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Romanian investors have made history on the local real estate market in 2018: Record investments of nearly EUR 200 million

2018 ended with a premiere on the local real estate market: Romanian investors ranked second in the generated volumes top, by nationality. Almost EUR 200 mn were paid to buy commercial properties (about a quarter of the total volume), a significant leap of more than five times comparing with 2017, according to the real estate consultancy company Colliers International.

The increased presence of the Romanian capital on the real estate market marks a possible turning point, because one of the observations we have received so far from some foreign investors without activity here was: if Romanians do not trust the local assets, why should we? At the same time, it is also a sign that Romania’s economy as a whole has grown so much in the last decade to lead to capital accumulation, a positive aspect for longer term prospects”, Robert Miklo, Director Investment Services at Colliers International said.

On average, at the level of Central and Eastern European economies, local buyers accounted for 23% of the investment activity, so, for the first time, Romania got closer to the reality from other countries in the region. Another observation would be that, in Romania, South-African capital is still dominant, having a share of almost one third of the total investment volume, which is double compared to the share it has in the whole region.

A second memorable event of the past year is that two of the signed deals are among the top ten largest real estate transactions.

The sale of the office buildings The Bridge and Oregon Park in Bucharest are included in the top 10 largest real estate transactions ever made in Romania. If Romania's economy does not go too far from potential growth in 2019 (about 4%) and the global economy will remain in relatively favorable dynamics, growth in the real estate market can also be noticed. Last year, yields in the Central and Eastern European capitals continued to decline, increasing the gap with the prices in Romania. Thus, despite the more difficult economic context and higher uncertainties compared to a year ago, there are premises for 2019 to generate new positive surprises, and these two records of 2018 could even be surpassed”, Robert Miklo added.

The largest transaction made by the Romanian capital also marked the entry on the real estate market of the Dedeman group, which bought The Bridge office project in Bucharest's Center-West area for a total value close to EUR 200 mn (when considering the investments in 2018, a lower figure for this transaction was taken into account as the third phase will be completed in 2019).

Other transactions made by local stock companies were smaller but relevant for the market: the acquisition of the Bucharest Corporate Center office building by One United Properties or the acquisition of Oradea Shopping City by Sapient Center Oradea.