January 25 (SeeNews) - Property investment in Romania rose 10% to almost 1 billion euro ($1.22 billion) in 2017 and developers have a strong pipeline for 2018, property and investment management services provider Jones Lang LaSalle (JLL) said on Thursday.
The number of transactions in Romania increased in 2017 compared to the previous year, with the average deal size measuring approximately 28.5 million euro, JLL said in a press release.
"The macro-economic forecast for Romania continues to be positive, despite some recent concerns. Sentiment is strong and with a solid pipeline of transactions set for 2018 we expect a good year ahead," JLL Romania associate director for capital markets, Andrei Vacaru, said.
Romania's capital Bucharest attracted over 36% of the total investment volume, less than over 70% recorded in 2016, showing that liquidity in secondary cities has improved, JLL noted. Market volumes were dominated by retail transactions (43%), while industrial, hotels and office accounted for over 22%, 18% and 17%, respectively.
A key transaction was the sale of the Radisson Hospitality Complex in Bucharest by Elbit Imaging.
"The Radisson transaction, on the background of a sluggish office investment market, has placed hotels ahead of offices in terms of liquidity in 2017 in Romania, which is unusual," Andrei Vacaru added. JLL Romania advised Elbit in the sale of the hotel.
The largest transaction of the year was the acquisition of 50% of Iulius Group’s retail and office portfolio (Iulius Mall Cluj-Napoca, Iulius Mall Iasi, Iulius Mall Timisoara and Iulius Mall Suceava and three office buildings) by South African group Atterbury. The second most important retail transaction was the acquisition by Mitiska of a portfolio consisting of 11 retail properties and three development projects from Alpha Group.
The most notable office transaction was the acquisition by Immochan of Coresi Business Park Brasov from Ascenta Management. Other major transactions include the acquisition of Green Court Building C by Globalworth from Skanska for 38 million euro and the sale of ART BC to Hili Properties for 30 million euro.
In industrial, the largest deal in 2017 was the acquisition of Logicor’s Romanian portfolio as part of a Pan-European transaction by China Investment Corporation from Blackstone. Other major deals included the acquisition of the Renault warehouse in Oarja by Globalworth for 42 million euro.
Romania accounted for 8% of the total investment volume recorded in CEE Region of 12.98 billion euro (3.3% increase over 2016). The growth of the Romanian market exceeds the increase of the CEE volumes, but the local market is still below its potential, JLL noted.
The full year breakdown saw Poland and the Czech Republic each record new second best ever volumes with a regional share of 39% and 27% respectively. They were followed by Hungary (14%), Romania (8%), SEE markets (8%) and Slovakia (4%), according to CEE Market Report released by JLL.
In 2016, property investment in Romania jumped by 35% to 890 million euro.
($ =0.8166 euro)