Investments in real estate market down by 50 pct in first quarter (report)

The volume of investments on the real estate market of Romania was around 74 million euro in the first quarter of this year, by approximately 50 pct less than in the similar period of last year, yet estimates for the entire year indicate an investment volume of over 700 million euro, according to Bucharest City Report Q1 2021, carried out by JLL, agerpres reports.

According to developers, the office sector continues to be the most liquid, representing approximately 50 pct of the potential volume of 2021. The total deman in Bucharest was of 51,000 sq m, a little under that of Q1 2020 (55,000 sq m). The net demand represented 19,600 sq m, comparable with 19,200 sq m, registered in the first quarter of 2020. Relocations had the highest weight in the total of demand, respectively 34 pct, being followed by renewals and project renegotiations, with around 25 pct.

The vacancy rate continued to grow in Q1, up to 13.4 pct, from approximately 11.3 pct in Q4 2020. The vaccination campaign against COVID-19 will probably last the entire year, and the return of employees to offices will be done gradually.

Deliveries of new projects in Q1 2021 totaled 29,500 sq m, so that the stock in Bucharest reached nearly 3 million sq m, deliveries being 60 pct less than in Q1 2020.

In what regards the new offer, after 155,200 sq m of new projects delivered in 2020, for 2021, an area of nearly 256,000 sq m may be delivered in total.

Regarding the retail market, the total stock of modern retail in Bucharest remained at 1,176 million sq m and may increase to 1.2 million sq m until the end of the year.

For the entire year, the retail projects that are to be delivered total around 156,000 sq m, over 148,600 sq m in Q1 2020.

On the industrial market, the total demand for modern industrial and logistical spaces in Romania totaled approximately 262,000 sq m, of which 63 pct (165,000 sq m) was net demand.

The auto industry had the greatest contribution to demand, representing 29 pct of the total (75,000 sq m), while the logistics sector drew nearly 13 pct of demand (33.800 sq m).

New projects, totaling 30,700 sq m, represented under 16 pct of deliveries in Q1 2020.

On the residential market, the new offer rose by 8,300 units in Bucharest and Ilfov, being 23 pct smaller than in the previous quarter, but 33.6 pct larger than over the similar period of last year.

Specialists in real estate believe, in this context, that delaying the increase of the maximum ceiling for the reduced 5 pct VAT for buying a first home from 93,000 euro to 140,000 euro will imbalance the transaction market that fits those price margins, as some buyers may delay their purchases for at least another year.