8/14/2019 Romania market report 2012
1/21
Accelerating success.
ROMANIA
RESEARCH & FORECAST REPORT
2012
8/14/2019 Romania market report 2012
2/21
2012 | RESEARCH & FORECAST REPORT | ROMANIA
TABLE OF CONTENTS
Foreword 3
Major Deals 4
Executive Summary 6
Economic Overview 7
Office Market 8
Retail Market 9
Industrial Market 12
Land Market 13
Investment Overview 15
Residential Market 16
Hotel Market 18
Key Metric Definitions 20
8/14/2019 Romania market report 2012
3/213 | COLLIERS INTERNATIONAL
Dear Reader,
The year 2011 was a mix of two totally different journeys, one full of hope, head straight
up, during the joyful spring and another in a much slower pace, during the confusing and
gloomy days of autumn.
The debt crisis that extended throughout the second half of the year stalled the optimistic
business plans started in Q1, and what seemed to be the return of the solid growth
turned out to be the start of concerns regarding the real European economic crisis.
Walking on thin ice, the real estate players have spent most of their time in 2011
negotiating with banks, but even if their doors were open for discussion, the safedeposits were locked and the key thrown in the hands of the mother banks.
In order to keep the wheel spinning, they adopted the team work business style and
some shook hands with equity partners. They also fought hard for prelease
contracts, but few managed to secure one. Food retailers were particularly active andaudacious in signing prelease agreements, since the retail figures outperformed those
registered in 2010. In return, they got the best locations, prices and conditions ever seen
on this market.
While the few liquid players took advantage and secured very good deals, whetherrenting or buying, the indebt developers really struggled and some finally collapsedunder the pressure of banks. As a result, the number of bankrupt projects exceeded the
previous year.
It was survival of the fittest and this mood unfortunately cannot lead to win-win
situations, but, on the contrary, it carries along a series of consequences.
Thus, we witnessed aggressiveness during the early development stages : land
owners, bank representatives, project developers, real estate agents and tenants, met
for negotiations that eventually fell apart. Driven by the fear of not losing their protection
against each other, the parties failed to align their business objectives.
The circle of trust who governed the real estate market seems now to be broken. Due
to egocentric attitudes and the race for individual advantages negotiations take too longand opportunities are missed. In the global turmoil context, it is no wonder that local
disputes only worsen the business course.
Since the European debt crisis continues and Greek default still threatens our region, weexpect a tough 2012 in terms of market conditions. IMF recently changed the GDP
estimation for this year to 1.8%, so this means another year of slow activity, lack of
liquidity and financing sources, hence potential losses.
Therefore, once again we might find ourselves on the battlefield.
I trust that in 2012 all parties active on the real estate market reconsider the values of thereal estate business and work together for building a sustainable market with
fairness, trust and professionalism.
What we need to do is to work out creative solutions to make projects happen since the
traditional pillars are no longer available. We need to anticipate the needs of the nextgenerations in order to be competitive in rapidly changing times.
I hope that through our research papers and our passion for knowledge and
education, Colliers International continues to be the best source of information and
analysis for you.
I wish you a pleasant read and a thoughtful reflection on how we can turn the market
around and be all winners.
Sincerely yours,
Ilinca PaunManaging Director
Colliers International
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | FOREWORD
8/14/2019 Romania market report 2012
4/21
8/14/2019 Romania market report 2012
5/215 | COLLIERS INTERNATIONAL
INDUSTRIAL
EMAG, ASESOFT AND FLANCO14,000 M2 CONSOLIDATION
Colliers was assigned by the three major IT&C players to identify the best solution to
accommodate their joint activities, as part of a larger consolidation process.
With an innovative approach, Colliers industrial team relocated them to a 14,000 sqm inEuropolis Logistic Park, structuring the deal to allow further expansions and a mixed use
of office and warehouse
OFFICE
ING14,000 M2 CONSOLIDATION IN CRYSTAL TOWER
Colliers International Office Agency team in Romania represented the tenant, ING Bank,
in the process of setting their head-quarter in the Cristal Tower building located in
Bucharests CBD. ING also leased 800 m of office space for a new branch in an
adjacent building Metropolis.
The deal is one of the largest office leasing deals in Romania in 2011 and it classifies
Colliers Romanian Office Agency team as number 1 in terms
of market share.
RETAIL
CORA LEASED 7,700 M2 IN CITY PARK CONSTANTA
Colliers International mediated the transaction through which Cora leased a space of7,700 m2 in City Park Mall of Constanta, one of the major cities with over 300,000
inhabitants in Romania. Apart from Cora, Colliers International managed to attract, over
the past year, tenants like: LC Waikiki, Stefanel, Stonecreek, Mirano, Noriel, Animax etc.
PROPERTY MANAGEMENT
GE CAPITAL REAL ESTATE AND ALLIANZ TIRIAC50,600 M2
After launching the Property Management division last year, Colliers Internationalsucceeded in winning two major clients, a medium sized office building developed by
Allianz Tiriac and the two properties owned by GE Capital Real Estate in partnership with
Helios Phoenix, in Timisoara and Brasov respectively. In this role, Colliers is responsible
for tenant management, sourcing, controlling the operational budget, maintaining and
improving the overall performance of the assets, as well as financial services and
reporting to the landlord.
LAND
DEDEMAN 6 MLN. LAND ACQUISITION IN CONSTANTA
The Romanian retailer Dedeman, the leader of the local DIY market, bought a 3,5 ha
plot in the Northern part of Constanta, in one of the citysdominant retails schemes. The
Land Division of Colliers mediated the sale transaction through which Dedeman secured
the location for its second store in Constanta, planned for opening in 2012.
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | MAJOR DEALS
8/14/2019 Romania market report 2012
6/216 | COLLIERS INTERNATIONAL
RECENT TRENDS
Economy: Last year, Romaniasstrong performance in industrial production, as wellas its solid export performance helped to recover the countrysGDP.
Investment: 2011 investment figures reflected a mixed appetite for real estateinvestments. Following a dynamic H1 where a number of new deals were
generated, the market slowed down at the end of H2 as investors took a waitand see
approach as the European sovereign debt crisis unfolded.
Industrial: The industrial market remained stable as only 10,000 m2 came on marketin Bucharest. Demand decreased by 10%, a level comparable with 2004sdemand
figures.
Offices: In continuation of the 2010 trend, an increasing number of companiesconsolidated their offices into a single property.
