This is a marathon of patience, not a speed race…



This year is definitely a better year than 2010. No one can say the opposite. But despite the positive signs, the first six months have not seen many transactions completed. The growth is still slow, after two years of “silence”. It looks like the Romanian Real Estate market has become a marathon similar to the grand prix of Monaco, where patience and careful moves overcome speed.

Slow, fragile recovery

This year is the first when we see the prices reaching some kind of stability. The number of investors who declare any sort of interest are 2-3 times bigger than in the past, but this has not led to many transactions. Buyers are careful, banks are “not so willing” to offer loans for Real Estate and the country is still not a priority for major institutional investors around Europe. The difference is that people are asking questions now, they want to be informed and (some of them) are preparing for the years that follow.

Not many “opportunities” available

Despite the fact that many properties are for sale with prices less than half compared to 2008, very few of them can be called “opportunities”. The number is probably less than 10% of the available stock today. And as the majority of transactions focus on this segment, targeting top properties at attractive prices, the majority of transactions we expect will be the ones where the owner will meet the client’s expectations. The last quarter is forecast as the most interesting of all, setting the base for a better 2012.

Residential: A new generation of projects is in the pipeline

With “Prima Casa 4” having started, most people focus on its details. But at the same time, there is a significant change in the market. The second generation of residential developments is in the pipeline, with some projects ready to start this year and plenty more being prepared for the following 2. The main difference compared to the past is that they will be more central, better designed and at a more affordable price, closer to Romanian middle class expectations.

Income Properties: Many clients, limited (good) stock

If there is one market segment with more foreign clients than good properties, it’s the one of income generating assets. There are many players looking to invest in this market, but few of them find what they are searching for. The limited stock of good properties will not be increased and this will be the first segment where prices will pick up.

Investments: More interest, more deals to come

Many retailers (or retail developers) check for lands across the country, this time trying to find them positioned as central as possible. Also since the beginning of the year we have seen several investors who are searching for the best location / potential / price ratio. As this market includes many distressed owners, there are plenty of transactions which are under due diligence, or in other phases of preparation. This does not mean that the prices have picked up, but that nowadays we have clients for properties which combine location, potential and price.

Let us not forget large compact agricultural lands and forests, which have been the least affected by the crisis and are “hot” once more.

Retail: More players expected

The recent success story of a famous fashion retailer is carefully studied by other brands as well. Retail in Romania is under expansion, with more players interested in entering. But, once again, everyone is trying to avoid risks and keep costs under control.

Office: Busier than 2010

Relocations have been dominating the first half of 2011 as well. But this year we are also witnessing serious interest from some new companies looking to enter the Romanian market (Bucharest, Cluj, Timisoara). The prices are more or less stable, including the “rules of the game”. Tenants’ needs come first and good deals have been signed. At the same time though, the available A Class stock is shrinking. This is why the following 12 months are considered to be the last excellent months for a company to lease spaces.

Industrial: Slowly picking up

A “peaceful” market, with a few new projects, which is probably the most stable of all. This is why it is dominated by major companies, with experience and know how, who have made the right moves during the crisis. 

Overall, we seem to have come out of the “eye of the storm’, so to speak, but any number of major international financial problems could block us once more. This is why investors will remain careful, until they are sure that Romania’s growth is steady. I personally see the glass as being “half full”. How about you?


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