Prices in Romania have remained stable, but in the region we are seeing an upward trend in yields
Bucharest, October 6th, 2022 - Since the beginning of the year, the volume of transactions in commercial real estate assets with a value of €5 million or more totalled approximately €656 million, 16.5% higher compared to the same period in 2021, out of which €330 million represents the volume transacted in Q3. We see an increase of 28% compared to the previous quarter and 26.5% compared to the same quarter of last year.
For 2022, depending on the development of some important transactions in the next period, we could reach a total transaction volume of around €1.2 billion. This would be the highest annual investment volume recorded since the global economic crisis of 2008.
The increase in liquidity in the local market is in line with the activity in the region, where historic volumes are also expected.
In terms of prime yields, there were no changes in Romania during the third quarter, with yields remaining at 6.75% for the office sector, 7.25% for retail and 7.50% for the industrial segment.
It is important to note that, in the case of yields, the evolution recorded in Romania is not in line with the trend in the region for the moment. In Poland, for example, the largest market in Central and Eastern Europe, we can observe a significant increase in yields over the course of this year, of 100 bps for the industrial sector and 50 bps for the office sector, reflecting a price adjustment of 22% for industrial and 11% for office, partly offset by rising rents.
"The trend in the region can be explained by both increased risk aversion and rising financing costs. The main reasons why Romania has not followed the same trajectory in recent quarters are the significantly higher levels of yields offered by the local market as well as the type and source of capital of the investors interested in acquiring in our country", explained Andrei Văcaru, Head of Capital Markets JLL Romania.
In the first 9 months of 2022, the office sector continues to hold the first position in terms of share in the transaction volume, with 46.5% (€305 million), followed by retail with about 36% (€235 million) and industrial with about 14% (€89.5 million).
63% of all transactions registered in Romania in the first 9 months of 2022 covered properties in Bucharest, with a cumulative value of €414.5 million.
In terms of the source of investors' capital, investors from South Africa had the largest share with 29% of the total, followed by those from Romania (20%), Austria (19%) and Belgium (14.6%).
"In the current market conditions, we expect that the majority of transactions in the coming period will be made by investors already familiar with Romania or at least with the region. Investors who have equity and do not need bank financing will have an important competitive advantage and properties with bank financing transferable to a potential buyer will be significantly more liquid", said Andrei Văcaru, Head of Capital Markets JLL Romania.