Retail: The new supply in shopping centers was notable in terms of the size of projectsbut also significant in terms of the ability of the developers to bring projects online with
high occupancy rates of over 70%. Food retailers remained one of the most active
segments in the market, followed by large fashion retailers
MARKET PROGNOSIS
Economy:In the near term, the increased CDS spread is expected to be reflected indomestic interest rates which may hinder investment and consumption.
Investment:We are expecting a widening of the price gap between sellers and buyersin the coming months with fewer deals initiated as a result.
Industrial:The growth of the industrial market in 2012 will be similar to the previous
year. Logistic operators will continue to be the most active players in terms of demand.
Offices:As new and existing developers revitalise their optimism toward developing inthe Bucharest market, demand will continue to be driven by companies seeking to
optimise their space.
Retail:The number of preleasing deals in the best located shopping-centres (expectedopenings in 2013-2014) will carry on from the positive trend seen last year.
MARKET INDICATORS
2011* 2012*
GDP GROWTH
UNEMPLOYMENT
WAGES
INFLATION
OFFICE RENTS
INDUSTRIAL RENTS
RETAIL RENTS
YIELDS
* COMPARED TO THE PREVIOUS YEAR
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | EXECUTIVE SUMMARY
Executive Summary
8/14/2019 Romania market report 2012
7/217 | COLLIERS INTERNATIONAL
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | ECONOMIC OVERVIEW
Source: CIA World Book
Source: IMF
SUMMARY
Despite having a reputation as one of the Balkan bad boys, according to the latestIMF report published January 23rd, 2012, the Romanian government received praise
for its monetary and fiscal discipline.
The IMF also upgraded the countrysGDP performance for 2011 due to its strongagricultural output. 2012 GDP estimates were, however, revised downwards to reflect
the externalities of the European crisis. While 2011 growth is expected to close at a
growth rate of 2.0%, by the end of 2012 we will see a slight decrease in economic
growth to 1.8%.
Strong industrial production and exports has initiated a sustainable recovery inRomanias GDP. Favourable economic conditions, including lower unemployment
rates, kick-started a recovery in domestic demand and revealed that the slump in retail
sales has bottomed out. The dips in all three trends are supported by the external
impact of austerity measures in the Eurozone and by extension, the EU as a whole.
Romania currently has a Stand By Arrangement (SBA) with the IMF for a total of3.4billion. While not all of the money has been disbursed, as Romania continues to meet
IMF criteria, funds will be made available. Despite the risk of disruptive fallout from the
Eurozone it is felt that Romania will be able to meet its fiscal target through continued
discipline rather than new policies.
Unfortunately despite this upturn in performance, the price of risk by association ofboth the EMU and EU periphery has meant that CDS spreads on Romanian debt have
widened considerably. In the near term this is expected to be reflected in higher
domestic interest rates which may hinder investment and consumption.
Population 21,904,551
Top Three Cities 2,563,313 11.7%
Bucharest 1,942,254 8.9%
Timisoara 311,428 1.4%
Iasi 309,631 1.4%
Economic Overview
Economic Makeup GDP Labour
Agriculture 12.2% 29.7%
Industry 37.6% 23.2%
Services 50.2% 47.1%
Source: IMF
Source: IMF
8/14/2019 Romania market report 2012
8/218 | COLLIERS INTERNATIONAL
SUPPLY
In 2011, the modern office stock of Bucharest reached approximately 1.5 million m2.114,000 m2 of office space was completed last year and delivered in both central
locations and in the outskirts of the city.
The pace of new office completions continued to slow down and is expected to bemuted in the coming years.
DEMAND & VACANCY
In 2011, market activity increased slightly, following the trend started in 2010. Net takeup reached 145,000 m2 out of the 175,000 m2 of total occupational market activity.
Some of the tenants that renegotiated their contractual terms, also expanded the
leased area. In fact, office space expansions represented 8% of total net take up.
An increasing number of companies consolidated their operations into a singleproperty. For instance, three of the top ten financing institutions secured new, modern
space. Companies who chose to consolidate were able to take advantage of landlords
flexibility and current rental rate levels.
The most active companies of the year were financial institutions, medical and IT&Csegments, which together represented half of the 145,000 m2 net take up.
In terms of availability, 2011 is the first year since 2008 when office take up surpassednew supply. Therefore, the average vacancy rate dropped to 16.5%. Taking out the
Pipera area, the vacancy rate will sit at 12.5%. Availability throughout the city varies by
area. For example, districts such as Floreasca and Barbu Vacarescu benefit from an
almost 0% vacancy rate.
RENTS
Overall, headline rent levels did not record any significant change in comparison torental rates in 2010. Although asking rents remained stable, the majority of landlords
offered rent-free months and other financial incentives, and hence lower effective
rents, especially in buildings with high-vacancy.
PROGNOSIS
For 2012 and 2013 combined, we estimate that another 170,000 m2 will becompleted, out of which 65,000 m2 is already pre-leased. In 2011, new and existing
developers rekindled their optimism regarding the Bucharest market and are seizing
the opportunity to build. Taking into consideration prudent tenants, new delivered
buildings will have higher technical specifications and be better designed, in attemptsto address the needs of clients.
Demand will continue to be driven by space optimization processes. Also, as leaseagreements come to an end tenants will have the opportunity to move into new office
facilities. The lack of large spaces, above 3,000 m2 will lead to a comeback of pre-
leased transactions. Therefore, take up will be of similar value or we might even
expect a slight increase in demand.
As the market matures, overall asking rents will be stable and may increase on theshort term in areas with low vacancy rates.
In the last couple of years, local authorities initiated several infrastructureprojects, aiming to facilitate and improve the urban traffic situation and thereby
enhancing access to several office areas, such us Dimitrie Pompeiu and Western
Bucharest.
Source: Colliers International
Source: Colliers International
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | OFFICE MARKET
Key Office Figures
Total Stock 1,474,000 m2
Net take-up 145,000 m2
Vacancy rate 16.5%
Office Market
CBD
16- 20
Floreasca
1417
Dimitrie Pompeiu1013
Piata Presei
16
South
12
West
0- 13
Baneasa
13- 16
East
1014
ASKING RENT LEVELS
Area Vacancy
West 0%
FloreascaBarbu Vacarescu 2%
Charles de Gaulle 7%
Dimitrie Pompeiu 8%
Victoriei 10%
Baneasa 18%
East 39%
Pipera 46%
0
000
000
000
000
000
000
000
000
NEW SUPPLY & PIPELINE
Contact: [email protected]
8/14/2019 Romania market report 2012
9/219 | COLLIERS INTERNATIONAL
SUPPLY
In2011 we witnessed a total supply of shopping centres developments similar to thelevel reached in 2009 and almost on par with the development levels recorded during
the real estate boom. However, the main difference is that the proportion of foodretailers (in m2) taking up space is the largest since 2002, reaching almost 30% of the
GLA.
