The Romanian real estate investment market ended the first half (H1) of 2023 with a total value of EUR 168 million, about half of last year’s level, according to a recent report by Colliers.
Industrial and logistics accounted for around 36% of the volume and office for around 31%. Retail was next with around 23% of the turnover, followed by hotels with almost 11%.
“This weak result is not at all surprising to Colliers consultants, who have been estimating since the beginning of the year that the deal pipeline will slow down compared to the exceptional years of 2021 and 2022, given the already difficult environment for deal-making,” the press release said.
The biggest deal of the year was the sale and leaseback of the warehouses of FM Logistic, a 3PL operator with a portfolio of around 100,000 sqm in several cities, which was acquired by CTP for an estimated €60m (figure not disclosed by either party).
The market is currently in a price discovery mode, with neither buyers nor sellers wanting to be the party that ends up being proven wrong by market trends in a few quarters. As a result, the gap between buyers’ and sellers’ expectations is certainly wider than it has been in the recent past. The main sticking points are, of course, the sharply higher interest rates and, equally important, the uncertainties associated with the future path of interest rates,” says Anca Merdescu, Director Investment & Debt Advisory at Colliers.
“On a more positive note, we continue to see good interest in local assets, including from potential new names, although perhaps fewer of these enquiries are progressing to more advanced stages compared to previous years. We would interpret this as confidence in the country’s longer-term potential, coupled with caution in the current environment,” she added.
Several large deals are currently in various stages and could be completed in the second half of the year, bringing the total volume for the year towards €500-600 million, about half of last year’s solid €1.2 billion, according to the same Colliers report.
Retail volumes should be slightly higher than in previous years, as major deals could be completed in the coming period, predict the Colliers consultants, who point out that with fewer office deals being completed, this could be a more balanced year in terms of overall structure.
In Central and Eastern Europe (Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia), the total investment volume fell to EUR 2 billion in H1. The total investment volume for the whole year is estimated at EUR 5 bn, “which is still one of the worst results of the last 10 years and more than half of the average of the last 5 years of around EUR 12 bn”.
