Shrinking yields from real estate markets in countries like the Czech Republic and Hungary are forcing investors to look for more profitable opportunities in the East, with Romania becoming increasingly attractive to developers seeking higher profits than those found on western markets, according to the Wall Street Journal Europe's Monday edition.
Last month, the Austrian company Europolis Real Estate Asset Management concluded the largest transaction to date on the Romanian market by buying Cefin logistics park, a deal estimated at around 75 million euros. Cefin park covers around 150,000 square metres and was acquired ahead of its market delivery deadline.
"The Romanian market is attractive because it offers higher yields than most markets of Central and Eastern Europe where it is becoming increasingly more difficult to find investment opportunities," said Bernhard Mayer, Europolis executive manager.
The company, which has operations on the Polish, Czech and Hungarian markets, is also interested in Russia, Ukraine and Bulgaria.
Profits related to investments on the markets where Europolis operates have decreased and there are fewer investment opportunities, added Mayer. "The office market is more attractive in Romania, with an annual yield of about 12%, as compared to 8% in the case of a class-A office buildings in the Czech Republic". Europolis expects the Cefin project to bring it a yearly yield of about 13%.
"Investors seem readier to enter East European markets and are seeking new projects because profits in Central European markets have seen a significant slump," said Charles Taylor, manager of Cushman & Wakefield Healy & Baker real estate consultancy. Investors looking for two-digit yields will see Romania as a natural target, added Taylor. German DB Real Estate investment fund is also interested in investing in the Romanian market, but will not take the first step until the political and economic situation becomes more stable, explained Michael Kremer, executive manager of the fund. The American company GE Commercial Finance Real Estate has been monitoring the Romanian real estate market for four years now, said Karim Habra, a regional manager with the company.
"Romania has made considerable progress in the last two years, including its integration into NATO structures and the moves it is making to join the European Union. We have various plans for Romania, related both to direct acquisitions and to the development of some of our own projects, and we hope some of them will be materialised next year," explained Habra.
alexandru.cerchez@zf.ro
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