Boston, MA -- (SBWIRE) -- 05/05/2014 -- Romania's economy as a whole is forecast to grow by 2.8% in real terms in 2014, according to our Country Risk team's latest macroeconomic outlook. Underpinning our continued relative optimism for the country's commercial real estate sector is growing activity in the local construction market and an increase in pipeline dynamism which should help to re-invigorate the commercial real estate sector as it continues to suffer the after effects of the global financial crisis.
With a focus on the principal cities of Bucharest, Brasov and Cluj-Napoca, the report covers the rental market performance in terms of rates and yields and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the eurozone crisis on a market already characterised by austerity.
Cautious tenant demand amid a climate of uncertainty continues to dominate market sentiment in spite of an anticipated improvement in market fundamentals. As such, in terms of the leasing market, conditions are set to remain tenant favourable. Most occupiers look set to continue implementing cautious strategies, with lease renegotiations remaining on trend to ensure cost containment and value for money in a soft market with limited new supply.
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Despite this, we see opportunities for growth and signs of strengthening investment in certain sections of the market, particularly the retail segment. Growing income levels and changes in consumer spending habits are leading to increased demand for retail space in major cities, though growth in rural areas has been much slower.
While there is some scope for growth in rental rates in 2014, our overriding outlook is for rates to remain broadly stable over the course of the year with potential for marginal decreases in some cases.
Secure Property Development & Investment is to buy a 17,000 square metre logistics park in Bucharest from Myrian Nes and Theandrion Estates. The acquisition of Innovations Logistics Park will boost Secure Property's regional logistics portfolio. The fully occupied park currently generates EUR1.3mn (US $1.8mn) of income a year. Swiss food group Nestle is the anchor tenant, leasing more than 60% of the gross leasable area.
In Q114, UK-based commercial property investors New Europe Property Investors acquired a shopping centre in Constanta, from Israel-based real estate investment company Neocity Group for EUR81mn (US $110.25mn). The City Park Mall covers an area of about 29,000 square metres and includes tenants such as Zara, Bershka, Pull & Bear, Cora, Mango, Domo, LC Waikiki and Koton.
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