Coffee with Craig Show – daily CRE news covering the CEE region, Wednesday, November 16 with Winston Norman, Editor and Chief of EuropaProperty.com.
Property investment in Romania at €330 million in Q3 2022
The volume of investment in Romania’s commercial property sector reached €330 million in Q3 2022 and €667 million in the first nine months, while in the first three quarters of 2021 the investment market stood at around €550 million, according to Colliers.
Romania could exceed €1 billion in total investment this year, but all depends on the successful divestment of CA Immo’s office portfolio, in a deal valued at around €440 million.
In Q3, the biggest transaction saw MAS REI buying out their joint venture partner, Prime Kapital, from six retail parks spread throughout Romania, in a transaction estimated at around €190 million for 60 percent of the shares.
Across Europe’s property market, rising interest rates and weaker growth prospects are beginning to be reflected in asset pricing, say Colliers’ experts.
“Nonetheless in the UK and EMEA more broadly, real estate’s relative attractiveness will support the market and continued investment activity, particularly around prime product in major cities,” commented Richard Divall, Director of EMEA Cross Border Capital Markets at Colliers.
P3 logistic parks having a good year in Romania
P3 Logistic Parks (“P3”) closed transactions for 78,000 sqm of office and logistics space in Romania in the first nine months of this year. Of the total transactions, 34 percent are new long-term contracts (26,533 sqm) and two-thirds are short-term contracts or extensions of existing contracts (51,505 sqm).
Among the projects that the developer has been working on locally during this period is the completion of the accommodation spaces in Bucharest A1 Park. Also, as part of the development strategy in Romania, P3 inaugurates a new business segment, urban logistics. This year, P3 acquired a plot of land of about 4 hectares in the eastern part of Bucharest, where it intends to develop a warehouse of 18,000 sqm.
Sînziana Pardhan, Managing Director P3 in Romania, says: “We can say that so far, 2022 has been a very good year in terms of market dynamics. The logistics companies continue to have the largest share in our discussions with customers, followed by retailers and distributors. Although we didn’t see a negative impact on the volume of transactions, we do see concerns from our customers about the coming year, given the impact of general price increases on purchasing power.”
Healthy office occupier activity in cee capital cities
The office property markets in the CEE capital cities were marked by buoyant occupier demand and rental dynamics, according to Forton, a member of the Cushman & Wakefield Alliance for Bulgaria. The occupier’s activity was generally healthy in Q1-Q3 2022: aggregate total take-up increased by 25percent y/y, while net absorption was positive in all the cities in focus and grew by 17 percent y/y as the aggregate figure.
The office delivery pipeline remains significant in the region, with around 1.2 million sqm under construction, of which 30 percent may be delivered in Q4 2022. The overall vacancy rates in Q3 2022 were slightly higher than the figures in Prague, Budapest and Sofia a year ago. Over the quarter, vacancy softened in Bucharest and Prague, remained generally unchanged in Bratislava and Sofia, but increased in Budapest and Warsaw.
The office segment accounted for 44 percent of the total investment volumes recorded in the CEE during the first three quarters of 2022. The acquisition of Generation Park Y in Poland was the major office transaction reported. Also, Google’s acquisition of The Warsaw Hub in Poland remains the landmark investment transaction of the year. Despite the perceived upward pressure, during Q3 2022, prime office yields were stable in most CEE capitals.
Nooka Space partners with Nepi Rockcastle
Nooka Space has launched a smart flex office service within Nepi Rockcastle shopping malls across Romania. With office booths placed both indoors and outdoors, Nooka Space aims to enhance the customer experience. Nooka Space outdoor and indoor office booths can be found in Promenada Mall, Mega Mall, Shopping City Timisoara, Promenada Sibiu, and Shopping City Sibiu.
Sandu Băbășan, Co-Founder Nooka Space “Innovation helps us to keep pace with changes and to meet the needs of today’s consumers who increasingly value quality services, flexibility, and solutions that enable work-life balance.”
Marius Barbu, Asset Management Director, NEPI Rockcastle: “Until recently, a visit to the mall was primarily about the shopping and the entertainment component, but the pandemic has changed the way we work and amplified the need for flexibility.”