Although retail news in H1was quiet, H2 saw the total newsupply measure 180,000 m2
of malls GLA, carried out in four new shopping centre projects and one extension.
In addition to the size of new retail supply in the market, the percentage of space thatwas pre-leased was at its highest in comparison to previous years reaching over 70%
for all retail projects.
Apart from the 20,000 m2 extension of Baneasa Shopping City, all the other projectswere delivered in the countryside.
DEMAND
The food segment remained one of the most active retail segments in themarket, followed by the large fashion retailers led by Germanic operators expanding in
the market.
Retailers who had previously put their expansion plans on-hold got their plansunderway but the decision to expand has become a lengthier process as businesses
are more cautious.
Retail locations with the largest geographic appeal continued to be Bucharest as wellas large cities with inhabitants over 200,000 people.
We also witnessed anchor tenants that opened shops in smaller cities (100,000 to150,000 inhabitants) in order to address a segment of demand not covered yet.
There were several new retailers who entered the Romanian market in 2011, such asH&M, who in less than one year opened 11 shops and agreed on several new
locations for 2012.
RENTS
Rents remained stable in the top performing shopping centres that had limitedvacancy.
Different incentives such as free rent or fit-out contributions, as well as clauses thatsecured the success of the project like certain anchor tenants remained a market
practice for existing centres. Incentives were also found in projects that were required
to achieve a high occupancy rate at the time of opening.
PROGNOSIS
Currently there are 10 shopping centre projects under construction but the number ofprojects that undergo the leasing process is much higher. The quantity of pre-leases in
well-located shopping centres (2013-2014 completions) will continue to increase this
year.
170,000 m2 GLA is expected to be delivered in 2012, but given the leasing andconstruction status, there could be discrepancies in the actual opening dates.
The Romanian retail market performed well in 2011, and as a result there is interestamong new brands to enter the market in 2012.
In terms of financial conditions we do not expect to witness significant changes.
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | RETAIL MARKET
Retail MarketShopping Centers
Area (m2) Romania Bucharest Countryside
ShoppingCenters
Stock*
1,305,000 467,000 838,000
Shopping
CentersNew
Supply*
176,000 20,000 156,000
arting with 2012 Colliers has changed the methodology of calculating
ail stock. The new calculation of shopping centers stock includes any
mmercial scheme planned, built and managed as a single
ty, comprising units with a minimum GLA of 5,000 m2.
City Shopping Center Size(m2)
Bucharest Baneasa Shopping City
(extension) 20,000
Constanta Maritimo
Shopping Center 51,000
Craiova Electroputere Parc 43,000
Arad Galleria 32,000
Oradea Oradea Shopping City 30,000
he figures are based on the official declarations of the developers
CityRent level *
(/ m2/month)
Bucharest 60-70
Cities over 250,000
inhabitants 30-35**
Cities under 250,000
inhabitants 15-20
Brand No. of opened shops
H&M 11
New Look 4
Calzedonia 3
Eponge Fashion 13
Wienerwald 3
Contact: [email protected]
NEW SUPPLY - 2011
ese represent the highest rent levels that can be achieved in the well
forming centers for units of 100 sq m, prime locations
his level represents a market average; there are big differences
ween cities based on the existing competition
8/14/2019 Romania market report 2012
10/2110 | COLLIERS INTERNATIONAL
SUPPLY
The retail parks planned for H2 2011 were successfully opened, bringing another98,500 m2 GLA on the market.
The big retail parks schemes planned to be secured by developers in 2011 werepostponed due to the complicated deal structures.
Several stand alone units were secured by retailers in the food and DIY segments.
Small retail schemes anchored by discount hypermarkets were developed continuingthe trend seen over previous years.
DEMAND
The main focus of hypermarkets was to secure the best locations in the top cities, atrend that will continue.
Still, the focus of some retailers and developers grew also towards medium cities withlow modern stock of retail per capita.
Kaufland and Dedeman were the most aggressive in terms of opening and securinglocations.
Apart from the leasing market, retailers also played an important role on the buyingmarket. Succeshypermarket, a local brand, opened their first hypermarket units last
year replacing PIC in two of their locations
Lidl confirmed its aggressive expansion strategy with the first opening and therebranding of the former Plus stores.
RENTS
Rents remained stable for most big box segments. The evolution of rents for thegallery operators followed the same trend as the shopping centres
Due to the high land prices we may witness structures of retail park transactions thatinvolve sale discussions of part of the boxes to end users.
PROGNOSIS
Due to economic situation and financing problems, risk minimization will be at theforefront of retail expansion plans.
The limited number of good retail park plots at reasonable prices increasescompetition among retailers and developers in the good locations. Retailer sales are
expected to remain at average levels in the short term, minimising the likelihood of
higher rents.
The smaller strip mall format anchored by discounters of all sizes will continue torepresent development opportunities for experienced landlords and developers.
There is only one outlet modern shopping center in Bucharest and due to the lack ofnew brands entry to the market we believe that the existing scheme is sufficient for
Romania in the years to come.
The retail mix in big boxes will remain limited to hypermarkets and DIY operators as
the market awaits new brands to complete the mix of the parks.
Source: Colliers International
REAL ESTATE REVIEW | 2011 | ROMANIA | RETAIL MARKET
Retail MarketRetail Parks
RetailBrand
Parent Company Opened Units
BauMaxx BauMaxx 1
Bricostore Bresson 1
Dedeman Dedeman 5
Leroy Merlin Leroy Merlin 1
BIG BOX OPENINGS - 2011
DIY
FOOD OPERATORS*
RetailBrand
Parent Company Opened Units
Cora Delhaize 1+2**
Kaufland Lidl&Schwarz 11
Carrefour Carrefour Group 2
Auchan MGV Distri-Hiper 2*
Selgros REWE Group &
Co. 1
GALLERY EXTENSIONS - 2011
Project Owner City
European Park(extension) NEPI Braila
Jupiter City Jupiter Pitesti
RETAIL PARK OPENINGS - 2011
Retail Park Area (m2) City
Colosseum 37,500 Bucuresti
Botosani
Shopping
Center
15,000 Botosani
Cora Drobeta 29,000 Drobeta Turnu
Severin
* Total size of the box over 5,000 m2
** Hypermarkets opened in shopping centers.
Contact: [email protected]
8/14/2019 Romania market report 2012
11/2111 | COLLIERS INTERNATIONAL
SUPPLY
During the last year, a number of family businesses have experienced problems andexited from their commercial leases. In addition, many major networks gave up the
unprofitable units leading to slightly increased vacancy rates on high streets incomparison to vacancy rates in 2010.
