BREC: Investments in residential and logistics continue at full speed in 2022

Investments in real estate continue at full speed in Romania, the residential market and the logistics segment attracting the largest volume of new investments, according to a Bucharest Real Estate Club (BREC) analysis.

The retail segment is attracting new investments and formats, while investors in office buildings are preparing for the increase of the traffic volume and employees` return employees to offices. In total, according to BREC estimates, the volume of investments attracted by the largest projects under construction or which will start this year, at the level of the entire country, exceeds 1.8 billion euros.

More than 10 large residential projects, with over 500 apartments each are under development this year only in Bucharest. On the office buildings segment, as this year the restrictions that have characterized the last two years are expected to relax and most companies are planning to bring their employees back to the office or turn from “work from home” to various hybrid work formats, in 2022 we will assists new investments in this segment as well. Six new office projects are announced only in Bucharest and they will bring in almost 140 thousand square meters on the market.

“10-12 companies are now looking for more than 10,000 square meters of office space on the market. From our point of view, both today and tomorrow, the local market is very promising,” said Marian Popa, Managing Director of Globalworth Romania at the „Major Investors` Agenda” Conference organized by BUCHAREST REAL ESTATE CLUB.

According to the BREC analysis, in 2022 the mixed-use projects segment (“city in the city” format)  – which offer multiple facilities, will also expand. In the Capital City only, three major such developments are underway and at least 5 more are being added in other cities.

On the logistics segment, at national level, the new deliveries will reach a volume of over 500,000 sqm this year. Also, over 200,000 sqm of modern retail space will be developed, most of the investments being announced in Bucharest and in the large cities in the Western part of the country, but also in secondary and tertiary cities such as Pitesti or Alba Iulia. On the retail segment, investors are preparing new formats and concepts, integrating elements related to sustainability or community.

“We are seeing an increase in traffic in regional shopping centers. Jewelry, cosmetics and sports goods retailers have seen increased sales, given the recent years` context, marked by restrictions,” stated for BREC Geanina Ungureanu, Senior Asset & Leasing, Retail Manager at Immofinanz.

Tatian Diaconu, CEO of Nhood, also said that “the idea of ​​using retail in a useful way with offices, an education or health system actually proves that this is a new solution.”

Omer Susli, owner of Home Lux stores and real estate investor, also announced the completion of the acquisition of the River Plaza shopping center in Ramnicu Valcea from the Sonae Sierra investment fund.

Skanska, a real estate player strongly focused on sustainability, believes that “we would rather bear the rising cost of construction than the cost of doing nothing to protect the environment. We have confirmed through our projects the target of carbon emissions reduction by 50% and for the future we want to reach 70%”, according to the company’s representative, Andrei Ivan.

One of the main industry challenges remains the increase of construction costs and the lack of qualified personnel. Adriana Iftime, Vice President of the Employers’ Association of Construction Companies, stated that 400,000 workers work in Romania, while 700,000 Romanians work on construction sites in Western Europe.

The investors present at the BREC conference highlighted the remaining issue of the lack of transparency in the relations with the authorities and the legislative unpredictability, which endangers the long-term development of the Romanian real estate market.