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Property investment in Romania seen over 1.2 bln euro in 2019 - JLL

Property investment in Romania seen over 1.2 bln euro in 2019  - JLL Cluj-Napoca, Romania

BUCHAREST (Romania), August 19 (SeeNews) - The volume of property investments in Romania rose 64% on the year to 338 million euro ($375 million) in the first half of 2019 and is expected to exceed 1.2 billion euro for the full-year period, property and investment management services provider Jones Lang LaSalle (JLL) said on Monday.

While the number of transactions increased, the average deal size decreased, standing at approximately 25 million euro, JLL said in its CEE investment market report for the first half of 2019.

Bucharest accounted for over 27% of the total investment volume, mainly because of a very large office transaction which was closed in the second quarter and a retail portfolio transaction closed in the first quarter, both in secondary cities. Market volumes were dominated by office transactions with a share of 52%, while retail accounted for over 33%.

Prime office yields are at 7.25%, prime retail yields at 7.00%, while prime industrial yields are at 8.00%. Yields for retail are at the same level as 12 months ago, while office and industrial yields have fallen by 25 and 50 bps respectively over the year.

There is a very soft downward pressure on yields. However, for the rest of 2019, JLL said it does not expect any drop, especially in the retail and industrial segment, mainly due to the lack of prime product transactions.

The largest transaction registered in first half of 2019 was the acquisition of The Office, a 60,880 sq m office park in the CBD of Cluj-Napoca, the second most important office market in Romania, by Dedeman.

Other notable office transactions in Romania were the acquisition by a private group of former First Bank HQ in the CBD of Bucharest for 20 million euro and the acquisition by Hagag Group of the StirbeiPalace, a historical building in the center of Bucharest which they plan to reconvert into an office scheme, for an estimated 10 million euro.

The largest and only retail transaction concluded in the first half of 2019 was the acquisition of an 80% participation in a portfolio of nine retail parks in several cities across Romania by Mas REI from Prime Kapital.

The most important industrial transaction was the acquisition of a logistic park on the A1 Highway. Bought by CTP from Vabeldfor approximately 40 million euro, the deal consolidated the position of CTP as the largest owner of industrial/logistic space in Romania.

($=0.8946 euro)