After the opening of H&M in H1, along with the previously opened New Yorker andZara stores on the ground floor of Unirii Shopping Centre, the new, non-traditional high
street area expanded in the second half of 2011 with the openings of Stradivarius and
Bershka.
DEMAND
In 2011, just like in the previous year, food operators (mini-markets, supermarkets, producers), were the most active segment for high street
space.
The development of the old centre continued as an entertainment area, generallybringing a mix of restaurants, clubs and coffee shops. Fashion retailers have
expressed their interest in this area in 2011 but in the absence of an anchor tenant and
the legal and structural issues of these buildings, there were no significant
transactions. The Adidas store opening which took place in Q1 2011 was not followed
by expansions from other international fashion operators.
The requirements of luxury brands are still primarily directed to Calea Victoriei. VictoriaMen - the luxury multi-brand store was opened on the main luxury artery in 2011.
Burberry has already secured a location which should be opened in H1 2012 and Max
Mara will be relocated in a new location also on Calea Victoriei.
The Commercial Gallery of Marriott Hotel increased its mix of luxury brands with theopening of a Valentino store.
Calea Dorobantilor is increasingly becoming the preferred location for retailers, but dueto the lack of anchor tenants, similar to the situation in the old centre, it makes closing
transactions difficult.
Lack of shopping centre supply in medium sized cities coupled with the potentialdemand these cities represent, has forced some retailers to open on high street
locations instead of in malls.
RENTS
Rents were constant in the central and high traffic areas, as demand for high streetlocations remained unchanged. The rest of Bucharest witnessed a slight decrease in
rents of about 10%, similar with the situation in 2010.
PROGNOSIS
We estimate that the supply of retail space in the Old City Centre will increase boththrough consolidation and redevelopment of older buildings and through new
construction of existing plots or instead of demolishing buildings.
A higher percentage of classic shopping centre retailers will turn their attention towardsretail spaces on high streets in medium sized cities, once the first fashion anchor
arrives in the area.
Restructuring and consolidation of large commercial networks will continue in 2012.Also, most contracts signed in 2007 will expire this year, which will provide the basis
for a new wave of renegotiations and relocations.
The luxury segment could witness several new entrants from the brands that havebeen looking at the market for the past few years.
Source: Colliers International
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | RETAIL MARKET
Retail MarketHigh street
Area Vacancy
Centre 6%
Semi-centre 12%
Periphery 15%
AreaRent level
(/ m2/month)*
Centre 50-75
Semi-centre 20-35
Periphery 7-25
VACANCY LEVELS
RENTS BUCHAREST
CityRent level
(/ m2/month)*
Large 25-40
Medium 20-30
Small 10-15
RENTS COUNTRYSIDE
* 100 m2 locations
* 100 m2, central locations
Contact: [email protected]
8/14/2019 Romania market report 2012
12/2112 | COLLIERS INTERNATIONAL
Source: Colliers International
Source: Colliers International
Source: Colliers International
SUPPLY
During 2011, the industrial market was characterized by stability as only 10,000 m 2
was delivered in Bucharest, in a build-to suit facility. Thus, at the end of 2011, the
industrial and logistic stock measured 922,000 m2 .
In the countryside, the modern stock increased by 95,000 m2 in both build-to-suitfacilities and speculative developments. Most developers started their projects only for
specific tenants so the majority of new industrial space outside Bucharest was built-to-
suit. A few projects started on a speculative basis including in Timisoara and Ploiesti.
DEMAND & VACANCY
In 2011, demand reached 104,000 m2 in Bucharest, out of which one third representedrenewals and renegotiations.
Compared to 2010, demand for industrial and logistics space decreased by 10%. Thistake-up level was comparable to 2004 levels. Out of the total demand, half was driven
by logistic operators.
When selecting space, tenants had a propensity to seek out space that combined amix of quality and an appropriate rental rate as opposed to being purely driven by
price.
Similar to previous years, most demand was located in the Western outskirts ofBucharest. Demand also came from existing tenants that either relocated or extended
their space.
Outside Bucharest, over 50,000 m2 was leased and another 22,000 m2 was extended.Out of the total activity, the automotive sector was most active in both new demand
and renegotiations.
2011 was the first year when important companies relocated outside of Romania and itis anticipated that the vacant space left behind will soon be occupied.
The vacancy rate for industrial space did not change in 2011.
RENTS
In Bucharest, rental levels have remained stable, maintaining the same values overthe past 12 months.
PROGNOSIS
As insecurity still looms over the economic circumstances in the EuropeanUnion, industrial market trends will not vary in 2012 from the previous year.
While Bucharest remains the most important logistic hub in Romania, in terms ofproduction and manufacturing, cities such as
Cluj, Timisoara, Oradea, Craiova, Pitesti, Brasov, will continue to attract new tenants.
Similar to 2011, logistic operators will be the most active players in terms of demand.Also, we expect that some of the outsourcing agreements will expire and hence we
might see companies change their logistic operator.
As lease agreements approach their expiration date, landlords will work to maintaintheir current tenants.
Land transactions for industrial use will be limited as most of the large developers inthe market already have additional land capacity for further developments.
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | INDUSTRIAL MARKET
Key Figures
Total Stock 922,000 m2
Take-up 76,000 m2
Vacancy 15%
Prime Headline Rent 4.2 m2/month
Industrial Market
AREA (m2) RENT
(/ m2) FORECAST
< 3,000 44.5 Stable
3,00010,000 3.754.2 Stable>10,000 3.54 stable
Contact: [email protected]
0
50
100
150
200
250
INDUSTRIAL AND LOGISTIC SPACEDEMAND
DEMAND & DELIVERIES IN THECOUNTRYSIDE
8/14/2019 Romania market report 2012
13/2113 | COLLIERS INTERNATIONAL
With the prospect of better economic conditions and more attractive prices, 2011started as a year with increased investor appetite for land plot acquisition. However, a
good beginning is only half the battle as towards the end of the year, macroeconomic
turmoil generated by the sovereign debt crisis and euro zone worries slowed down the
investors pace, who became extremely cautious when making the purchasing
decision.
Nonetheless, numerous transactions were finalized during the past year (mostly forretail lands) and several others (for both retail and office land) have advanced to final
stage, their conclusion depending on building permit approvals.
We estimate that the total transaction volume on the land market in 2011 wascomparable to that registered in 2010, even though the number of deals was greater.
2010 comprised several big transactions amounting over30 million, that were not
repeated in 2011.
