The real estate investment volumes in 2020 will be about 50% lower than originally expected before the crisis caused by the new coronavirus pandemic, according to Gijs Klomp, Head of Investment Properties, CBRE Romania.

He also said that “only in 2021, we will see a return to volumes over EUR 1 billion.”

CBRE consultants believe that the real impact of the COVID-19 pandemic in the real estate market will be felt during the second quarter of the year, while in the medium and long term, the focus will be on health and safety measures as well as on technology.

“The impact of the virus on the real estate market is increasing, and the immediate impact will be felt during Q2. However, slowly, but surely the lockdown procedures in place seem to be paying off in Europe with some indications of the partial reopening of national economies,” said Jos Tromp, Head of Research, Continental Europe, CBRE.

Generally, office-based jobs will be less affected than others, such as retail, leisure, and hotels, but office vacancy rates are still likely to rise.

In Romania, the food and beverage and entertainment sector was hit the most and might look very different after the crisis with vacancies expected to be higher than 30% by the end of the year.

„Overall, collection rates went down dramatically, the April average in shopping centers has been between 10 and 20% until now, and May collection is expected to be even lower. As such, besides the short-term measures of cost savings taken, landlords have already started discussions with their banks to defer payments and are treating the talks with retailers very maturely,” declared Luiza Moraru, Head of Property Management, CEE, CBRE.

Meanwhile, office construction sites of developers like One United, Skanska, Forte Partners, or Tiriac move as planned and on time. Regarding the leasing activity, CBRE estimates that 2020 has chances to be at 50 – 60% of the leasing volumes from last year, with renegotiations and take-up having a 50/50 share.

Looking at the leases that expire this year and next year, there will be approximately 300,000 sqm that will have to decide what to do next. Around half of this will turn to a renewal and renegotiation solution, and the other half might lean towards existing or pipeline projects, according to CBRE.

In the property management sector, CBRE is working on redefining common areas and their servicing by creating clear traffic corridors, specific health and safety measures such as UV filters, door handle covers, lifts buttons protections, HVAC servicing, natural ventilation.

„We expect that the operating hours of office buildings will be longer going forward. Many tenants will choose to work in shifts as well or have flexible hours. As such, the operational costs of the buildings are expected to rise in a moment when cost efficiencies are essential”, said Luiza Moraru.

As for the construction sites for the industrial sector, they are all proceeding as usual, and while speculative development might register delays, preleases are going as usual. According to CBRE Research, there are approximately 600,000 sqm under construction, out of which 70% is pre-let.

newsroom@romania-insider.com

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