Real estate transactions growing. Cyprus situation could stimulate real estate investments.
The real estate investment in the 1Q in Romania totalized EUR 116 mil., representing 18% growth compared to the same period of last year. The office sector represented 67.7% of the total volume, followed by retail with 21.4%, the most recent report of DTZ Echinox has shown.
“On the background of an increased investment activity registered in the first quarter of the year, we expect a slight raise of the investment volume by the end of 2013, which will exceed EUR 300 mil. “ has declared Cristian Ustinescu, Ivestment Department director of DTZ Echinox.
The absence of ease credit conditions will have a strong impact over the investment activity in Romania. On the background of restricted credit access and weak market conditions, the capital holders will take advantage of their privileged position in negotiations.
“We anticipate the maintaining of a reserved attitude of the investors and of the developers in assuming risks and orienting exclusively towards prime products in top locations. The most appreciated assets from the investment point of view will follow the international trend of focus over the retail prime products first and secondly over the office buildings with sound tenants, secured on long term.”, the report also showed.
In this context, the market conditions will continue to be a challenge for the investors ready to place their equity in assets and will pressure the yields corresponding to the sale prices. On the background of a volatile economic environment, on short and medium term we do not expect the entrance on the Romanian market of new important investors. The profile of these investors is one of opportunistic type looking for high yield rates in order to compensate the market risk.
Following the recent operations in Cyprus, aiming the rescue of the banking system by taxing the deposits, we expect the reduction at some point the investors trust in bank deposits as capital preserving means. This could be a stimulus for redirecting the capitals towards alternative classes of products, especially from the investors that opted in the last year for keeping their money in banks because of the incertitude of other capital markets.
Real estate assets could become a good alternative for the capital preservation, considering that traditionally the properties had insured an appropriate mean of inflation coverage. (source: wall-street.ro)