SUPPLY
A significant number of the developers that undertook aggressive land acquisitioncampaigns between 2005 and 2008 and did not succeed in completing projects while
the markets were in boom, tried to exit Romania and sell their portfolios. Companies in
this situation were mostly of Spanish, Israeli or Greek origin and their portfolios
consisted mainly of land plots for residential development only.
Vendors that did not want to sell their assets at a loss found themselves in thesituation of either holding the land plots while expecting a future market recovery, or
finding alternatives like joint-venture partnerships for possible developments.
Overall the supply of distressed properties remained rather low. Most of the highlydiscounted land plots were either plots situated at the periphery, or properties suitable
for residential use only.
DEMAND
In Bucharest, the structure of demand seems to have emerged during the last twoyears and we have observed a segregation of three different layers:
1. Big box retailers/developers continue to be the main players on the market, insearch of consolidating their position and their future strategic locations. The highest
interest was shown for semi-central areas, within high-density population
neighborhoods, excellent infrastructure, accessibility and visibility. We noticed a new
trend on the market, that traditional residential or office developers and investors saw
the increased potential of the retail sector and reshaped their strategies accordingly.
2. Office developers This segment targeted very well located land plots inBucharest, in established office areas, with developed infrastructure and proximity to
subway stations. They also pay close attention to the advanced status of the permitting
process, which allows them to start construction, market and deliver the project ahead
of the competition.
3. Residential investorsThis category was the least active of all and interest wasexpected mostly in partnerships. By acting this way, investors tried not to block liquidity
in land plots and projects that were still difficult to sell in the current market. These
investors target almost exclusively Prima Casasmall scale developments (below 100
apartment units), and look for land plots within a price range lower than 100-120 /m2
of built area.
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | LAND MARKET
Land Market
Source: Colliers International
For 2012, we expect amoderate evolution and
an activity volume
comparable to the
previous year
City Area Value Buyer
BucurestiCalea Plevnei 2 ha 11 M* Interprime
Bucuresti
Sf. Voievozi &Popa Petre
2,400m2
2.2 M PrivateInvestors
Bucuresti
Drumul Taberei &
Giulesti
2.7 &
1.5 ha20 M* Auchan
Constanta 3.5 ha 6 M Dedeman
Bacau 1.9 ha 4.5 M Retail
Developer
Bistrita 2 ha 2 M Dedeman
*Market estimation; no official information made
public
REPRESENTATIVE LANDTRANSACTIONS - 2011
Contact: [email protected]
8/14/2019 Romania market report 2012
14/2114 | COLLIERS INTERNATIONAL
In addition to the above, a timid demand came from two other segments that continuedto expand in 2011: medical and hotel sectors.
One of the problems that slowed down transactions in 2011 (besides the increasedtime frame caused by the authorization process), was the uncertainty of the legalownership of some of the properties, as well as the events and rumors present in the
economic environment, that at times resulted in the revision of already discussed
conditions and agreements.
PRICES
Prices moved slowly compared to 2010, registering a decrease within the range of 5%to 15%, on average.
In some areas in Bucharest where interest proved to be high, we estimate that theprices reached their minimum, except for some specific cases. These categories take
into account areas like Charles de Gaulle, Aviatorilor, Aviatiei, Barbu Vacarescu or
Calea Plevnei.
Peripheral locations as well as those areas with limited development potential (lack orpoor infrastructure, residential use only) continued to experience decreasing prices, up
to 35 - 40% compared to 2010.
FORECAST
For 2012, we expect a moderate evolution and a similar volume of activity as in therecently closed year, since investors show a reserved approach, in many cases
resulting in the renegotiation of land prices.
In this context, we expect average prices to continue on a downward trend, except for
those highly targeted areas which are perceived as having good development potentialon the short and medium term.
Property financing remains a crucial element to the market and we are unlikely to seean increase in demand for land until financing becomes readily available and demand
for future developments picks up.
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | LAND MARKET
Land Market
BUCHAREST AREAS WITH LANDPLOTS TRANSACTIONS - 2011
COUNTRYSIDE CITIES WITH LANDPLOTS TRANSACTIONS - 2011
Contact: [email protected]
8/14/2019 Romania market report 2012
15/2115 | COLLIERS INTERNATIONAL
Source: Colliers International
Source: Colliers International
Source: Colliers International
2011 investment figures reflected a mixed appetite for real estate investments.Following a dynamic H1 where a number of new deals were generated, the market
slowed down at the end of H2, as investors took a waitand seeapproach as the
European sovereign debt crisis unfolded.
TRANSACTIONS
In terms of closures, the year was mostly dominated by small sized transactions, ofunder20 million. This is a consequence of the low activity of Western investment
funds (either private equity or institutional) in 2010. Therefore, the most active players
in 2011 were the Greek Fund Bluehouse and private investors like Augustin Oancea
and Ioannis Papalekas. The overall volume of transactions amounted to around 150
million, of which only45 million were from classic investment deals.
Apart from the three classic investment transactions closed in H1 2011: PraktikerCraiova, Astoria Center office building in Romana Square and Loius Blanc office
building in Victoriei Square, the market saw two distressed sales of shopping center
projects, namely City Mall in Bucharest and Macromall in Brasov.
The most notable transaction of the second half of the year was the joint venturepartnership between the Canadian developer CD Capital, represented by Colliers and
the South African Fund NEPI, for the development of Victoria City Shopping Center in
Bucurestii Noi area. NEPI came in as a 50% partner and will lead the development of
the 56,000 m2 shopping center. This is the first Bucharest shopping center joint
venture transaction to be closed on the market since the inception of the crisis and
marks a growing trend among investors and developers who are not finding suitable
existing projects or available land plots and are thus drawn to joint ventures that
ensure good locations, good potential returns and a reduction of risk.
The lack of good existing opportunities on the market has also led investors who were
initially focusing on acquisitions to reorient their strategy towards development. NEPI isone prominent example - after the acquisition of European Retail Park Braila and Iris
Pitesti retail parks they are now developing their own retail projects in Ploiesti and
Brasov next to Carrefour hypermarkets.
INVESTORS AND DEAL PIPELINE
In H1 2011, in the context of the feeble but nonetheless positive economic growth ofthe country, and the result of Floreasca 169A transaction (at an 8% yield), the market
saw a slight yield compression. This brought the expectations of the sellers and the
interested investment funds closer and sparked a heightened level of activity in terms
of offers, negotiations and potential deals during this period. The main target of the
investors remained class A office buildings in prime locations in Bucharest, followed by
retail big boxes with good quality tenants and long term contracts.
