Real estate transaction value fell by 43% in H1, to 902 million euros

The real estate transactions carried out in the first half of the year totalled 902 million, down by 43% over the same period last year, Romania ranking second among the countries of the region, in terms of operation value, according to a survey of the company Jones Lang LaSalle.

"The total value of real estate transactions in the first half of 2008 in Romania fell as against the record level of 2007, the investment activity as measured by the number of concluded transactions being particularly affected. The volume of transactions for the first half of 2008 was 902 million euros, representing a 43% drop, as compared to the same period last year, namely before the global financial crisis, shown in the Bucharest City Report of the real estate company Jones Lang LaSalle.

In the first half, transfers of high-value property dominated the Romanian real estate market. Thus, four transactions, in a total amount of 750 million euros, represented more than 80% of the total investment volume.

The biggest transaction was the purchase of the Upground Estates project in Bucharest by the RREEF Fund, in amount of 340 million euros.

Also, three other significant transactions were concluded, aimed at finalised projects: Italian group IGD acquired the Winmarkt portfolio for 182.5 million euros, AEW Europe bought from BelRom the European Retail Park Târgu Mureş  for 90 million euros, and DEGI took over the Iris Shopping Center from local developer Avrig 35 for 140 million euros.
The causes for real estate transaction value drops are, according to Jones Lang LaSalle, the global financial crisis, which continues to restrict the ability of some buyers to obtain good financing conditions, and the large supply of spaces, leading to an increased competition between Central and Eastern Europe products and those from Western Europe to attract investors.

"Despite lower investment activity at present, the Romanian real estate continues to show very strong foundations. The demand for space from tenants continues to be very solid", reads the report. Under these circumstances, investment yields continued to grow, those for "premium" office buildings being around the value of 6.5%, while for retail they are 6.75% and for logistics spaces have reached 8%.

Curierul National