While some new challenges for Romanian economy have surfaced, the real estate market runs on a slightly different clock than the macro cycle given the time required to develop projects, so 2018 is likely to remain a solid year. Even in case a crisis (of global origins) were to appear, we do not see a potential meltdown of the domestic real estate market thanks to the fact that asset valuations are far from pre-crisis levels, while economic fundamentals also look better than they did back then.
On the industrial market, modern warehouses stock is set to surpass the 4 million sqm mark by end-2018, with the rise in e-commerce capable of generating a healthy demand for storage spaces over the medium term, alongside the steady rise in private consumption.
Retail developers will continue to focus mostly on regional cities, including smaller towns, with a prevalence of retail parks.
This year we expect to see 185,000 sqm in new modern office spaces to be added in Bucharest, to a total of 2.4 million sqm; at the same time, the focus is shifting increasingly more to regional cities.
As the market is maturing, product availability is not an issue anymore, so this year office investment volumes in office alone could top EUR 0.5bn out of a possible total of EUR 1bn.
Land deals will reach volumes similar to 2017’s post-crisis high (EUR 350mn), but as the momentum of the 2016-2017 growth wears off and economic growth normalizes, developers will likely turn a bit more cautious.