Romania’s commercial real estate sector saw a flurry of investment transactions during H1 2024, growing in volume by over 130% year-on-year, which was the biggest growth rate across Central and Eastern Europe (CEE) markets. The local investment market recorded deals worth around EUR 417 million in H1, of which Romanian investors had a share of 26%, according to an iO Partners report.
By Ovidiu Posirca
“As things stand now, we have firmly crossed the EUR 600 million level as of September 2024, which is already nearly 3x more than what we saw in the first 3 quarters of 2023 and on par with good years that we have seen in the last decade. Furthermore, we have a good pipeline of deals heading into the fourth quarter of the year—both from our own mandates and other deals that we know of,” says Anca Merdescu, Director Investment & Debt Advisory CEE | Investment Services at Colliers.
She suggests that realistically, Romania can reach around EUR 800 to EUR 900 million in commercial property deals this year.
“Given that Romania has not seen the post-pandemic drop in yields (and subsequent correction), we believe that local assets are decently positioned as the gap between buyers and sellers has narrowed significantly over the last year,” adds Merdescu.
Strong momentum for deals going into 2025
Elsewhere, Laura Dumea-Bencze, Director Investment Properties at CBRE Romania, adds that we are starting 2025 with a solid base of on-going deals.
“Looking ahead, logistic & production warehouses will continue to lead, and represent almost half of what will be traded in Romania. Retail sector will follow – we already had good product traded in 2024, with others retail parks and larger shopping centers, primarily in regional cities, to catch investors interest,” adds Bencze.
The local assets are decently positioned as the gap between buyers and sellers has narrowed significantly over the last year. As such, we could see some actual yield compression within the next year.
Merdescu explains: “We consider that the fairly high prime yields themselves are an attractive factor, as investors can expect higher returns/pay lower prices and gain entry into one of the most dynamic economies in the world; despite the less than stellar performance in 2024 and the fact that we have some uncertainties arising from the fiscal situation, Romania’s historical performance during the last couple of decades is impressive.”
In general, the European markets have recalibrated in the last 24 months and a shift in focus occurred, as industrial, hotel and living sectors became top targets.
On the whole European market, investments amounted to EUR 74.7 billion in H1 2024, rising by 7% compared to H1 2023, according to data by BNP Paribas Real Estate.
At the same time, the investment volume across CEE-based markets rose by 41% to EUR 3.3 billion compared to H1 2023.
“While some sectors continue to face challenges, the overall outlook is cautiously optimistic, driven by improved liquidity and a more supportive monetary policy environment. We anticipate that the second half of the year will offer further opportunities for growth and value creation in the CEE region,” concludes , the CEO of iO Partners.