Romanian investment market shows resilience in the face of the pandemic

The recent transactions closed in the last weeks, with a total value of 400 million euros, demonstrate that the investment market in Romania remains strong and attractive even in the Covid-19 pandemic period, according to Cushman & Wakefield Echinox real estate consultants.

The joint-venture of Resolution Property and Zeus Capital Management recently acquired Floreasca Park office project from Bucharest, while AFI Europe finalised the acquisition of NEPI Rockcastle’s office portfolio in Romania, including Floreasca Business Park, The Lakeview, Aviatorilor 8 (all in Bucharest) and City Business Center from Timișoara.

Results registered in Q2 and Q3 of 2020 have confirmed some important factors

The closing of Floreasca Park in August, shortly followed by NEPI Rockcastle’s sale of their office portfolio to AFI Europe, under-pins the fact that the interest from investors in Romania remains and is set to grow.

The joint-venture of Resolution (Fosun Group) and Zeus Capital Management shows that new money is prepared to enter Romania, a trend which continues that of 2019, when Morgan Stanley acquired their first property in Romania.

The strength of tenant covenants in any building is essential and will be analysed even more closely by investors in the future.

The quality of a building will also become ever more important, if sellers are seeking to maximise pricing and attract a wide investor pool.

Debt finance continues to be available, however we do expect banks to be more selective in their funding choices, particularly in relation to the tenant strength and quality aspects mentioned above.

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