The total value of real estate investments approached 900 million euros in Romania in 2021, with more than a third of the traded amount being recorded in the last three months of the year, according to Colliers Romania consultants. Although among the most affected by the pandemic, the retail sector was dominant in terms of transactions, with a share of 48% in the total volume of investments in the last quarter, followed by industrial and logistics spaces (29%) and offices (17%).
The fourth quarter in 2021 turned out to be one of the best quarters in recent history, recording a total value of real estate investment of 342 million euros, up by almost 400% from below 70 million euros in the same period last year.
“The last three months in 2021 have been fairly balanced, with all three major real estate segments - retail, industrial & logistics and office having a significant contribution. Retail was the most active, with two transactions bringing in almost 48% of total volumes. Cora's sale of its six properties in Romania, consisting of hypermarkets with shopping gallery and parking with a total area of 135,000 square meters, to the Austrian investor Supernova marked the largest retail transaction in Central and Eastern Europe in 2021", explains Simina Niculita, Partner & Head of Retail Agency at Colliers.
Investors’ interest in retail products has been growing steadily over the last half year, focusing on various product categories such as retail parks or shopping arcades, shopping centers in secondary tertiary cities in need of repositioning or boxes leased to supermarkets or DIY.
There are several deals under negotiation on these product categories, which started in 2021 and are expected to close this year, according to Colliers consultants. Also in 2021, CTP bought the industrial portfolio of Helios Phoenix (150,000 square meters) for about 75 million euros, being one of the largest industrial and logistics transactions in recent times, and the owners of the Romanian DIY chain Dedeman bought Atenor's latest office project, Dacia One, for about 50 million euros, amid exceptional rental conditions. The sale of the Class A office project was brokered by real estate consultancy Colliers.
“The volume, while good, fails to show the true extent of demand as the investors’ interest responds to a limited supply of products. This applies to all major real estate sectors: office, retail and industrial. Because of the blocked authorisation process, there is a lot of uncertainty about the delivery of new products, context in which we see an increased interest in existing, centrally located assets, which as a result of an investment can be converted into residential, hotel or brought to a current standard of offices. We also see a demand for specialized product types, where the final investors are the beneficiaries of the rented space", concludes Anca Merdescu, Associate Director for Investments Services at Colliers.
For assets in the industrial & logistics (I&L) sector, yields on prime properties fell over the past year by about 0.5 percentage points to 7.5%. On the office side, yields on prime assets fell from 7% in the third quarter of 2021 to 6.5% at the end of the year. For example, the acquisition of Dacia One by Dedeman from Atenor marked a new downward movement for prime yields, a new post-2007 low, although the long duration of the lease was an important contributing factor.
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