on emerging opportunities while navigating potential challenges in the market.
