ROMANIA 2010 REAL ESTATE REVIEW MID–YEAR 2010
Accelerating success.
EXECUTIVE SUMMARY recent trends
If we were to say a word to define the first half of 2010, that is May. May reshaped the landscape of the first semester in real estate and not only. It is then when the drastic measures of the government pulled the trigger for turbulent events in the economy and, eventually, in the real estate market. The market saw a strong start in the first quarter – companies showed intentions to relocate to new headquarters, retailers signed for new spaces in shopping centers and on high street, while investors proved an increasing appetite in buying properties. On markets such as industrial and residential the activity was not so intense, but overall the property markets seemed to feel a twitch. Even if the real estate was very responsive to negative economy changes, the outlook is encouraging.
market prognosis
Bearing in mind the revival of the regional markets, Colliers consultants expect a close recovery of the real estate industry. After more than a year of corrections and slow downs, many potential buyers expect prices to reach their minimum towards the end of the year. Thus, we will see an increase in the trading activity on the land market during the second half of the year. Investment activity is expected to intensify, after two years of silence. As yields have dropped in more mature markets from CEE to values close to 7% for prime office properties for instance, we expect Romania to re-enter soon the map of foreign investors looking for properties at good prices. However, there are two dominant factors that could design the real estate market in the near future: on one hand - the negative effects of the uncertainty in the national economy and on the other hand - the positive impact of a more vivid Central European property market.
TABLE OF CONTENTS ROMANIA REAL ESTATE REVIEW | MID-YEAR 2010
ECONOMIC OVERVIEW 5 OFFICE 6 RETAIL 8 INDUSTRIAL 10 LAND 12 INVESTMENT 14 CONSULTING 16 VALUATION 18 BUILDING SURVEYING 20
ECONOMIC OVERVIEW The continued effects of the global crisis compounded by the economic implications of the austerity measures taken by the government had a material impact on Romania’s economic development in the first half of the year. Today, virtually all economists expect a contraction of the economy by the end of 2010, and as much as a 1.5% to 3% decrease in GDP is likely.
The decreasing trend of the reference interest rate that reached 6.25% has been halted by the central bank due to the inflationary pressures caused by the increase in the VAT. The National Bank of Romania maintained a relatively stable foreign exchange rate in the first half of the year, despite pressures on the local currency. The first semester featured positive results in the export and industrial production sectors both of which recorded growth on a year-on-year basis.
In the face of losing control of the fiscal deficit, and the failed attempt to adjust the public pension system, the government announced and swiftly implemented a series of austerity measures. Most important of these were a 25% across-the-board cut in the public sector wages and increase in the Value Added Tax by 5 percentage points from 19% to 24%. The increased revenues to the state treasury and cuts in expenses helped to halt the escalation of the deficit which will likely stay close to the 6.8% target agreed with the IMF by year end.
Not least, there are positive signs on the regional level, where the aggregate output of the economies forming the European Union is expected to grow by 1% this year. Romania, which proved so dependent on the regional economy in the downturn, will benefit of the regional recovery too.
Romania continues to rely on the financial assistance provided by the IMF in lack of strong self governance. The public debt increased steadily in the last five years, and is now expected to surpass 30% by year-end. Much of this debt is short-term, requiring on-going restructuring. High financing costs in the local debt markets means that the state needs to rely on the assistance of institutions like the IMF. This increasing public debt however is a setback for future economic growth. The inflation rate escalated and is estimated to reach 6.6% by the end of the year mostly due to the austerity measures and in particular the VAT increase. However due to the one-off character of these measures the inflation will quickly bounce back next year and likely settle around 4% according to economic forecasts. Employment conditions remain difficult. According to estimates by Focus Economics the unemployment rate is expected at 8.7% by the end of the year and is forecasted to slighty decrease by the end of 2011.
MACROECONOMIC INDICATORS 2007
2008
2009
2010F
2011F
Real GDP (% change)
6.2
7.1
– 7.1
– 1.3
2.1
CPI (%, yoy, eop)
6.6
6.3
4.7
6.6
4.2
– 13.5
– 12.4
– 4.4
– 4.9
– 6
4.1
4.4
7.5
8.7
8.1
Current account balance (% of GDP) Unemployment rate (eop, %)
Sources: FocusEconomics
5 Colliers International Review – Romania 2010 Mid-Year
OFFICE MARKET Demand for office space picked-up its pace in the first half of 2010. However, rents continued their slow decline due to an increasing vacancy rate. SUPPLY The first half of 2010 brought 140,000 sqm of quality office space to the market, 35% less than the first six months of 2009. Thus, the total stock reached 1,300,000 sqm to date. The deliveries were finally correlated with the demand expressed until now in terms of location, and not brought on the market speculatively. Therefore, most of the space was delivered in the semi-central area, followed closely by the CBD, while the periphery accounted for only 10% of the new supply. DEMAND & VACANCY Over 80,000 sqm of space was subject to transactions in the first half of 2010, similar to the demand registered during the entire 2009. It includes renegotiations, relocations, expansions, subleases, and new entries. The year started with an active first quarter that accounted for more than 65% of the total take-up. The austerity measures in the second quarter lead to companies postponing their decisions to commit to leasing new office space. Tenants with leasing contracts expiring this year chose either to renegotiate or to move to another building. These options translated into a net take-up 1 of approximately 65% of the total demand (52,000 sqm). Pre-leases appeared again on the market after no such transaction in 2009, and they reached 20% from the leasing activity in the first 6 months of 2010. 50% of tenants that rented space in the first half of the year preferred the semi-central area as it met their requirements in terms of good accessibility both by car and public transportation at a more affordable rent. The medical sector was the most active type of tenant to prospect the market lately and committed to renting large areas of office space. One key example is Sanador Medical Center that leased an entire 11,000 sqm office building, representing one of the largest transactions since the beginning of 2009. Clinics have been trying to take advantage of the current low rents on the market and opened units within dense office areas, in order to be closer to their corporate clients. 1
The vacancy rate remained stable, at a market average of 20%, after two years of considerable increases. However, quality office buildings located right near a metro station succeeded in maintaining a quite normal vacancy rate of 8%. RENTS Taking into consideration the leasing activity during the first semester, the average rent has decreased slightly, although the prime rental rate remained unchanged. Buildings located close to the metro stations kept their vacancy rate low without compromising the rent. While the semi-central and the peripheral areas are rather homogenous in terms of the rent they command, a tenant is confronted with an unusual phenomenon when looking to lease space within the CBD. For example, although most landlords in Piata Victoriei ask between 18 and 20 EUR/sqm/month for their buildings, one can also find projects that can be rented at 14 EUR/ sqm/month. However, these buildings have short-comings in terms of visibility, exposure, parking ratio and/or usable area per floor. AVERAGE ASKING RENTS (EUR/sqm/month) CBD
Semi-center
Periphery
2009
18 – 20
15 – 18
10 – 15
H1 2010
18 – 20
14 – 16
10 – 13
After negotiations, most tenants obtained a discount of 10% or even 15% of the asking rent especially in buildings with high vacancy. Furthermore, landlords offered incentives such us fit-out allowances (up to 50 EUR/rented sqm), rent free months, break options at 3 years and shorter leasing periods. A shorter contractual period works best for both tenants and landlords. Tenants prefer a reduced term as they feel unsecure regarding the evolution of their business, while landlords prefer it because they believe that the market will recover in 3 years and the rent will restart an ascending trend.
