People of Cushman & Wakefield Echinox
Romania’s economy recorded an impressive growth throughout H1 2015. Sustained by monetary and fiscal ease, GDP grew by 3.8% y/y. Economic growth is forecasted to continue going forward. According to Oxford Economics, Romania’s GDP growth rate will be at 3.3% in 2015, then at 3.4% in 2016. Consumer spending will continue to have the highest contribution, being encouraged by low inflation, tax cuts, real income increase and a constant decrease in unemployment.
After an impressive 2014 that registered one of the highest investment volumes ever recorded in Romania, the first half of 2015 witnessed a relatively slow start. Throughout H1 2015 around € 62 million were invested in commercial property in Romania.
Although market liquidity has been relatively low in recent years, given that yields are on a compression trend, sellers’ price expectations have increased. This has led to a gap between expectations of sellers and purchasers, which in return led to a limited number of deals.
For the second half of 2015 we expect the total value of real estate transactions to be considerably higher. Economic growth, political stability and the yield difference between the local market and other CEE markets draws investors’ attention. Thus, a number of deals, targeting mainly prime office and industrial properties are currently in various stages of negotiation and are expected to be finalized by year’s end.
