Almost 70 percent of the investors active in land transactions intend to move ahead with on-going deals this year, study shows

Real estate investors still show interest for acquisitions of new projects in Romania, even in the context of the Covid-19 epidemic, shows a study conducted by Colliers International. Almost 70 percent of the investors active in the land segment claim that they plan to conclude all or at least some of the transactions already on-going.

Most real estate market players are seeking to better understand the current situation before making investment decisions (64 percent).

Bucharest remains the preferred location for new investments for about 57 percent of respondents while over 25 percent are open to new investment opportunities in regional cities, which could boost the regional real estate market especially as only 5 percent of them currently hold properties outside Bucharest.

“Considering market uncertainties, securities in the transaction process are expected to become even more important and the general opinion is that representations, warranties and insurance conditions will most likely come to be even more tightened. As regards the vendor due-diligence process, there is an almost equally shared opinion between getting tighter, meaning becoming more exhaustive, and remaining unchanged, which might evidence Romanian investment market as a balanced one between sellers and buyers”, declared Anca Merdescu, Associate Director Investment Services at Colliers International.

In the land market, almost 70 percent of the active transaction players intend to progress with all or some of the on-going deals in 2020, with 43 percent of respondents to Colliers International’s study in the land segment expecting to close a transaction in the next 3 months, highlighting the fact that the market is active. Furthermore, the majority of the investors who do not foresee the close of a transaction on the short-term expect to complete a deal by the end of the year. Thus, only 16 percent of the total interviewed do not expect to close any land deal in 2020.

In terms of the evolution of land prices, 44 percent of the investors interviewed expect them to decrease in the near future, while a similar share does not have a clear-cut expectation at the moment. The study also reveals that the market sector the investor is acting in (be it residential, office, retail or mixed use) as well as the position in terms of seller or buyer have very little influence on the current perception of land price evolution.