The net take-up represents the space occupied by new requests. In consequence, it does not include renegotiations or relocations.
6 Colliers International Review – Romania 2010 Mid-Year
Contact: maria.florea@colliers.com
Given the low vacancy rate of quality office buildings near metro stations and the scarcity of land plots for future developments, now is the perfect time to lease space at an affordable rent in prime buildings in terms of both technical specifications and accessibility. Maria Florea – senior associate, office agency
However, there are companies (IT&C, pharmaceuticals, and energy) that have not been hit hard by the economic downturn and that are rather confident about the outcome of their business in the future. These companies try to secure space at the current low rental level for as long as possible. FORECAST Until the end of 2010, an additional 160,000 sqm of office space will be delivered on the market. Out of the total space, only 20% is currently leased and therefore we estimate a rising vacancy rate towards the 25% level. Consequently, the rents will go even lower, particularly for buildings with poor access and hence high vacancy. The only buildings which will not face this situation will be the good quality ones located near a metro station. They will maintain the vacancy rate below 10%, keeping the asking rents unchanged.
20% Average vacancy rate The total stock reached 1,300,000 sqm 80,000 sqm take-up 50% of tenants preferred the semi-central areas
For 2011 – 2012, there are more than 500,000 sqm announced for delivery, out of which we estimate that only 20% will actually be brought on the market, as the rest of the projects have not started the construction works yet. The take-up of the second half of 2010 will more or less be at the same level as the first 6 months of the year. There have been negotiations on the market started in the beginning of 2010 that we believe will be closed by the end of the year. OCCUPATIONAL MARKET ACTIVITY & VACANCY 25%
140,000
Take up Vacancy rate
120,000
20%
100,000 15%
80,000 60,000
10%
40,000 5%
20,000
H1 2006
H2 2006
H1 2007
H2 2007
H1 2008
H2 2008
H1 2009
H2 2009
H1 2010
NEW DELIVERIES (SQM, 000) 250
CBD Semi-center Periphery
200 150 100 50
2006
2007
2008
2009
7 Colliers International Review – Romania 2010 Mid-Year
H1 2010
The present report takes into analysis only above 3,000 sqm GLA Class A office buildings.
Contact: maria.florea@colliers.com
RETAIL MARKET The first 4 months of 2010 were marked by a more optimistic atmosphere among retailers due to the slight stabilization of sales (year on year), that translated into a more active leasing market. However the discussions about the government’s austerity measures brought to a halt this surge in activity starting with May, as the consumer confidence and their propensity to spend were affected by the announced wage cuts and increases in taxes.
DEMAND
SUPPLY
Retailers’ choice for new locations was guided by the current performance of the targeted shopping centers. Thus, particularly in the countryside, retailers focused on shopping centers which have already been operating for over 2 years, as the sales volumes are significantly higher in these locations compared to the new shopping centers. This comes to prove that even during the financial crisis, shopping centers follow their natural maturity path.
During the first six months of 2010 we witnessed the delivery of only two new retail projects on the market: Sun Plaza (80,000 sqm) in Bucharest and Atrium (29,500 sqm) in Arad. Thus, by July 2010, the total stock of modern shopping centers in Romania reached a total of 1.32 mn sqm of GLA. This small number of deliveries comes after three record years in terms of shopping center completions, when the modern retail stock increased on average by over 250,000 sqm/year. This phenomenon indicates that the development inertia of the boom years is drying out and the expansion of modern retail stock will significantly slow down. A better situation in terms of new deliveries was seen on the large big box segment, where, despite of the economic crisis, no less than 14 projects were completed in the first half of 2010 as compared to 20 that were delivered throughout 2009. The top positions in terms of expansion speed were held by Kaufland with 7 openings and Dedeman with 3. As developers have tempered their expectations in terms of financial conditions, the large DIY and food retailers are now more able and willing to expand and consolidate their positions on the market. RETAIL STOCK & DELIVERIES (SQM of GLA)
769,000 552,500
Shopping Center Stock New Deliveries H1 2010
Having overcome a difficult 2009 marked by restructurings and reorganizations, retailers showed an increased appetite for expansion in the first half of this year. Consequently, the demand for retail space improved significantly as compared to 2009, with many new lease contracts signed with existing shopping centers in Bucharest and the main cities in countryside (Constanta, Cluj, Timisoara, Iasi).
Although the smaller cities were not at the top of retailers’ priority list, we have nonetheless seen some new entries in such cities during the first half of 2010 from brands like C&A, Takko, New Yorker, Deichmann and others. When considering smaller secondary cities, retailers are mostly interested in those markets with little existing competition where they can be a part of the dominant retail scheme. The reorganization of retail chains and closing down of shops on the non-food segments continued in the first half of the year but at a much slower pace than in 2009. Thus, the overall vacancy at national level increased only slightly from around 12% at the end of 2009 to 15% in June 2010. However, due to the contracts signed by strong brands such as Decathlon, H&M, Inditex or C&A for large retail areas in shopping centers both in Bucharest and around the country (that will become effective by early 2011) the vacancy in the near future will be lower. The group of insolvent retailers has also increased further since the beginning of the year. Nonetheless, the retailers that find themselves in insolvency are becoming more active on the market, showing interest in expanding to new good locations. The expansion plans are indeed part of their reorganization strategy as increased revenues and profitability are essential for exiting the insolvency procedure. Having already reduced their operational costs and having closed down the loss making locations, their only route towards increased profitability is through new locations.
