Investment returns remained roughly the same as in 2017, with office investment returns falling by 0.25% while retail yields rose slightly by 0.25%.
The fact that the products available on the market are more numerous, especially on the office segment, the postponement of some transactions started last year, as well as the increased interest of new foreign investors on the Romanian market, will influence in 2018 the development of the domestic investment market.
Although in the first quarter of 2018 the investment market did not have a significant evolution, in the second quarter the volume of transactions increased, balancing the total value of investments for the first semester of this year. Even if the level of investment did not reach the one in the first half of last year, being 20% lower than in H1 2017, it reached 428 million euros, with transactions of 384 million euros in the second quarter.
The most intense investment activity was registered in the office segment, with a share of 65% of the total value of the transactions. The most important transaction on this segment (€ 170 million) was the sale of the Oregon Park office complex in Bucharest to Lion's Head Investment, an investment fund with South African capital and a new player on the Romanian investment market.
Due to the shortage of new products, there was only one important transaction in the industrial market in Braşov, where WDP acquired an industrial project of 20,000 sqm for 11 million euros.
With the delivery of new industrial projects and the need for expansion of existing players, there are chances that by the end of the year this segment will have some important transactions.
With transactions in more than 300 million Euros and new products that will most likely appear on the market, the second half of the year will record sustained investment.
An aspect that already noticed during the first semester and which will continue to exist during 2018 is that new investors are emerging on the Romanian market, encouraged by the results of the established investors.
Dominated by foreign investors, especially South African investment funds, Romania has become an entry point for South African institutions wishing to expand their portfolios in Central and Eastern Europe. The Romanian investment market records the highest level of investment returns in Europe (7.25% -7.5% for office buildings).
Taking into account the relatively stable economic conditions, we can expect an increase in the interest of foreign investors for Romania and a potential yield compression.
By the end of the year, the volume of real estate investment will most likely reach one billion euros last year. Office buildings will continue to be the most sought-after products.
Investment activity on the retail market will most likely focus on secondary markets. The capital will remain the top destination for investors due to access to quality products, the availability of qualified labor force and the presence of the most important economic operators in the country. (source: businesscover.ro)
