BUCHAREST (Romania), August 12 (SeeNews) - Romania is gaining momentum with high levels of real estate investment and its market is expected to exceed 1.1 billion euro ($1.23 billion) by the end this year, Sweden-based real estate developer Skanska said on Monday.
Over recent years, Romania has become one of Central Eastern Europe’s most attractive regions to start operations in, Skanska said in a press release.
A well performing market and the good condition of Romania's economy is also clearly evidenced by investment volumes on the real estate market, the company noted.
"Until recently, investors aiming to diversify their portfolio of assets mainly focused their attention on Warsaw, Prague and Budapest. Of course, these locations are still highly attractive and provide favorable conditions for investing capital, however, we are observing a significant increase in Romania’s investment importance, especially its capital city," Head of Capital Markets Czech Republic and Leader Director CEE Capital Markets Mike Atwell said.
"Bucharest is the country’s biggest office market where attractive prime yields and relatively low vacancy rates encourage developers to start new projects, with almost 300,000 square meters expected to be delivered in 2019," Atwell added.
The development of the BPO and SSC & IT sectors has had a significant impact on demand for prime office space in Bucharest. Last year, local stock was extended by 148,000 square meters.
“Along with high demand for office space in Bucharest among tenants, we also observe increasing activity of investors who want to have top-quality assets from different parts of the CEE in their portfolio and still look for high returns on investment. Over the years Bucharest has become one of the most desirable locations and we are happy to be a part of such vibrant and dynamic market, all the more because we have been running our operations here since 2011," Head of Divestments Skanska commercial business development unit in CEE Adrian Karczewicz said.
According to research by global real estate services firm JLL, by the end of 2020 Romania is expected to become the second largest economy in the CEE and continues to attract investors from all over the world – not only from Europe, but also those from South Africa, the USA and China, Skanska noted.
In the first quarter of 2019, Romanian GDP grew by 5.1%, while it increased by 4.1% in 2018.
Skanska develops commercial properties in select home markets in Poland, the Czech Republic, Romania and Hungary, while the residential development is active in Prague and Warsaw.