80,000 29,500 Bucharest
Countryside
8 Colliers International Review – Romania 2010 Mid-Year
So far, 2010 has been a quiet year in terms of new entries of international retailers, with only few brands such as Camaieu, Pieces, Brioche Doree and Six launching their first locations in the Romanian shopping centers.
Contact: georgiana.andrei@colliers.com
For the first time in the past 1,5 years we hear the worried question: where will I expand next year? Georgiana Andrei – director, retail agency
The reason for this weak start lies both in the economic situation as well as in the fact that most of the new comers sped up their plans and opened shops in 2009, with the inauguration of AFI Palace. The most notable announcement of this year was the market entry of the fashion brand H&M, which will open its first stores in Bucharest in early 2011. RENTS Flexibility remained the name of the game for developers’ relations with their tenants in 2010. Thus, the renegotiated rents agreed in 2009 were generally kept, and only in few cases, for low performing shopping centers rents were even further decreased. The impact of the crisis on retailers’ activities was also reflected in the increasing delays in rent collection. Prime rents for the well performing shopping centers in Bucharest remained stable, with values between 60 and 80 Euro/ sqm for 100 sqm on the ground floor. In the countryside the prices vary considerably from one shopping center to another, thus making any average values irrelevant. FORECAST The delivery of new shopping centers will remain low in the short term with only three schemes to be delivered in the second half of the year: Gold Plaza mall developed by Futureal in Baia Mare, Belrom’s retail park in Drobeta Turnu Severin, and Cocor store in Bucharest. Although there are still many announced projects that are being actively marketed, the difficult access to financing makes their materialization in the short term highly improbable. Until banks ease their financing conditions and requirements and become more willing to provide new loans, developers will face difficulties in starting the construction of their projects. Big Boxes are expected to continue leading the expansion of modern retail. As big box retailers have maintained their land acquisition plans throughout the crisis period, we are expecting to see even more boxes developed within the next two years all throughout the country, with food retailers leading the trend.
HIGH STREET The high street segment also registered a more intense activity in the first six months of 2010 as compared to 2009. In Bucharest, the higher demand for retail space was felt especially in the secondary arteries of the capital’s main neighborhoods but also in some of the prime high street locations. In an attempt to rotate liquidities faster, general goods producers such as CrisTim, Cosarom and Agricola Bacau intensified their retail activities by expanding their own retail chains. Large expansion plans for the secondary areas were revealed in the first half of 2010 by the convenience store concept Mic.Ro owned by an investment fund. Around 100 Mic.RO locations have already been opened all over the capital and the company is planning to expand in Bucharest to more than 300 units by April 2011. Another retail segment that showed an aggressive expansion strategy in H1 2010 both in Bucharest and the countryside, were the sport bet and gaming cafes, whose growth was accelerated in the beginning of 2010. The main new entry of this segment is BetArena who secured approximately 60 locations throughout the country. On the prime high street we witnessed few entries, although a number of luxury brands are negotiating for locations on Calea Victoriei. Therefore, we expect more store launches on this segment in the second half of the year. An already announced inauguration is the Emporio Armani store to be opened in September 2010. Rents were more stable in the first half of 2010, with only a 10% decrease especially towards the end of the semester. Rents are expected to remain generally stable in the second part of the year, although in certain areas, especially peripheral ones, marked by high existing vacancy, they are expected to decrease slightly.
On the demand side, the quest of large retailers for good opportunities in Bucharest and the large cities will continue in the short term. However as the supply of good locations in well performing shopping centers will flatten out due to limited units available, we expect that such opportunities will become more scarce in 2011. Rents are expected to become more stable in the following period. However, in order to make new developments financially feasible, rents should restart their growing trend in the medium term, from the lows registered this year, especially in the secondary cities.
9 Colliers International Review – Romania 2010 Mid-Year
Contact: georgiana.andrei@colliers.com
INDUSTRIAL MARKET The industrial market witnessed a low activity for the first six months of 2010, both on the supply and on the demand side. SUPPLY The first half of 2010 kept the levels of industrial and warehousing stock unchanged, at approximately 900,000 sqm. In fact, there have not been any new deliveries for twelve months. However, things seem to change towards a positive evolution, as there are currently two projects under construction. The 19,000 sqm pipeline will be delivered by the end of the year, within Millenium Logistic Park and A1 Business Park. Outside the capital, cities like Timisoara and Ploiesti are active in terms of new supply, delivering another 20,000 sqm of quality space on the market. Furthermore, new developers are entering the local market, announcing new projects in Turda and Timisoara. DEMAND AND VACANCY Demand for industrial space increased by 30% when compared to the same period of 2009. Over 40,000 sqm have been leased, out of which 60% in the second quarter. Although more active than the first quarter, the leasing activity in the second one was affected by the Government decisions and by the overall market uncertainty created in the business sector. At the end of the first semester, the vacancy rate reached 16%, registering a slight increase compared to the end of 2009. Moreover, most of the tenants that leased space in the first semester relocated their premises and thus did not create net take up. Out of the total occupational market activity only 30% was driven by new demand. Western Bucharest attracted almost 60% of the total demand in the first semester. This percentage was to be expected as over 85% of the total industrial stock is located near A1 highway. The rest of the space was evenly split between the northern and southern parts of the city. Regarding the size of an eligible industrial project, tenants prefer large scale projects: half of them leased space in projects with over 50,000 sqm GLA, all located close to A1 highway. Tenants prefer such projects as they have the possibility to extend their space in the future. They also feel the reassurance given by an experienced landlord.
In the countryside, demand driven by the automotive sector regained ground, especially in Pitesti and Craiova areas. Retail operators and industry related companies started to take interest in industrial and warehousing space within competitive projects outside Bucharest as well. Choosing to be present in cities like Ploiesti, Timisoara and Cluj Napoca is part of their strategy to either be closer to their points of sales or benefit from cheaper labor force. RENTS Asking rent levels decreased only slightly throughout the period, but some of the landlords became more flexible, due to the increased vacancy rate. Thus, compared to the end of 2009, rents have dropped moderately, around 2 – 5%, especially for spaces smaller than 10,000 sqm. Large spaces were difficult to find, as, although the vacancy hit a record high, the available space was scattered in rather small areas in almost all the projects on the market.
