What is your projection for 2020 on the Romanian investment market? How will the coronavirus pandemic impact investment activity?

The coronavirus is having a serious impact on real estate markets globally and Romania is no exception. We have already seen most of the ongoing transactions being postponed or completely cancelled during the lockdown period. Hospitality and retail have been most affected, and it will probably take a while before the NOI of hotels and shopping centres will stabilise once again. Therefore, we expect investment activity in these segments to be limited in 2020. There is still interest and liquidity for logistics and offices, but what is very important is how lender sentiment will evolve over the next few months.

Andrei Vacaru

Head of Capital Markets
JLL Romania

Andrei has over 13 years’ experience on the Romanian real estate market which spans over different segments, including capital markets, consultancy, retail leasing and retail tenant representation. He joined JLL in May 2007 as Senior Consultant in the Retail Department. He then managed the Retail and, afterwards, the Research and Consultancy departments. Since joining the Capital Markets team in 2014, Andrei has contributed to landmark transactions. The JLL Romania Capital Markets team has advised on transactions with a total volume of close to €1 billion in the last 4 years. Andrei holds a Bachelor’s Degree in Public Communication, from the University of Bucharest. He has attended various education programs including a scholarship in humanities at Midsweden University in Sundsvall, Sweden.  More »

In the last two years, we’ve witnessed domestic investors becoming more active on the Romanian market. Do you expect this trend to continue?

Domestic capital has started to become more important on the Romanian market in the last two years, but this trend has been driven by a small number of private investors. Consequently, although it would be expectable that local players will be the first to take advantage of the opportunities that will arise following the coronavirus pandemic, it is difficult to predict if this handful of high net worth individuals or groups will have the motivation to continue to invest in real estate rather than elsewhere.

Regional cities are becoming more attractive investment destinations. What types of investors are looking outside the capital? What types of assets are they looking for?

Regional cities have been growing rapidly in the last years and that has led to the development of more institutional-quality real estate which in turn generated more transactions. For the moment, the main investors in these cities are either local or international groups that already have a strong presence in the country. But we have also seen regional players such as Indotek or White Star making their entry in the Romanian market through a significant acquisition in a secondary city. In terms of asset types, transactions volumes have been mainly driven by retail and office in the last two years.

What are the main concerns investors share with you when evaluating new investments?

The performance of the assets considering the impact of the coronavirus pandemic is probably the biggest concern currently.

Has the growing use of new technologies impacted the decision-making process of investors? Will the new working conditions created by the coronavirus pandemic accelerate the adaptation of technology?

We have already seen an unprecedented acceleration in the adoption of new technologies during the lockdown and the trend will continue even when we will be able to go out of our homes freely. This is one of the few certainties going further. While this will facilitate our interaction at both personal and professional levels, I still believe real estate investors will remain adamant about seeing the properties and understanding them first-hand before making any final decisions.