Real estate investments in Romania rose 69% year-on-year to 202 million euros ($219 million) in the first three months of 2024, with retail investments accounting for almost two-thirds of the total volume. -based professional services and investment management company Colliers said.
The Romanian real estate sector had the best investment performance compared to five other major Central and Eastern European economies – Bulgaria, the Czech Republic, Hungary, Poland and Slovakia – in a context of subdued regional market activity where transaction volumes reached one of the lowest levels in recent years . a decade, Colliers said in its Highlights 2022 CEE Investment Scene Q1 2024 report published.
“There remains a difference between the price expectations of buyers and sellers. Several factors influence returns and liquidity, including interest rates, maturity, loan terms and ESG compliance, among others. However, the main challenge remains in financing costs (…). Compared to Western European markets such as Germany, the CEE region has not experienced significant price corrections over the past twelve to eighteen months,” said Lauren?iu Lazar, Managing Partner and Head of Investment at Colliers Romania.
The total investment volume in the six CEE countries fell by 15% year-on-year to 1.2 billion euros in the first quarter, with the Czech Republic accounting for 46% of the total investment volume and overtaking Poland as the regional leader after an annual increase of 36 %. %. Performance varied widely across the region, with investment activity in Slovakia, Bulgaria and Poland down 94%, 78% and 49% respectively this year.
The retail sector accounted for 66% of the total commercial real estate investment volume in Romania between January and March, mirroring regional performance in Central and Eastern Europe, where the sector took a 43% share. The hotel sector was number two in both Romania and the wider region, with around 21% and 20% respectively. Industrial and logistics (I&L) investments ranked third in Central and Eastern Europe with a share of 15%, while office investment volumes continued to deteriorate and represented only 13% of the total.
Bucharest and Sofia had some of the highest investment returns in the region for the office, industrial and retail sectors. The Romanian capital saw top returns of 7.5% for the industrial and office sectors, while shopping centers generated returns of 7.25%. In Sofia, the office and retail sectors achieved returns of 7.75%, while industrial assets generated 7.5%.
The real estate outlook for Central and Eastern Europe is good, but external factors and high interest rates are challenging liquidity, forcing sellers to reassess their strategies and focus on ESG upgrades. At the same time, international capital is essential for increasing market volumes, Lazar said.
