Follow the money. Invest in Romania!

December 7th, 2007 |

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Investing your money where the big players are going has proved to be a winning strategy.
This is the place to take a close look to real estate market when it comes to big corporate investments.

Recent years have seen a fantastic increase in foreign investments in all Romanian economy, real estate playing a major role.
Recent EU admission has reduced considerably the risk level perception, now being at the same level as the other new EU countries.

In the second semester of 2006 we have seen the first €200 million transaction and the first deal for a yield below 7%.

At the moment Romania is the favorite destination for investments founds active in Eastern Europe real estate market.
First present in the market were Austrian founds with names like Immoeast and Europolis. In 2006 there’s been an increased activity from UK founds with a record number of 11 deals. If you look at deal size the poll position is still on the Austrian side.

Market in 2006

A total of 19 transactions (€850 million) were concluded in 2006, with 9 transactions in the office sector. The volume will probably double in 2007.

Hotel transactions were rising in 2006 trying to offer supply for increasing demand of quality accommodation in Bucharest and major cities.

Retail space has seen some major investments with more deals to be concluded in Bucharest and medium cities.

Residential market will see first big transactions in 2007, the demand exceeding by far the supply. Most of the residential developers came from Spain and Israel looking to profit from the experience gained on their local markets.

Yields

For office space yields were 7.1% with a 6% forecast for 2007. Retail yields were 1% above office market, with an average of 8%.