The worsening of the European economic environment coupled with the tightening ofthe financing markets led to a more cautious approach from investors, which reduced
drastically their activity towards year end. Moreover, a number of ongoing deals that
were generated in the first half of the year were stalled or even fell through.
Nonetheless, the deal pipeline still remains strong, the volume of transactions in due
diligence or advanced negotiation stages amounting to150 -200 million.
YIELDS
Whereas the first half of the year brought a yield compression trend for prime officebuildings to slightly below 8%, the trend was reversed towards the end of the year. The
main cause of this development was the tightening of financing conditions. Withlending scarce and expensive, investment funds have to be more reserved with the
yields in order to reach their return targets.
We expect to see a widening of the price gap between sellers and buyers in thecoming months and fewer deals initiated as a result.
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | INVESTMENT MARKET
Investment MarketKey Figures
Investment Turnover 150 m
Prime Office Yields 8%
Prime Retail Yields 8.5 - 8.75%
Prime Industrial Yields 10%
Property Seller Buyer Price
( mln.)
Praktiker
Craiova Omilos Bluehouse 10
Astoria
Center
Nicholas
Abaco
Bluehouse 10
Louis Blanc Cefin
Augustin
Constantin
Oancea
6
City Mall Insolvency
company
Ioannis
Papalekas 17.3
MacroMall Carpathian Local
business man 1
CLASSIC INVESTMENT DEALS
Property Type Seller Buyer
Victoria City Joint
Venture CD Capital NEPI
Adama
Company
Intra-
group Adama Immofinanz
Raiffeisen
Tower
Intra-
group
Raiffeisen
Evolution
Raiffeisen
Property
Intl.
Iris PitestiShopping
Gallery
exercisedexisting
option
Avrig 3-5 NEPI
OTHER TRANSACTIONS
Contact: [email protected]
0%0%0%0%0%0%0%0%0%0%0%
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
2006 2007 2008 2009 2010 2011
Office Industrial Retail
EVOLUTION OF YIELDS
8/14/2019 Romania market report 2012
16/2116 | COLLIERS INTERNATIONAL
The first half of 2008 saw the Romanian residential market at its t peak. Prices per builtsquare meter soared reaching an historical average high of1,630 and demand
accounted for around 60% of the announced stock. The aftermath of the international
financial crisis was felt by all real estate segments, bringing the accelerated rhythm ofgrowth of the local market to a complete standstill.
The first year of Romanian economic recovery saw the residential market in aprecarious position. Even though prices stabilized at an average of1,000 built
m2, and sales volumes were relatively constant over the last 36 months (2-3
apartments per month per project) consumer confidence still remained low. Investors
have slowly returned to the market, although transactions continue to be few and far
between.
Not surprisingly, for the third consecutive year since the economic crisis, the mostactive segment of the market has been the one consisting of projects targeting the low
income population.
SUPPLY
Before 2005 one could hardly talk about a new apartment market in Romania. Mostnew housing facilities were small scale developments located in traditional luxury
areas designated for expats that occupied executive positions in Romanian HQ.
Between 2005 and 2008 the market heated up and developers confidently announcedthe delivery of more than 35,000 units over the following years. However, by the end of
2008 the market conditions had changed for the worse. Most investors started pulling
out and many end users could not follow through with their promissory agreements.
The lack of interested buyers made developers postpone their projects or slow down
the delivery rate of secondary phases. Currently, only 44% of the announced units
have been completed.
Of the current stock of 15,700 apartments in compounds with more than 200units, 64% were delivered in the first two post crisis years. 2011 saw a significantly
reduced number of deliveries in similar projects (only 16% out of the average of the
previous two years).
In the last three years the market also received a number of smallerprojects, addressing the low income population, located mainly on the outskirts of the
traditional residential neighbourhoods. These developers have adapted to the new
conditions of the residential sector and have renounced the generous
surfaces, luxurious finishes and central locations, for small affordable units with prices
similar to those of old apartments.
DEMAND
Demand followed the upward trend of the local economy with virtually few to notransactions before 2005, followed by an average of 25-30 units per project per month
in the peak years. However these rates are a characteristic of emerging markets and
are not sustainable in a mature, stable economic environment. Over the last three
years the market has averaged around 2-3 apartment sales per project per month. The
most dynamic sector of the residential market has been that targeting the low income
buyers with 4-6 units/project/month.
An important factor in the apartment acquisition process is access to financing. Thetransactional blockage of 2008 and the first half of 2009 reshaped the mortgage
market when banks imposed more restrictive standards for their clients.
Nevertheless, in order to encourage the local real estate segment, the RomanianGovernment reduced VAT to 5% for properties under RON 380,000 and put in
place, in the second half of 2009 a special scheme for First Time Buyers. (Prima Casa)
Source: Colliers International
Source: FNGCIMM
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | RESIDENTIAL MARKET OVERVIEW
Key Residential Figures
New units stock* 15,700
Available units* 3,800
Sold Units 2-3 / project / month
Average Price 1,000 /m2
Residential Market
Source: Colliers International
* In projects with more than 200 units
1600
3386
8134
4819
19000
000
000
000
000
2007 2008 2009 2010 2011
SUPPLY VS. EXPECTED SUPPLY
Deliveries Expected Deliveries
Over the last three years
the market has averaged
apartment sales per
project per month
2-3
30%
7%
6%
6%4%4%5%
38%
PRIMA CASA DISTRIBUTION BY COUNTY
Bucuresti Cluj Ilfov Timis
Constanta Iasi Brasov Other
Contact: [email protected]
8/14/2019 Romania market report 2012
17/2117 | COLLIERS INTERNATIONAL
Access to cheap financing enabled clients to benefit from the state guaranteedloan, 5% equity and the maximum interest margin imposed by the government.
Already at itsfourth edition, the Prima Casaprogramme accounts for 2.1 billion
granted for 52,740 units.
Nevertheless the gap between developers expectations and end users actualpurchasing power continues to be wide, despite significant drops in prices (40% on
average). With an average of 40.2 real estate transactions per 1,000 inhabitants, (third
highest in the EU), Romanians were more willing to buy the communist cheaper
apartments rather than new units. Only 25% of the granted loans through Prima Casa
were destined for new residential units, the remaining buyers securing apartments in
old blocks of flats.
Residential investors were more active on the market than in previous years. Asprojects went into default, they were able to buy apartment packages at preferential
prices. However, actual transactions were difficult to come by.
PRICES
Between 2005 and 2008, the market, encouraged by the high demand and accessiblefinancing conditions, registered an asking price growth of 15% YOY. In the two years
of economic recession, prices had a steep drop of around 20% per year, followed by a
milder decrease of only 10% in 2011.