INDUSTRIAL SPACE RENTS (EUR/sqm/month) Area (sqm)
2007
2008
2009
H1 2010
< 3,000
4.7 – 5.0
5.0 – 5.5
4.3 – 4.7
4.2 – 4.5
3,000 – 10,000
4.2 – 4.7
4.5 – 4.8
4.1 – 4.3
4.0 – 4.2
> 10,000
3.7 – 4.1
4.4 – 4.5
4.0 – 4.2
4.0 – 4.2
TOTAL STOCK VS. VACANCY RATE 1,000,000
18%
800,000
14%
16%
Stock Vacancy rate
12%
600,000
10% 8%
400,000
6% 4%
200,000
2%
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010
10 Colliers International Review – Romania 2010 Mid-Year
Contact: viorel.opait@colliers.com
By the beginning of 2011, we will witness relocations of current tenants to pre-leased or self-owned spaces. Thus, the potential 40,000 sqm of freed-up space will increase the vacancy towards 20%. Viorel Opait – director, industrial agency
16%
FORECAST The next six months will bring on the market another 19,000 sqm of quality space, raising the total industrial stock to 920,000 sqm, by the end of 2010. For 2011, there are 55,000 sqm announced for delivery, out of which 75% in the western outskirts. The actual delivery of these projects is highly dependable on the future demand though.
Vacancy rate No new deliveries
By the beginning of 2011, we estimate that the vacancy rate will increase to approximately 20%. The estimation is based on three major aspects:
30% increase in take-up
»» New spaces to be delivered, out of which only 35% have been pre-leased until now »» Several major tenants will free up leased space to move in owned premises »» Low leasing rate, as a result of the market’s pulse, which is very sensitive to the macroeconomic events: layoffs within the public sector, the VAT increase which translates into a smaller consumption, Tax Code changes. All these measures have a negative impact on companies as they become reluctant to developing or maintaining their operations in Romania. Regarding the rent levels, we do not expect any significant change, as, in spite of the rising vacancy rate, landlords are still keen on maintaining the rent level up so as not to decrease the value of their project. Nonetheless, owners of projects with high vacancy will be more willing to offer incentives such as rent free months and reduced leasing periods. We estimate a low activity at the country level as well for the next 6 months at least, as demand came until the economic downturn mostly from logistic operators. They put their stakes on the consumption increase. Now that the consumption is going down, so do their expansion plans.
DELIVERIES VS. NET ABSORPTION 200,000
TAKE-UP BY SECTOR
New supply Net absorption
160,000
18%
14%
120,000
Automotive 14%
Media Other Production
80,000
27%
40,000
11% 6%
10%
Construction Industry Logistics
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010
11 Colliers International Review – Romania 2010 Mid-Year
Contact: viorel.opait@colliers.com
LAND MARKET In the first semester of 2010, the revival of the market continued, as the appetite for land acquisitions grew, although at a slow pace. Given the volume of transactions initiated and currently in advanced stages of negotiation, we expect the second half of the year to be more active from a transactional perspective. DEMAND Overall, the value and number of transactions in the first 6 months of 2010 exceeded those recorded during the same period of 2009. Unlike the first half of last year, when the usual buyers did not even take into consideration land plot acquisitions, now, the emphasis is on actively looking for good plots, at affordable rates. The number of transactions closed in the first 6 months was however reduced and also there were only low value deals, not exceeding 10 million EUR. Nevertheless, there was interest for the land market, the demand being mainly driven by several players: I. Developers of retail parks and big box retailers. Similar to last year, DIY operators, discounters, and hypermarkets continued to be active on the market. After the 2004 – 2007 period, when hypermarkets have undertaken aggressive development campaigns, followed by a hold stage between 2008 and 2009, starting with the end of 2009 and the beginning of 2010, they reactivated their expansion plans. Retailers are looking for land plots both in Bucharest and in major cities, although peripheral locations have not been taken into consideration. Sites located close to densely populated areas attracted retailers, trying to get ahead of the competition. In addition, some of the developers that planned to build mixed use projects (residential, office, retail) changed their strategy towards retail parks, trying to attract active retailers as anchor tenants. Their locations are usually former factory sites in good semi-central locations, densely populated and highly attractive to big box retailers.
III. Companies or individuals, looking to relocate in their own future premises. The changes that occurred on the land and construction markets (price drops, availability of sites) made companies to consider relocating from leased office or industrial buildings to owned premises. Regarding the individuals, they were looking for small land plots for their own residential needs, both within Bucharest, in central locations, and near Bucharest, within well-known residential neighborhoods. For instance, one could find available land in areas such as Sisesti, Baneasa, Pipera at prices commanded by owners in Corbeanca, Ciolpani and Snagov in the boom years. Unlike the real estate market growth period, investors looking for properties in downtown exclusive locations were not very active. Considering the resources' availability, they were extremely cautious, opportunistic and very sensitive to any negative sign regarding the financial markets or global economy overall (the crisis in Greece, announcements of wage reductions and increases in taxation level, stock exchange drops etc.). SUPPLY Unlike past years, when good available land plots were difficult to find, now the land supply became broader. Although many landowners are trying to cash in on some of their properties, distressed land plots continue to be very scarce on the market. Moreover, banks started land auctions for good plots also, but very few have been traded, because the asking price was still considered high. In such cases, banks accepted only a 25% discount of the financed amount, on the second auction.
II. New demand: developers / investors looking for residential land plots suited for “Prima Casa” program. In this case, the focus was on small plots (1,500 to 10,000 sqm), for small scale projects (possibly one block of flats). The influence of land had to be below 100 EUR / sqm of built area in semicentral areas and less than 200 – 250 EUR per sqm in central locations in order for buyers to go ahead with the transaction.
12 Colliers International Review – Romania 2010 Mid-Year
Contact: sinziana.oprea@colliers.com
The first semester of 2010 brought positive development on the land market. Many of the potential buyers found that land prices are low enough for feasible real estate projects, which led to advanced negotiations and even transactions concluded. We expect an even more intense transactional activity during the second part of the year. Sinziana Oprea – associate, land agency
PRICES Considering the cautious attitude of investors/potential buyers, driven by the negative signals from the economy and uncertainty about its evolution, prices continued their downward trend. Some have found that prices were low enough; others still expect the price level to reach its minimum towards the end 2010 or early 2011.
20 – 30% Average drop in prices Pricing levels were similar to 2005 – 2006
In these conditions, the transactions were concluded at prices on average 20 – 30% lower than the same period last year, pricing levels similar to those of 2005 – 2006. FORECAST In the first half of 2010, investors have tackled the market, searched for the most appropriate land for their needs, and some of them are currently engaged in negotiations close to completion. Thus, we anticipate an increase of the trading activity in the second half of the year, when several significant transactions could be closed.
