Commercial property investments in Romania exceeded 850 million Euro last year, says DTZ
In 2016, the total volume invested in commercial property in Romania exceeded 850 million Euro, a DTZ Echinox report shows. Bucharest attracted 660 million Euro, which represents 77 per cent of the total investment value
In terms of sources of capital, almost 70 per cent of the investment volume was concluded by investors located in Asia, Africa and the USA, with European investors covering the remaining 30 per cent. The largest transactions in terms of value were concluded as indirect investments in groups active on the local market - Growthpoint and GIC in Globalworth and P3 respectively.
"For the real estate market, 2016 was encouraging in terms of increasing liquidity," said Tim Wilkinson, partner, Capital Markets, DTZ Echinox. "The spectrum of investors who bought sizeable assets in Romania has widened, a trend we expect to continue in 2017. The yields are constant, which contributes to creating a stable and predictable environment for potential buyers."
South-African group Growthpoint invested 194 million Euro to become the largest shareholder of Globalworth Real Estate, controlling almost 27 per cent of the company′s issued share capital. GIC (Government of Singapore Investment Corporation) acquired P3 from TPG and Ivanhoe Cambridge, ultimately becoming the owner of the largest logistics park in Romania, P3 Bucharest, with a total GLA of more than 300,000 sqm.
Another new investor on the local market was PPF Real Estate. The Czech Group acquired Metropolis Center in Bucharest for approximately 48 million Euro. NEPI, the largest real estate company in Romania, concluded the largest transaction in the retail sector, by acquiring Shopping City Sibiu for 100 million Euro.
The most active segment was the office sector, according to DTZ. The estimated value of transactions of office properties was more than 375 million Euro, representing 44 per cent of the total investment value. The retail sector saw transactions worth 268 million Euro, representing 31 per cent of the total volume, with the remaining 25 per cent covered by logistics.
Compared to other investment destinations in the CEE region, Romania still has the most attractive yields. On average, prime yields in Bucharest are higher by 140 basis points (for office) and 180 basis points (for retail) than in the other main markets.