Romania, the only big CEE market which has not seen significant yield compression

After a strong year in the investment market, marked by continued appetite from local investors, Romania still has the highest prime office yield of the region, 7%, remaining attractive for local and international capital, according to an analysis by real estate consultancy firm CBRE.

With 74% of the total volume, the Romanian office sector dominated the transactional activity in 2019, followed by retail with 16%, while industrial, hotels and mixed-use projects claimed a combined share of 10%.

“Romania is the only main CEE market, which has not seen significant yield compression. Since 2014, prime office yields have remained stable as have prime rents resulting in capital values that are now much lower than elsewhere offering investors great value for money,” said Gijs Klomp, Head of Investment Properties, CBRE Romania.

The value of transactions on the Romanian real estate market in 2019 was little over EUR 1 billion. Israeli investors were the most dominant with a record deal signed towards the year-end, representing 36% of the total investment volume. Romanian investors were the second most active representing 23% of total volumes and more active than the previous year, followed by South-Africans with a share of 17%.

Regional cities remained appealing to market players, almost doubling their contribution to the total investment volume compared with 2018.

(Photo source: CBRE Romania)