October 20 (SeeNews) - Property investments in Romania rose 31% year-on-year in the first nine months of 2020, reaching 738.4 million euro ($871 million), property consultancy Crosspoint Real Estate said on Tuesday.
Close to 85% of property investments in Romania were made in Bucharest, Crosspoint said in its third-quarter report on the Romanian investment market.
Over 93% of the market volumes were office transactions, followed by industrial, hotel and retail deals, which accounted for 6%, 1% and 0.3% respectively.
"Despite of the unprecedented situation we are in and the strong blow dealt to the economy, the Romanian investment market has performed better in the first three quarters of 2020 than in the whole 12 months of 2019," Crosspoint noted.
"Although this is mainly due to the postponement of the largest transaction - the 307 million euro acquisition of NEPI's office portfolio by AFI Europe, initiated in late 2019 - the market seems to be very little affected by the crisis, at least for the remainder of the year."
The 307 million euro deal through which property investment and development group NEPI sold its office portfolio to Dutch-registered real estate developer AFI Europe was closed in August.
In April 2020, U.S. private equity firm Lone Star sold a 61.49% stake in Romania-focused real estate developer GTC for an estimated 126 million euro in the second biggest real estate deal closed so far this year. The third biggest real estate deal in 2020 was also struck in April, when Chinese investment company Fosun paid an estimated 100 million euro for Floreasca Park office building to German real estate investment firm GLL.
In May, real investment firm Arion Green Investment bought Global City office buildings, located in Pipera, from Greek investment fund Global Finance for an estimated 55 million euro.
At the beginning of the year, London-listed Globalworth Real Estate Investment Globalworth bought a 50% stake in Elgan Offices from Elgan Group, boosting its shareholding to 100% for an estimated 38 million euro in the fifth biggest real estate deal of the year, according to Crosspoint's report.
Although offices remain the preferred option for investors, the sector is going through drastic changes, with a lot of uncertainty surrounding the recovery to pre-pandemic levels, Crosspoint said. Given that while badly hit, the retail sector has seen a speedier recovery than expected, its capacity to bounce back might attract future investors, it added.
"The Covid-19 crisis might also mark the turning point for the residential market, an asset that has not yet been considered by investors in Romania," Crosspoint noted.
Prime yields in Romania have remained stable throughout 2020 and continue to be the highest in Europe. They are expected to stay relatively stable, at least for the remainder of the year. Office prime yields are at 7%, retail prime yields are at 6.5%-7%, while industrial prime yields are at 8%, the report showed.
Founded in 2005, Crosspoint Real Estate offers transactional advice and real estate consultancy, as well as financial solutions to international investors.
($ = 0.8472 euro)