For the second year in a row, industrial and retail assets dominated trading activity, marking a significant shift from previous years when office assets were the primary focus. Environmental, social, and governance (ESG) criteria are playing an increasingly important role in the decision-making process of property investors, banks, and tenants, according to Colliers consultants. The latest report explains that while the long-term market potential remains significant, challenges persist in the short and medium term.

“Compared to last year, 2024 is much more active. There are new investor names and more deals in the pipeline that have a good chance of closing this year. One of the key challenges remains the availability and cost of funding, which is currently around 6%, but we are also seeing an increased focus on the technical quality and ESG standards of properties. Financing conditions are expected to improve, supported by high liquidity in the financial markets and the ECB's interest rate cuts, even if this process is somewhat delayed. Banks' interest in certain property sectors, especially offices, is rather limited, but there are exceptions depending on the lender, the quality of the property, and the experience of the borrower. Industrial remains the favorite sector on the banks' list, followed by retail and residential, where financing decisions are based on the viability and sustainability of each project. Refinancing, compliance with ESG standards, and other factors specific to the real estate sector or the local context continue to play an important role in the decisions of buyers and sellers," notes Anca Merdescu, Director Investment & Debt Advisory at Colliers România.

The largest transaction of the year was the sale of Globalworth's industrial portfolio, which included approximately 270,000 square meters of warehouses in several Romanian cities, as well as land for future projects, to CTP for approximately €168 million. This is one of the largest industrial transactions in Romania and the biggest since the sale of Europolis Park to Singapore's GIC in 2016. The second-largest transaction in 2024 was WDP's acquisition of Expo Market Doraly for around €90 million.

Two other major transactions in the office market, brokered by Colliers, have had a significant impact on stabilizing market returns this year. The first transaction involved the sale of The Landmark office park, a 23,500 square meter Class A leasable space in the Roman Market area, sold by Cerberus Capital Management and its regional partner Revetas Capital. The second transaction, advised by Colliers, was AFI Europe's acquisition of the myhive Victoriei office building from IMMOFINANZ, valued at approximately €27 million, with Colliers and Cushman & Wakefield Echinox appointed as co-exclusive agents.

“These two transactions are emblematic for the Romanian office market, reinforcing investor interest and confidence in this property sector. The acquisition of myhive Victoriei will bring positive change to the Old Centre of Bucharest through the renovation of an iconic building in the capital. The sale of The Landmark is the most significant transaction in the office market in the last year and a half, completed in a context where banks' interest in certain real estate sectors, especially offices, is quite limited. It also demonstrates that there is liquidity in the local real estate sector, setting a precedent for future transactions and helping to boost the confidence of potential new investors in Romania," adds Robert Miklo, Director Investment Services at Colliers.

Another noteworthy transaction is the sale of Funshop Park Turda by Scallier to BT Property for approximately €15 million. This is the second transaction for BT Property, a division of Banca Transilvania, and it reinforces the presence of a new type of capital in the local market. The sale of the logistics parks owned by Global Vision and Globalworth to the Belgian developer WDP was also completed at the beginning of the second half of the year, bringing the total volume of industrial transactions for the year to more than €100 million.

At the Central and Eastern European (CEE) level, Romania was the top performer in the first half of the year compared to the other five major economies (Bulgaria, Czech Republic, Hungary, Poland, and Slovakia), according to the latest ”H1 2024 Investment Scene” report published by Colliers. On average, the region's volume increased by 29% year-on-year to around €3.3 billion, but it fell by 41% compared to H1 2022. The share of office transactions also declined in the CEE, accounting for 31% of the traded volume, while retail transactions contributed 32%. The industrial and logistics (I&L) sector ranked third, with a share of 24%.

Given the current context, Colliers experts estimate regional transaction volumes of around €5.5 billion for the full year 2024, roughly half the 10-year average. Poland dominated regional volumes, accounting for nearly 50% of the total, thanks to a significant increase in local activity in the second quarter.