Demand is driven by end users or developers having already secured the anchor tenants.
However, we do not expect a stabilization of prices, because the uncertainty concerning the economy still exists. Furthermore, the uncertainty regarding the capitalization of various finalized real estate properties (apartments, office spaces, commercial or industrial) makes land plot acquisitions even riskier. Thus, demand will still be driven by end users or developers / investors who have already secured an anchor tenant. Investment and development activities for speculative purposes will be rare and only at very discounted prices.
AVERAGE ASKING PRICE FOR LAND IN BUCHAREST (EUR/sqm) Area
Sub-area
Price
Central
Aviatorilor, Dorobanti, Romana, Universitate, Unirii
1,000 – 2,500
Semi-central
Baneasa, Crangasi, Progresului, Vacaresti, Mihai Bravu, Colentina
350 – 700
Peripheral
Sisesti, Pipera, Ghencea, Berceni, Pantelimon
150 – 400
13 Colliers International Review – Romania 2010 Mid-Year
Contact: sinziana.oprea@colliers.com
INVESTMENT MARKET Investment activity increased in the first half of 2010, estimated at circa EUR 300 million in total volume. With one exception, most deals have been atypical however, involving cross-border acquisitions, intra-group settlements and nominal sum trades.
Israeli developer Globe Trade Center (GTC) increased its participation in City Gate, a 44,000 sqm prime office building in Bucharest, by 15% for circa EUR 10 million. Currently the project is owned in a 60% – 40% split between GTC and Bluehouse Capital.
TRANSACTIONS
Austrian Immoeast acquired 85% in Polus Center Constanta for EUR 1 plus circa EUR 40 million debt from the developer TriGranit. The shopping center is still under construction and is estimated to be completed in 2011. The transaction represents the closing of a deal signed in 2007 however.
In the first quarter of the year, New Europe Property Investments (NEPI) acquired IRIS Park Pitesti – a retail warehouse anchored by an Auchan hypermarket and a Bricostore Do-It-Yourself scheme – from developer Avrig 35. The reported transaction value was EUR 21 million. Part of the same transaction was NEPI’s option to purchase the gallery of the project in a subsequent time. The largest trade of the first semester has been part of a cross-border acquisition whereby CA Immo was the winning bidder on the Europolis portfolio, the real eastate investment arm of Volksbank. The Romanian assets of the portfolio included the following yielding properties: Europolis Industrial Park, located in Bucharest’s main industrial cluster, the CBD located office scheme Europe House and Riverplace, a new office scheme located in the center-west of Bucharest. The market value of the income producing assets exceeds EUR 200 million. In addition the portfolio subject to the trade included several development projects. The first semester also recorded the first notable distressed sale on the market. Tiago Oradea, a nearly finalized but vacant shopping center on the fringes of Oradea, that has been on hold for over a year, has been foreclosed by lender UniCredit. Baneasa Investments, owner of Baneasa Shopping City, acquired the scheme via a tender process at a price of EUR 30.5 million. In addition to the above, the period recorded a number of intra group settlements.
PLAYERS AND PRICES Actively looking funds have mostly a value-add and opportunistic profile, while economic conditions keep other investors at bay or in stand-by. Nevertheless, the market continues to feature a contracting yield gap as investor expectations adjusted from 10%+ last year to 9%+ for non-institutional but good quality assets at the moment. The less-than-core sector of the market was more a point of reference in the last period as investors found it more difficult to meet their investment return targets through dry investments as owners of core properties have held ground. Thus investor interest started to broaden from Bucharest office stock to other sectors and cities, as well as to joint ventures and development pipeline. Lacking liquidity in the market, it is difficult to provide accurate indications on market pricing. Colliers International sees prime office yields in a range between 8.25% to 8.75% and a lag of 0.5% between prime office and prime retail, and even higher between prime retail and prime industrial.
TRANSACTION VOLUME (MILLION EUR) 1,500
NEPI exercised an option to sell back a 6,700 sqm office building in Constanta which was part of a larger portfolio purchase from Avrig 35 in 2008. The value of the asset was estimated at cca. EUR 6 million. Carpathian Plc disposed of its interests in Atrium Shopping Centers Arad to its joint venture partner for a nominal sum. Atrium Centers subsequently split the project with Arcadom, the constructor part of TriGranit group. The transaction also involved a development site centrally located in Cluj. Carpathian Plc disposed of these assets as it was not willing to continue to finance the project bearing material debt obligations.
14 Colliers International Review – Romania 2010 Mid-Year
950 850
350
300
300 100
2004
2005
2006
2007
2008
2009
H1 2010
Contact: blake.horsley@colliers.com
We are starting to see the pricing gap close particularly in the office and retail sectors. The deadlock on deals the Romanian market has seen for the past few years will almost certainly be broken in the next six months. Blake Horsley – director, investment services
FORECAST The closing of the pricing gap will continue as motivation to close deals for both vendors and purchasers increases. Vendors that feel slowly increasing bank pressure must readjust their expectations, however for quality and well performing products we must note that there continues to be very few signs of such pressure. Buyers too have become somewhat more optimistic in their rental and exit assumptions, which in turn are allowing them to become slightly more aggressive in pricing. Several investors are considering targeting prime office buildings in Bucharest. The rationale behind this is that several CEE markets such as Warsaw and Prague witness continued yield compression and investors are starting to see a spread between the CEE markets that justifies taking on risk in Romania.
300 Mil. EUR Total value of closed transactions CA Immo bought Europolis portfolio The yield gap is slowly closing
In addition opportunity buyers that note the lack of core funds’ presence feel this may be an appropriate time to invests in and hold prime buildings for a short term (2 – 3 years) and then exit to core funds as they re-enter the market. In addition to the office market, demand for big box retail will remain stronger than other sectors. The majority of investors remain cautious of shopping centres as they wait to see the full effect of the austerity measures on retail sales which impact the rents retailers can sustain. For vendors willing to price their projects off ‘sustainable rents’ there are several active buyers and we may see one or two retail transactions close towards the end of the year. Investment demand for industrial property looks to continue its tracking of the retail market following the economic measures. The yield spread between vendors and purchasers expectations appears to remain at its widest in the industrial sector. As a result the second semester is likely to continue to see limited investor activity and few or no transactions closed over EUR 10 million.