The asking price per built m2 reached an average of1,000 (VAT not included) at theend of the year.
FORECAST
2012 is expected to have a similar growth pattern to that of the previous year. Despitethe positive local economic outlook, the recent European public debt crisis has made
both investors and developers sceptical about the recovery pace of the Romanian real
estate segment.
Demand will be directly dependent on financing conditions. As of January 31st
2012, the National Bank of Romania has imposed 25% equity criterion for euro
contracted mortgages and a 15% down payment for those granted in RON. The Prima
Casa programme will be in place in 2012 and is exempt from this new regulation. As it
was the case in the previous semesters, demand from end users will most likely be
focused on Low income projects and sales will remain at current levels.
It is improbable for prices to register any significant fluctuations in the next few months.
The difficult financing conditions will avert both buyers and developers from makingdecisions in the next period. An upward trend is expected as the current stock is
absorbed and end users and financial institutions regain their confidence in the local
economy.
Source: Colliers International
Source: Colliers International
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | RESIDENTIAL MARKET OVERVIEW
Residential Market
1150
1630
1005
0
0
0
0
0
0
H2
05
H2
06
H1
07
H2
07
H1
08
H2
08
H1
09
H2
09
H1
10
H2
10
H1
11
H2
11
PRICE VARIATION
Source: Colliers International
1,3001,072
1,000
700
200
700
2009 2010 2011
PRICES BY PROJECT TYPE
low middle
upper middle market average
Asking price forresidential units
H1 2011 H2 2011
Low projects 910 /m2 875 /m2
Middle projects 1,172 /m2 1,150 /m2
Upper middle
projects 1,500 /m2 1,450 /m2
Average Price 1,050 /m2 1,000 /m2
Contact: [email protected]
8/14/2019 Romania market report 2012
18/2118 | COLLIERS INTERNATIONAL
SUPPLY
The number of hotels increased in Romania in 2011 by 6.1% to 1,308 properties.Three star properties grew 34.2% while two and one star properties had a negative
growth (-9.7%, respectively -47.0%). Growth also varied by location such that thehighest increase in the number of hotels occurred in secondary cities (24.3%) while the
number of hotels at the seaside registered a decrease of -19.4%.
The presence of international hotel chains is still limited. Only 7.8% of the roominventory affiliated to a hotel chain is international. International chains are
concentrated in Bucharest (4,173 rooms out of 10,573). The main hotel groups
present in Romania are Wyndham Hotel Group (1,681 rooms), Accor (1,221 rooms)
and Best Western (1,072).
In 2011, 75 hotels opened mainly through the renovation of existing hotels (HotelGrandTargu Mures, Hotel Sportul- Poiana Brasov, Hotel Roman- Roman) but also
new built (Ramada Pitesti- Pitesti, Grand Hotel Italia- Cluj Napoca, Hotel Metropolis-
Bistrita) and conversions (TulipInn Nerva Traian to DoubleTree Unirii).
DEMAND
After low levels of demand in 2010, 2011 marked a strong revival in tourist arrivals(15.5%), both in domestic arrivals (16.4%) and international arrivals (12.5%).
Overnights increased also but at a slower pace (11.3%), which led to a decrease in
average stay to 2.55 days (-4%).
The highest increase in tourist arrivals was registered in balneal resorts (+18%) andsecondary cities (+16%) out of which Craiova (+38%), Cluj (27%), Galati (+25) and
Arad(+19%) registered highest increase .
The main feeder market is from the European Union (59.4%), specifically fromcountries such as Hungary (23.1%), Bulgaria (10.5%), Germany (5.3%), Italy (4.4%)
and Turkey (3.5%).
BUCHAREST MARKET
The number of hotels remained constant (131 properties) but room inventorydecreased (-7.3%) mainly due to a change in size of one large property (Rin Grand
Hotel from 1,450 to 580 rooms). This change occurred as part of a transformation
process in which some of the rooms became residential units.
For the second year in row, Bucharest registered an increase in tourist arrivals(14.3%), reaching two million overnight visitors, which is a level similar to 2008.
Occupancy posted an increase of 11.4% compared to 2010, reaching 56.5%. Thisincrease was not even across all categories, the highest increase was for 4 star hotels(17%) while the lowest increase was for 5 star hotels (7.4%). As the market is based
on business travel, occupancy varies very much by season, with low numbers in
January and August (35% to 40%) and high numbers in May June, October and
November (65% to 70%).
For the first time after 2 years, the average nightly rate also went up, with a 4.4%increase to 65.5 per night. The highest increase was for 3 star hotels (6.7%) and
lowest increase was for 5 star hotels (3.2%).
TRANSACTIONS
Altogether, there were approximately 350 properties for sale which represented adecrease of 40.0% compared to the previous year.
Source: Trend Hospitality
Source: Trend Hospitality
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | HOTEL MARKET OVERVIEW
Key Figures
Number of hotels 1,308 (6.1%)
Number of beds 174,750 (-5.6%)
Tourist arrivals 7,014,000 (15.5%)
Hotel Market
HOTELS BY DESTINATION
Balneo
Resorts, 11
.5%
Seaside, 21
.7%
Mountains,
12.2%
Danube
Delta, 1.4%
Bucharest,
11.1%
ondaryes, 24.8
%
Other
17.2%
HOTELS BY CATEGORY
5
stars, 1.8% 4stars, 14.8
%
3
stars, 45.9
%
2
ars, 30.7
%
1
star, 6.1%
TOURIST ARRIVAL
12.1%
4.4%
-14.0%
-2.9%
16.4%
12.4%
-5.5%
-13.0%
5.5%
12.5%
0.0%
5.0%
0.0%
5.0%
0.0%
5.0%
0.0%
5.0%
0.0%
2007 2008 2009 2010 2011f
Domestic International
Source: Trend Hospitality
Contact: [email protected]
8/14/2019 Romania market report 2012
19/2119 | COLLIERS INTERNATIONAL
The average price asked per room varied according to location, and category: a hotelroom in Bucharest had an average asking price of141,000/room, for a secondary city
hotel it was 130,000/room and for a leisure hotel (mountains and seaside) it cost
83,200/room.
The volume of transactions reached 35 million, three times more than last year. Themost important transactions included the acquisition of 30.0% of Continental Hotels by
GED Capital for an estimated amount of18 million and the acquisition of 16.2% of
Intercontinental Bucharest by Astra Asigurari for4.1 million.
