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Real estate investors and developers in Romania believe that inflation, the increase of financing costs, the geopolitical situation and the increase of construction costs are the main factors that impact the real estate market, going to influence both the demand and the level of rents, but they remain positive, most of them having plans to expand in the next three years, according to a barometer carried out by a real estate consulting company, told Agerpres.
Inflation was indicated almost unanimously (93pct) as the main macroeconomic risk that could have an impact on the real estate market of Romania, a market that will also be influenced by the increase of financing costs (86pct of responses) and the geopolitical situation (76pct), according to the data of the first edition of the Real Estate Investors Sentiment Barometer, carried out by Cushman & Wakefield Echinox.
According to a press release sent to AGERPRES on Thursday, despite the existing challenges, a clear majority of investors (71pct) are looking to expand their portfolios, while the remaining 29pct want to maintain their current portfolios in the next three years.
Bucharest city remains the preferred destination for future real estate investments, secondary markets (cities with a population of over 250,000 inhabitants) are also preferred by a significant number of investors and developers.
Regarding the market segments that will attract new investments in the next 12 months, only 5pct of the respondents expect a more intensive development activity on the office market.
The first five factors that can influence (positively or negatively) the development of demand are inflation, the geopolitical situation, the growth of electronic commerce, the emergence of new companies on the market and the lifting of restrictions related to the pandemic. Investors are also concerned with the deterioration of economic activity/recession, as well as with the unclear situation of the return of employees to the offices.
Most investors believe that the values of their portfolios will remain unchanged over the next 12 months. Segmented by categories of assets, 30pct of respondents estimate an increase in the value of retail properties, while 23pct of them indicate an appreciation of industrial and office projects.
Referring to the general market conditions in Romania, the most appreciated aspects are related to the quality of the IT infrastructure, the workforce and the level of taxes. At the opposite pole is the quality of the transport infrastructure, followed by bureaucracy.
Investors are positive regarding the Romanian economy and its short-term development, 45pct of participants expecting an increase of the Gross Domestic Product (GDP), 38pct a stagnation and 17pct a decrease.
Cushman & Wakefield Echinox interviewed in the period 1 October - 1 November, a number of 45 managers of some of the most important local, regional and global real estate investors and developers with a cumulative portfolio in Romania of over 10 billion EUR, representing approximately half of the local real estate market.
Cushman & Wakefield Echinox, the exclusive affiliate of Cushman & Wakefield in Romania, independently owned and operated, includes a team of over 80 professionals who provide a full range of real estate consulting services to investors, developers, owners and tenants.
