Romanian real estate market attracts Asian investors as part of the maturing process, says C&W Echinox

The local real estate market has begun to attract the attention of major Asian investors, as groups from China and South Korea are exploring the potential to invest directly in the primary commercial markets. It is feasible that the first transaction could occur by the end of this year, according to Cushman & Wakefield Echinox consultants.

The local market is currently undergoing a maturing process, which also involves the diversification of investment capital, and Asian investors, who have made major acquisitions in Western Europe and Poland, are expanding their areas of ​​interest to the other countries in the region.

“South African investors have been the most active buyers in the local real estate market for the past five years, several groups choosing Romania as a ‘launch pad’ with the purpose of building regional portfolios,” says Tim Wilkinson, Partner, Capital Markets, Cushman & Wakefield Echinox. “In recent years, we have seen a diversification of the investment capital via the entry of new players from the United States, Lebanon, the Czech Republic and Belgium, a process that we consider will continue with the first acquisitions by Asian investors attracted by quality projects, blue-chip tenants and by yields which are over 200 basis points higher than those from Central Europe.”

Cushman & Wakefield data shows that Asian investors (from Malaysia, South Korea, Singapore, Philippines) have made acquisitions of over 2.8 billion Euro in Poland over the past three years (2016-2018), having a market share of over 16 percent, while significant transactions have been signed in the Czech Republic and Hungary last year by Shinhan Investment from South Korea and by Mapletree from Singapore, as the share of Asian investors is expected to grow in these markets as well.

On the local market, real estate transactions with a cumulative value of about 957 million Euro were closed in 2018, the largest acquisitions being made by Dedeman, Sonae Sierra, Lion’s Head Investments and MAS Real Estate, in partnership with Prime Kapital.