PRIME YIELDS Sector Office
8.25% – 8.75%
Retail
8.75% – 9.25%
Industrial
9.75% – 10.25%
15 Colliers International Review – Romania 2010 Mid-Year
Contact: blake.horsley@colliers.com
CONSULTING Residential Market
The balance at the end of the first semester shows a W-shaped recession occurring on the residential market. At the end of June 2008, the market was impacted by the financial crisis; it emerged from this shock with a short period of growth in the second half of 2009, only to fall back into recession by the end of the first semester of 2010 because of the crisis felt at the local economic level. SUPPLY After over a year of market inactivity in terms of newly launched projects, the first semester of 2010 brought the first large scale project since the start of the crisis. At the end of June 2010, the residential market in Bucharest had an accumulated supply estimated at around 8,000 unsold units, out of which 5,400 apartments were available for sale directly from developers. Most developers kept their delivery promises and around 2,500 units were finished during the first semester, more than 80% of 3,000 previously announced. Hence, the stock of delivered units in large scale projects reached 13,500 units at the end of June 2010, an increase of 23% compared to the end of 2009.
DEMAND The financial crisis revealed the real value and the actual dimension of the local residential market. After a calm evolution during 2009, the market’s revival was expected for 2010. Instead, the activity during the first semester of 2010 materialized into an extended recession. The first two months of the year witnessed no changes compared to last year. Initial signs of improvement were felt during March and April but they were canceled starting with the middle of May, after the government’s announcements regarding the new policies. The sales volume in the analyzed projects totaled approx. 600 units during the first six months of 2010. Demand was driven only by end-users, as investors are still reluctant to invest in the capital’s residential market, due to oversupply and lack of financial gains. Even though Prima Casa program was still supported by the government (Prima Casa II was implemented with few changes), it did not register the estimated performance, especially during May and June. The effects of the macro-economic situation and the uncertain future perspectives were the main causes for the poor performance of the market during these months.
As demand did not keep the pace with deliveries during the last 18 – 24 months, the stock of delivered but unsold apartments increased to 3,700 apartments at the end of June 2010 from 2,500 units at the end of last year. Note: The analysis refers to the residential projects with over 200 units (in total), located in Bucharest and neighboring areas (Pipera, Prelungirea Ghencea). It includes only developments that offer units for sale directly from developers. Thus, 37 projects were taken into consideration for this analysis.
Dividing the supply by categories of target clientele, we concluded that the demand materialized mainly in projects targeting the low income population (around 77% of the total sales in the first half of 2010), while the middle class segment had 16% of the take up. Following a similar trend to that of last year, the sales registered in the first semester were closed by those with an urgent need for an apartment, who could secure a good deal or wanted to take advantage of the conditions offered by ‘Prima Casa’ program.
DELIVERIES AND STOCK EVOLUTION – NEW APARTMENTS
SALES EVOLUTION
Number of units
Number of units 16,400 15,900
Deliveries Stock
785
11,000 600 4,900
6,100
4,900
600 515
3,300 1,600 1,600 500 2007
2008
2009
2010F
16 Colliers International Review – Romania 2010 Mid-Year
2011F
H2 2008
H1 2009
H2 2009
H1 2010
Contact: stefania.baldovinescu@colliers.com
More than ever, in an oversupplied market, developers must differentiate from the competition through a flexible approach. Thus, they can attract more clients by repartitioning apartments according to the end-users’ requirements and offering financial incentives as well as convenient methods of payment. Stefania Baldovinescu – director, consulting services
PRICES
FORECAST
Developers further decreased the asking prices as a consequence of the low sales levels. Therefore, the average price per built sqm dropped by 10% from 1,300 EUR/sqm at the end of December 2009 to 1,170 EUR/sqm (VAT not included) at the end of June 2010. Compared to the market’s peak recorded during the first semester of 2008, the average price had a total decrease of 28% (over a 24 months period).
Taking into consideration the evolution of the residential market correlated with that of the economy, we do not predict a more intense activity on the short term (the next 6 – 12 months). Therefore, we estimate a further slight decrease of both sales and prices because of the macroeconomic trends and the government policies implemented at the end of the first semester (salary decreases for the administrative personnel, VAT increase as well as other changes in the new Fiscal Code).
However, taking into account the appreciation of the EUR versus RON (17% from June 2008 to June 2010), the price correction in the national currency is not as high as in Euro. As developers have been quoting their prices in EUR, the downward price correction was partially consumed by the depreciation of the local currency.
However, the forecast of the residential market will be differentiated based on the target clientele of each market segment. We predict that the low and middle income projects will continue to attract demand, mainly due to their price range as well as the 5% VAT (where applicable); while the higher end projects will have to adjust their asking prices more drastically.
The price breakdown by segments of target clientele reveals an average price close to 1,000 EUR per built sqm for low income projects and slightly above the market average for middle developments. The projects qualified as upper middle have a higher average (1,830 EUR/sqm), but they do not impact the market average significantly because of their poor representation in the supply.
PRICE EVOLUTION EUR/built sqm, without VAT 1,630
1,600
1,530 1,350
1,420
1,400
1,300 1,170
1,150
H2 2005
H2 2006
H1 2007
H2 2007
H1 2008
H2 2008
H1 2009
H2 2009
H1 2010
AVERAGE PRICE PER TYPE OF PROJECT EUR/built sqm, without VAT 1,830 1,300
1,170
980
low income projects
middle income projects
market average
ESTIMATED TRENDS Unit Price (VAT not included)
Demand and Price Evolution
Why?
Under 70,000 EUR
Decrease
They qualify for ‘Prima Casa’ program
Between 70,000 and 90,000 EUR
Decrease
They still have 5% VAT
Over 90,000 EUR
Sharp Decrease
VAT increase from 19% to 24%
The VAT change from 19% to 24% generated an artificial price increase of approx. 4%. We believe that the existing clients on this market segment will not pay higher prices, as they have actually seen price decreases during the last 18 months. Thus, we believe that developers will have to make a downward correction in order to balance the VAT increase. Furthermore, we estimate that a higher price decrease will be required by the market conditions, given the end-users’ poor demand for this segment. To conclude, it is our opinion that on the short term, the residential segment will see lower transaction volumes, while prices will continue their downward trend, but at a slower pace. We estimate that transactions will to pick up 3–4 quarters after the start of the economic recovery, when consumers regain their confidence in the macro economic context as well as the residential market.
