Research

Bucharest City Report Q3 2022 | JLL Research

The latest data about Romanian real estate market is available

November 30, 2022
Contributors:
  • Alexandru David

Although Romania’s GDP was expected in July to reach a growth rate of 3.5% until the end of the year, this figure was revised in October to 4.6%. However, the projections for 2023 are modest, at 2.8%, according to the latest national prognosis.

At the same time, inflation also kept on rising, from 15.1% in June, to 15.9% in September. At the end of the year, inflation is expected to reach 15.2%. The year’s average inflation is projected at 13.5%.

The unemployment rate slightly decreased since the beginning of 2022, from 5.7% in January, to 5.4% in May, and 5.2%in September, when the number of total unemployed reached 432,700, according to the National Institute of Statistics.

Total investment volumes for Q3 2022 reached approximately €330 million,28% above the previous quarter and 27% over Q3 2021.

We expect investment volumes in 2022 to reach up to €1.2 bln. This would be the largest yearly investment volume recorded since 2007. However, this level is conditioned by the closing of a number of significant deals.

No changes in prime yields were recorded during Q3 2022, thus they remained at 6.75% for offices, 7.25%for retail, and 7.50% for industrial properties.

Gross transactions volume on the office market in Bucharest in Q3 2022 totaled approximately 65,700 m², almost the same as in the previous quarter, and 8% below Q3 2021.

One emerging trend is the preference for higher-quality office space, approximately 80% of the occupied space during Q3 being in A class buildings.

Approximately54,000 m² are expected to be added to the market until the end of 2022, bringing total deliveries for the year to 159,000 m², a decrease of 35% when compared to deliveries in 2021.

Retail sales during Q3 were impacted by surging inflation, limiting consumer demand.

In September 2022, retail sales increased by 3.2% y-o-y, while for the first 9 months of 2022 they have grown by 5.6% compared to 2021, according to the official statistics.

Q3 was an exceptionally good quarter for the Industrial market in Romania, with gross demand reaching 323,700 m², 72% more compared with the previous quarter and 2.5 times over Q3 2021.

During the first 9 months of 2022, a total of 491,500 m² were completed across Romania, double when compared with the same period of 2021.

Thus, at the end of Q3 2022, the modern industrial stock to rent in Romania totalled approximately 6.23 million m².

On the residential market, the level of new units’ transactions marginally decreased in Q3 2022.

The third quarter of 2022 showed a non-linear evolution of the residential transactions. After a modest, seasonal evolution in July, the activity dropped in August, while in September increased again at a significant higher pace when compared to September 2021 and also September 2020.

Overall, the third quarter of the year marked a 5.6% decrease when compared to Q3 2021, but still a spectacular 55% increase whencompared to Q3 2020, when volumes were affected by the pandemic.

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