“Bucharest City Report Q3 2020” is now available

Q3 2020 property investment volume for Romania is estimated at €408 million, a value approximately 68% higher than the one registered in the same period in 2019. For the first nine months of 2020, transactions volume reached €816 million.

Even though expectations for Q3 were not very high, considering the emergence of the second wave of the COVID-19 pandemic, the investment volume was boosted by the closing of one of the largest deals ever signed in Romania, the acquisition of the NEPI Rockcastle’s office portfolio by AFI Europe, a deal worth approximately €307 million, which includes several properties in Bucharest and one in Timisoara, with a total GLA of almost 120,000 m².

Although the road ahead is marked by uncertainty, considering the persistence of the COVID-19 pandemic and the restrictions associated with it, there is a consistent pipeline of deals which could be closed soon and throughout 2021.

Both prime office and retail yields were resilient in Q3, standing at 7%, while prime industrial yields remained at 8%. Prime assets with WAULT (Weighted Average Unexpired Lease Term) significantly longer than the market average can achieve yields below those quoted as prime. The impact of the medical emergency in Romania as well as in the rest of Europe on yields will probably be seen towards the end of the year and especially in 2021. Product quality will make a big difference in terms of achievable yields.

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