upper middle projects
17 Colliers International Review – Romania 2010 Mid-Year
Contact: stefania.baldovinescu@colliers.com
VALUATION MARKET Over the last 4 – 6 years, both income producing properties and land plots have suffered significant changes in market values. The retail market had the most intense fluctuations in the segment of the income producing properties, while the land market registered the most significant corrections. RETAIL MARKET Over the last few years, the shopping centers’ market value has known the most significant fluctuations on the Romanian real estate income producing market. Thus, between 2004 – the year of the first shopping centre transaction on the market in Bucharest, and 2006 – the debut of the Romanian real estate boom, the value of a sqm in these properties has tripled, whilst in 2009 the international financial crisis brought values to a mere 25% over those of 2004. The market peak for first class shopping centers was reached in 2007. In 2006 investors were willing to pay 3,000 EUR/sqm in a premium property and by the end of 2007 this amount reached 4,000 and even 4,500 EUR/sqm. The increase in market values was purely speculative, mainly due to the growing interest of investment funds for Romanian properties, which reduced yields to 6.5% – 6.75%, and were not owed to a rise in average rents. During 2007 – the busiest year for the Romanian real estate market – as much as 50% of the EUR 1.5 billion invested properties went towards the shopping centers segment. Transactions were mainly «forward – purchase» type due to the high rate of occupancy through pre-lease agreements and decisions were based on short term performance rather than long term sustainability. Even though Romania’s accession to NATO and the EU led to an increase in investments, real estate market growth was not supported by economic sustainability, the country still registering a budget deficit. These aspects corroborated with a major infusion of capital from the banks led to a speculative real estate market. Towards the end of 2007 and the beginning of 2008 the market was starting to register the first declining values for shopping centers, by 10 – 12%. The financial crisis first effects were doubled by an exceeding offer of retail area in projects that were in an early stage of development. In Bucharest, the retail stock in completed projects was 80% larger in 2008 compared to 2006, while in other major cities this growth reached 300%.
18 Colliers International Review – Romania 2010 Mid-Year
As a consequence, 2009 saw a decrease in rents of 15 – 20% (with Bucharest still 30% above the rest of the important cities in Romania). Vacancy rates started growing from 1 – 5% to 10% and even more in over supplied cities. Thus the risk associated with this kind of investment products started to grow, yields reaching 9.5% in 2009. This phenomenon was also encountered on other international markets where the capitalization rate grew by 4 – 5%. The rising yields and vacancy rates, together with the decreasing rents, determined by now a decline in values up to 50 – 55% compared to the peak. The value per sqm in a prime shopping center reached 2,500 EUR in Bucharest and 1,200 – 1,500 EUR in the rest of the country. The unstable economic environment, as well as the lack of confidence of both buyers and sellers made transactions hard to materialize. Even though 2010 has brought a slight increase in interest, the lack of institutionalized financing still blocks the market. Starting with 2008, due to the lack of activity on the market, values are mainly analysis tools, not necessarily indicators of the market. However the price is determined by the balance between supply and demand, and there has always been a constant demand for premium shopping centers on emerging markets.
INCOME PRODUCING PROPERTIES – IMPORTANT ASPECTS »» The valuation process must consist of a thorough analysis regarding all the aspects that impact upon the market value and their sustainability on a long term basis. »» The direct capitalization of the NOI must be replaced by a medium and long term cash flow analysis including an exit value in the future. »» The yield is replaced by the more relevant IRR (Internal Rare of Return) of the investors’ expectations. »» The discount rate of the future income reflects the current real estate market risk. »» An analysis of the project under stable market conditions is compulsory.
Contact: raluca.buciuc@colliers.com
An analysis conducted by Colliers across all segments of income producing properties, revealed the market values of the shopping centers registered the most important variations; all key factors influencing property value were impacted: rents, vacancy rates and exit yields. Raluca Buciuc – associate director, valuation & advisory services
LAND MARKET The Romanian land market has proven to be the most volatile real estate segment over the years. The spectacular evolution of the market values in the booming period and the notable decline in prices over the last two years was generated mostly by the opportunistic feature of the market. This determined a wide gap between landlords’ and buyers’ expectations. The above gap led to a blockage of the market towards the end of 2008 and the entire 2009, gap that has only recently started to clear. While land in the central and semi-central areas of Bucharest had a relatively constant positive evolution in the boom period, properties at the periphery (within the city ring road) registered the highest growth in 2007, of more than 60% on average. The drop in values has been dramatic and started at the middle of 2008. Asking price for land in the city center and semi central areas is currently below their market value in 2006, and reached 2006 values for properties located in the peripheral areas. Current prices are nevertheless only a starting point in the negotiation process, a further drop being expected for closing a transaction. As mentioned above, location of the land plots has had a main influence on the asking price. In Bucharest, for instance, the most affected land plots have been those situated at the outskirts of the city, whilst a lower decrease, though significant, as well, has been registered within city limits. This is due to the fact that on the one hand investors are still looking for land plots in prime locations, and on the other, there is a surplus of offers and few foreseeable plans for future developments in the outskirts.
The price fluctuations have also required a change in valuation methodology. The lack of transactions in the land market, and therefore no guideline to the market value of a plot, has made the valuation process very difficult. Up to 2008, the residual technique was used to estimate the potential of a property and which in many cases could outcome several times its market value. This permitted the investors to obtain larger loans based on the forecasts of a growing market, which made prices soar in 2007 and at the beginning of 2008. Today, the banks have cautious policies that entail valuations using the market approach and we consider that the residual technique should be used only as a confirmation instrument of the results obtained through the market approach.
LAND VALUATION METHODOLOGY – IMPORTANT ASPECTS »» A more intricate analysis of the offers on sale is necessary in order to establish the exchange price between a willing seller and a determined buyer. This means that an appraiser has to follow carefully the dynamics of an offer for a comparable property in order to estimate the potential transaction price. »» The residual technique is currently used in order to analyze the potential on the market of the analyzed property and thus to confirm its market value.
The steep diminishing asking prices, once the financial crisis started to impact upon the Romanian real estate market, have been directly influenced by the reduced power of the end users to absorb the developed projects and therefore the attractiveness of future successful developments on the sites lost considerable ground. Another important reason for the plunging prices is the banks reticence in financing real estate developments and their absolute refusal to finance land acquisitions. The previously liberal funding policies have been replaced by very strict rules.
