Real Estate Market Spotlight – Q3 2019

Low interest rates, core European markets compressing yields are pushing  capital towards  alternative investments  and CEE markets including Romania. Although a peripheral market and unable to absorb large investments, Romania is still attracting  new investors with a record high investment yield, stable macroeconomic environment, strong services and IT sector and well qualified workforce.

Although on a slight decline, prime yields continue to be among the highest in Europe. The CEE region has had the strongest yield compression this year but yields in Romania are still at 7% or higher in all market sectors. Thus, prime office yields stand at 7% to 7.15%, prime retail yields at 7% and prime industrial yields at 8%.

The dominant industry remains the IT&C sector, with a 43% share in the total take-up.

The significant number of new deliveries in the office market is reflected in the fact that 36% of the leases in 2019 so far have been relocations. Furthermore, pre-leases account for 34% of the of the space rented. As tenants are searching for the newest and best spaces, owners of older buildings will be compelled to decrease their rents or to upgrade their spaces in order to keep up with an increasingly dynamic market.

Download the full report for the analysis of the investment, office and industrial market segments.