Colliers: Romanian invested market – over 0.5BN euro transactions in first 9 mo, offices remain in focus

The total value of investment transactions surpassed 540 million euro in Romania in the first nine months of 2021, with around half being closed only in the third quarter of the year, according to Colliers Romania consultants. The overall investment market decreased compared to the 820 million euro real estate investments closed in the same period of 2020, and a contraction in investment returns is felt for prime industrial and office assets.

Underlying demand in the market remains robust, with the lack of product depressing overall volume. Colliers consultants notice that several big-ticket items remain on the agenda for the following quarters, mostly, but not exclusively, in the office sector.

Atenor’s sale of Hermes Business Campus (75,000 square meters) to Hungarian fund Adventum for 150 million euro marked the biggest deal of the quarter and is one of the bigger deals we have seen in recent years. It was also notable for being the biggest single asset deal since the sale of the Radisson Blu hotel in 2017.

Also, CTP purchased a 110,000 square meters warehousing portfolio located in several towns from Zacaria for 60 million euro and South African REIT Fortress marked its entry into the local logistics market by purchasing the newly developed ELI Park 1 near Bucharest (50,000 square meters) from Element Industrial/Paval Holding in a deal of c. 30 million euro.

“Two fresh industrial and logistics deals took the total for industrial investments this year to over 150 million euro or 30% of total volume, a significant jump from 80 million euro for the whole of 2020 and almost 60 million euro in 2019 and 2018. As this sector will record transactions of over 200 million euros by the end of the year, 2021 will be one of the best years in history in terms of the share of industrial assets in overall volumes, and yields on such assets are likely to compress in Romania as well”, explains Robert Miklo, Head of Capital Markets at Colliers.

At the Central and Eastern Europe (CEE) level, Colliers consultants estimate that CEE 2021 year-end volumes will accelerate to reach similar levels to 2020, of around 10 billion euro. Preliminary EMEA volumes are estimated to be down ca.32% year on year in the first 9 months of the year, a similar decline to the one seen in Romania. Core locations in capital cities remain the key investor focus in Europe’s largest economies, particularly in the office sector, but second-tier cities are also attracting attention.

Logistics assets continue to act as an investment magnet amid the e-commerce revolution and supply chain challenges thrown up by the pandemic, notes Colliers in its latest EMEA Markets Snapshot Capital Markets Q3 2021. Political uncertainty could affect investor confidence towards the end of the year and the trajectory of the pandemic in the winter months is another potential area of concern. Even so, more large scale transactions are expected to conclude in the last three months of the year, ensuring 2021 ends on a strong note.