19 Colliers International Review – Romania 2010 Mid-Year
Contact: raluca.buciuc@colliers.com
BUILDING SURVEYING Following the down trend market evolution during the last two years, the new development prospects have been facing many challenges related to the real estate field. Out of these, the current financing policy of the banks and the construction costs optimization seem to be two of the most discussed subjects. FINANCING FOR REAL ESTATE IN 2010 Colliers International has been conducted a research through the main financing banks in order to offer a better understanding of the financing policy during 2010. For the first half of the year, extremely few projects received financing, although more than 50 developers applied for a loan solution. The main reasons for not qualifying were both the restrictive conditions imposed by the banks as well as the developers’ expectations to access similar conditions as previous to the crisis years. The imposed equity vary between 50% and 80% from the total value of constructions costs and the requested preleased ratio exceeds 70% – 80%, some of the banks preferring this percentage to be related to the value of the debt, not to the surface. Still, for good conditions of developments (especially into the country side, where demand still exists for office buildings, for an experimented developer, with financial performance) all these conditions can partly be negotiated. The market risk is also reflected into high interest margins (between 4% to 6% over Euribor) as compared to 1 – 2% prior to the financial crisis as well as into affinity for small projects between 3 to 10 million Euros. Following our analysis, although expected to see an increase in prospecting the retail developers, such as Food, Do It Yourself and Discount Concepts, we have surprisingly noticed a similar appetite for all kind of projects, considering office buildings, retail developments, hotels as well as residential. Considering the type of financed business, a special attention has also been offered to the Health & Care sector. An increased volume of refinancing requests has been registered for distressed or close to distressed projects, possible demand being expected mainly for loans where land exposures have already been financed for a certain development.
20 Colliers International Review – Romania 2010 Mid-Year
As each Bank currently considers its own specific policy, we have noticed a low appetite for syndications market. Few enquiries were about cofinancing such projects together with financing granted through European Funds. Under these conditions, it is unlikely that an upper trend in real estate financing will shift in the second part of 2010. Still, considering the large number of projects which might come closer to the requested conditions as well as the banks’ acceptance and adaption to the market conditions, we expect a positive direction starting with first part of 2011. CONSTRUCTION COSTS ANALYSIS – HARD COSTS Besides the strict financing conditions, the construction market is also facing several challenges. One of the most important issues for a developer appears to be the value engineering of the construction costs in order to align the poor demand to the profitability of the business. The construction cost analysis has been an important step during the development process and can be an important guarantee for the successful completion of the project even in these market conditions. An accurate estimation of the construction budget since the beginning as well as a continuous reporting of the actual costs as compared to the original budget can facilitate the detection of any potential cost overruns. If this identification is performed in due time, the developer’s team can react and apply corrective measures. Out of the total project costs, the accurate estimation of construction costs (hard costs) is essential. Usually, the previous experience of a developer through the real estate market practice can offer substantial information for these estimations. However, the hard cost on a “per square meter basis” for real estate developments can dramatically vary based on the destination of the space, chosen design solution, finishing and installations’ specification, site conditions or local regulations. During the auspicious period 2006 – 2008, the hard costs for office developments varied between 650 – 1,000 EUR/sqm. If an average value/ sqm was around 850 EUR/sqm by that time, we noticed smaller costs (650 – 700 EUR/sqm) for developments started in 2006 and higher costs (900 – 1,000 EUR) for the green buildings commenced during 2008. Even though no major office project started the development during 2009 or 2010, we can estimate that the hard cost/sqm for such projects decreased with 20%, and can now reach a level of 700 EUR/sqm.
Contact: raluca.laudoniu@colliers.com
Following the down trend market evolution during the last two years, the new development prospects have been facing many challenges related to the real estate field. Out of these, the current financing policy of the banks and the construction costs optimization seem to be two of the most discussed subjects. Raluca Laudoniu – director, building surveying services
The cost/sqm noticed for the retail projects (referring mainly to shopping centers) was smaller as compared to the office developments. However, during 2006 – 2008, the range was large: 600 – 900 EUR/sqm, due to various reasons: the finishing’s quality, the chosen installations solutions, or even the developer’s strategy. When referring to the developer’s strategy, we relate to those situations where the developer does not employ a main contractor for the construction works, but it hires several construction companies and self coordinates them in attempting of minimizing the costs. For a complete understanding on how the construction costs varied since the last two years, we should analyze the completed projects instead of estimated budgets. Not so many commercial centers have been delivered though on the market in the last years, however, we estimate that an average hard cost/sqm for the projects started during 2006 – 2008 was 750 EUR/sqm. Considering that the costs of the construction materials decreased in the last two years, we estimate that the retail projects can start this year with construction costs/sqm of 600 EUR.
CONSTRUCTION COSTS EVOLUTION
As well as the other segments, the industrial market reached maximum construction costs in 2008 (approximately 480 EUR/ sqm), and we estimate that an average hard cost/sqm for the period 2006 – 2008 would have been 450 EUR/sqm. Depending on the specific requests of the tenants (the office space area included in the warehouse, or the quality and the finishing of this office space), the construction costs were higher or smaller. A correct price for the warehouses built in 2010 (including office spaces) would be 350 EUR/sqm, less with 20% than in previous years.
AVERAGE CONSTRUCTION COSTS (EUR/sqm)
1200
2006–2008
Office Retail
1000 Hard Costs - EUR/sqm
Looking at the residential projects developed during 2006 – 2008, we notice even a larger discrepancy between the boundaries: 400 – 900 EUR/sqm. Indeed, due to different solutions chosen for finishing, installations or even architecture, the construction costs varied from 400 – 500 EUR/sqm for poor quality projects, to 550 – 650 EUR/ sqm for good projects or even 700 – 900 EUR/sqm for the premium projects. We can say that the average construction cost/sqm for the 2006 – 2008’s residential developments was 550 EUR/sqm, while the current cost would be with 20% smaller, at 450 EUR/sqm.
Residential Industrial
800 600
2009–2010
Office
850
700
Retail
750
600
Residential
550
450
Industrial
450
350
20% decrease
400 200 2006
2007 2008 Construction Year
2009
2010
21 Colliers International Review – Romania 2010 Mid-Year
Contact: raluca.laudoniu@colliers.com
Floreasca Business Park 169A Calea Floreasca, Building A, 7th floor Bucharest 1, 014459, Romania Phone: +4021 319 77 77 Fax: +4021 319 77 78 Web: www.colliers.com
This publication is the copyrighted property of Colliers International and/or its licensor(s). All rights reserved. This report and other research materials may be found on our website at www.colliers.com. Questions related to information herein should be directed to the Research Department. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, express or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.