Buyers are mainly companies or investment funds that are looking to consolidate theirpresence on the local market, like GED Capital or Astra Asigurari, or individual
business people with available money that are looking to acquire good assets at
discounted prices, like Hotel Scandinavia in Mamaia or Hotel Moldova in Bacau.
Also, some properties were liquidated by creditors, and sold mainly to local investorsfor low prices, like Hotel Alutus in Ramnicu Valcea or Hotel Parc in Oradea.
PROGNOSIS
Not many projects were launched in the last few years, and with few openingsannounced for 2012 (around 20), any increase in supply will remain marginal.
Turnaround projects are also likely to appear as office or residential projects will look
for a different use.
The presence of international brands in the Romanian market is expected toincrease, as affiliation will be seen as a good way to increase competitiveness and
market share. Hilton Worldwide and Wyndham Hotel Group are expected to increase
their presence, especially through their mid and economy level brands such as
DoubleTree, Hilton Garden Inn and Hampton, Ramada and Days Hotels.
Generally, demand follows the same line as GDP (estimated at 1.8%, in 2012) and
airport passenger movements (estimated at 8%), therefore we have reasons to believethat demand also will increase in 2012.
Better management of European funds and increased investments in tourism andinfrastructure will help increase the attractiveness of some destinations, especially in
leisure and resort areas.
A strategic marketing plan for Romania, for 2011 to 2015, was launched by creating acountry brand, the broadcasting of TV spots on dedicated international channels
(Eurosport, CNN, Euronews), and the participation in major European travel and
tourism fairs and exhibitions (London, Berlin, Madrid). We think that this strategy will
start to show some results and will continue to promote Romania as a travel
destination.
Hotel activity will continue its positive trend as tourist arrivals are expected to rise byapproximately 5% to 6%. Rates will follow the same trend and will continue trending
upward, but at a much slower pace, with an estimated increase of 2% to 3%.
A new wave of properties will be available for sale, as owners realize that prices willnot get any higher then current levels and lenders look to liquidate some of their
assets.
Source: Trend Hospitality
Source: Trend Hospitality
RESEARCH & FORECAST REPORT | 2012 | ROMANIA | HOTEL MARKET OVERVIEW
Hotel Market
OCCUPANCY, BUCHAREST
AVERAGE RATE, BUCHAREST
TRANSACTION VOLUME
Source: Trend Hospitality
MAIN FEEDER MARKETS
0%
0%
0%
0%
0%
0%
0%
0%
2008 2009 2010 2011
-
10
20
30
40
50
60
70
8090
2008 2009 2010 2011
0
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011
Millions
# CountryNights(thousands)
1 Hungary 1,735
2 Bulgaria 784
3 Germany 395
4 Italy 331
5 Turkey 265
Contact: [email protected]
8/14/2019 Romania market report 2012
20/2120 | COLLIERS INTERNATIONAL
The information contained herein has been obtained from
sources deemed reliable. While every reasonable effort
has been made to ensure its accuracy, we cannotguarantee it. No responsibility is assumed for any
inaccuracies. Readers are encouraged to consult their
professional advisors prior to acting on any of the
material contained in this report.
COLLIERS RESEARCH
Colliers Research Services Group is recognized as a knowledge leader in the
commercial real estate industry, providing clients with valuable market intelligence to
support business decisions. Colliers research analysts provide multi-level support across
all property types, ranging from data collection to comprehensive market analysis.
Across the CEE-SEE-Russia region of EMEA, Colliers researchers regularly collect and
update data on key real estate metrics, set to consistent definitions. This information is
constantly managed using databases, enabling staff to readily produce analysis on key
regional markets including supply, demand, absorption, pricing and transaction data on
capital markets and the office, industrial and retail sector. In most CEE-SEE-Russian
markets, the office definitions used are consistent with those set out by the CEE
Research Forum an umbrella group, of which Colliers is a founding member -
established to ensure consistent research methodologies are used, bringing greater
transparency and reliability to the analysis of real estate markets in the region.
Definitions of the key metrics used in our regular reports are highlighted below.
KEY METRIC DEFINITIONS
Prime Headline Capital Value (derived):This is a calculation of market value derivedfrom the annual prime headline rent divided by the prime (net initial) yield.
Prime Net Initial Yield: The yield an investor is prepared to pay to buy a Grade Abuilding, fully-let to high quality tenants at an open market rental value in a prime
location. Lease terms should be commensurate with the market. As a calculation Net
initial yield = First yearsnet income/purchase price (prior to deducting fees and taxes)
Prime Headline Rent: Represents the top open-market tier of rent that could beexpected for a unit of standard size commensurate with demand, of the highest quality
and specification in the best location in the market at the survey date. This should
reflect the level at which relevant transactions are being completed at the time but
need not be exactly identical to any of them, particularly if deal flow is very limited or
made up of unusual one-off deals. If there are no relevant transactions during thesurvey period, the quoted figure will be more hypothetical, based on expert opinion of
market conditions, but the same criteria on building size and specification will apply.
Prime Net Effective Rent:Prime Net Effective Rent is the lowest rent payable, basedon a calculation of the Prime Headline Rent, less the monetary equivalent of the
highest of either the rent-free period or fit-out contribution available at the time of the
survey date.
Average Headline Rent:Average Headline Rent represents the average open-markettier of rent that could be expected for a unit of standard size commensurate with
demand, based on a blend of Grade A & B space across a range of locations in the
market at the survey date.
Total Competitive Stock:Includes the gross leasable floorspace in all A and B classbuildings.
Space Under Active Construction:Represents the total amount of gross leasablefloorspace of properties where construction has commenced on a new development or
in existing properties where a major refurbishment/renovation is ongoing at the survey
date.
Space Under Construction Inactive: Represents the total amount of grossleasable floorspace of properties where construction had started/where a major
refurbishment/renovation was ongoing, but activity has since stopped for a period of 3
months or longer.
Vacant Space:The total gross leasable floorspace in existing properties that meet theCompetitive Stock definition, which is physically vacant and being actively marketed at
the survey date. Space should be available for immediate occupation.
512 offices in61 countries on6 continents
United States: 125
Canada: 38
Latin America: 18
Asia Pacific: 214
EMEA: 117
$1.5 billion in annual revenue
978.6 million square feet under
management
Over 12,500 professionals
ROMANIA:
Colliers International
Floreasca Business Park
Calea Floreasca 169 A
Building A, 7th floor
Bucharest 1, 014459
Tel +40 21 319 77 77
FAX +40 21 319 77 78
EMAIL [email protected]
RESEARCH & FORECAST REPORT | 2012 | ROMANIA
8/14/2019 Romania market report 2012
21/21
Top Related