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Behind the thick and high closed doors of the largest office transaction in Romania

Colliers International advised NEPI Rockcastle on the sale of four Class A office projects to AFI Europe



As experts working many years in the real estate industry, we participated in many transactions and we can say without a doubt that each is unique in its own way. Each has its own milestones and learnings, bringing people with vast experience at the same table, rising new challenges and allowing all parties to better understand the business and the industry. But, sometimes, you encounter a transaction that is so big, so complex and so challenging, that it takes you a few leaps further, propelling you as a professional and as a business and showing you that there is always something you haven’t seen or done before. And this is precisely the case of the freshly closed NEPI Rockcastle - AFI Europe €307 million transaction.

Add fuel to the fire with a “pandemic” context, which further complicates an already challenging transaction through its size and complexity, and you can say you are facing a “once in a lifetime challenge”. But once you finish it flawlessly, with the help of an amazing team and the trust of special partners, despite all curveballs, in a very strange year for the entire global economy, the accomplishment is that much greater than the transaction itself.

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The NEPI Rockcastle - AFI Europe transaction’s story begins with a strategic decision made by one of the most important investors in the real estate market in the Central and Eastern Europe (CEE), NEPI Rockcastle. A giant player in the CEE region, with assets worth more than €6 billion, NEPI Rockcastle chose to focus on the high quality and dominant retail sector and sell office assets. Easy to say, not so easy to do. A strategic disposal made by such a big player always comes with important challenges.

Usually, the value of transactions in Romania is in the smaller ballpark, so there’s always a significant pool of interested investors. Most transactions in Romania are below the €100 million range, with only some standalone investments exceeding this level. But when the value of a single transaction surpasses €300 million, a third of the estimated annual value of the total real estate investment market in the country, somewhere around €1 billion this year, the complexity of the process grows exponentially. Going on a limb, a real estate investment specialist would probably find it easier to sell 10 properties worth €30 million each than a single €300 million transaction. And that's even before the Covid-19 strike.



2020 will remain in history, undoubtedly, as the “pandemic year”. Everything was running well and, in March, without any significant warning, almost every sector of the economy found itself in a very difficult, unprecedented situation. Transportation, manufacturing, hotels, restaurants, airlines and many other sectors all over the world completely froze or faced significant cash flow issues, and Romania made no exception. Suddenly, market players took a more cautious approach and many preferred to wait and see what happens next before making any major decision, with only a few exceptions.

Surprising or not, the Romanian real estate market wasn't as seriously affected as other economic sectors. And the main reason is the commitment. The market is much more mature today than 10 years ago, seeing solid long-term contracts, higher liquidity, big serious players and bigger transaction volumes. And even though many transactions were put on hold, some withstood the uncertain context generated by the Covid-19 pandemics with only little delays.



While discussions for the NEPI Rockcastle - AFI Europe transaction were also initially postponed until a clearer market context, the process was resumed quicker than expected and the transaction was closed in record time. The sale of NEPI Rockcastle’s office portfolio to AFI Europe, first agreed on at the end of 2019, is the largest transaction with revenue generating commercial real estate assets in Romania, competing with major transactions in Central and Eastern Europe, considering that such acquisitions are not often closed in much larger markets such as Poland, where market liquidity is 4-5 times higher than in Romania. In addition, it is the most important strategic sale of a portfolio brokered by Colliers International in Romania.

The transaction is a benchmark not only through its value and complexity. The fact that it was completed in an economic context marked by Covid-19 confirms the investor's confidence in the potential of the assets and the market. At the same time, it proves that there is liquidity in the local real estate sector, being a reference point for future transactions and contributing to increasing confidence of potential investors in Romania.

The sale process was laborious and involved complex strategies, the main challenge starting precisely from the scale of the transaction and, implicitly, from attracting a major strategic investor, with the financial strength to support such an acquisition. So AFI Europe’s move is a very strong message for foreign investors who  seek to place very substantial amounts of capital in the market, looking at large-scale acquisitions and having long-term strategies. In other words, the transaction puts Romania on the map for large, strategic, regional investors: the kind that generally seek large investments worth more than €200 million and rarely consider less.



In conclusion, this ”pandemic year” it's not so bad for the Romanian investment market after all. The market is on the way to €1 billion in annual liquidity with about €800 million already closed. Romania is on the map for big investors, the relationship between landlords and tenants is stable and evolving, while delayed payments are just exceptions. Of course, the medium to long term evolution still lacks clarity, but the worst seems to already be behind us. 

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Robert Miklo

Director | Romania


Robert was born and raised in Romania, attended Emanuel University of Oradea and joined Colliers International in 2006. Since entering the real estate services industry, he has focused his activities on consulting, research and the sale of investment properties. Robert deals with private and institutional investors and remains up-to-date on product and global and local market context.

Since joining Colliers International, Robert has served as:
- 2006-2008: Consulting - carried out approx. thirty feasibility and market studies for investors, developers and financing institutions
- 2008: Investment Analyst
- 2009: Coordinator of Research Division
- 2010 - Investment Sales
Robert is also a member and moderator at the School of Leadership, an educational initiative of Colliers International Romania and a guest lecturer at the Griffiths School of Management.
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Laurentiu Lazar

Managing Partner & Head of Investment | Romania


Laurentiu, Managing Partner at Colliers International Romania, has over 14 years of experience in real estate services including valuation, advisory and investment. He joined Colliers in 2007 as a real estate valuer and in 2009 he was promoted to Head of Valuation and Advisory Services, with the responsibility to expand the valuation team in Romania. In 2015, he became Head of Investment, developing the Capital Markets services and later appointed as Senior Partner within Colliers International Romania in 2016, managing over 20 experts. As of march 2018, Laurentiu was promoted Managing Partner.

Before joining Colliers, Laurentiu worked for 10 years at Vodafone Romania/Connex, holding different management positions within Marketing and Customer Operations Divisions. Between 2014 and 2017 he has been Vice-President of ANEVAR (Romanian Association of Valuers).

In parallel, I was involved raising funds for various projects, such as Teach for Romania, The Romanian Foundation for Neurology and Epilepsy and “Prietenia” Association.

Quote: „When given the choice between being right or being kind, choose kind.” – Wayne W. Dyer

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