Stefan Gheorghiu, the head of the local operations of Austria's Europolis real estate investment fund, considers that the real estate market could see new record deals as of next year. "The value of deals on the real estate market will get higher next year and we will see several acquisitions worth above 100 million euros being concluded by the end of 2007. There will be a period of successive records," stated Stefan Gheorghiu, 33, general manager with Europolis Real Estate Asset Management. In the first half of this year, deals worth above 200 million euros were made on the office market.
The biggest deal on the market was the acquisition of Charles de Gaulle Plaza building by Accession Fund real estate investment fund, managed by Germany's GLL Real Estate, for 80 million euros. The value of this transaction might be topped this year if America House building, owned by Israeli GTC developer, is sold.
Despite the rising number of real estate projects being announced on the market, not all of them are delivered onto the market in the end.
The high number of foreign developers and of investment funds with a track record on the real estate market having entered Romania in recent years has generated steady growth of investments on the real estate market. However, the domestic market has not followed the trend of neighbouring markets because of price and yield fluctuations witnessed in recent years.
"The real estate market is facing tough competition leading to yield decreases over the following years. We cannot compare Romania with Central and East European markets given that it's been demonstrated over recent years the domestic market has witnessed a different progression compared with Poland, the Czech Republic or Hungary," considers Gheorghiu.
Major foreign players started entering Romania during the 2003-2004 period. "The real estate market has been growing since Romania joined the NATO and the EU integration will bring more investors to Romania. Nonetheless, we cannot anticipate what is going to happen with the market after EU integration," states the Europolis representative. Most real estate projects under development do not meet high quality standards because investors did not have the necessary experience, considers Gheorghiu.
"A rising number of domestic investors having announced real estate projects are becoming aware they need to resort to foreign experienced players to help them deliver high-quality products onto the market," points out Gheorghiu. Developers deciding to sell after projects are finalised are facing certain risks at present because the market is fluctuating.
Whereas Austrian and Irish funds made most of the acquisitions on the real estate market until last year, this year has been British investment funds' turn to get really aggressive.
Europolis
Has so far invested 180m euros in industrial and office projects
Entered the domestic market in 2003, by acquiring Europe House office building of Bucharest
In the autumn of 2004 made the second acquisition on the domestic market, of Cefin Logistic Park
Bought the two projects for 103m euros
Signed an expansion of Cefin Logistic Park project by 70m euros
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