Real estate deals reached approximately EUR 400 million in Romania last year, according to Jones Lang LaSalle’s (JLL) ‘Capital Markets Buletin Q4 2011’ study. The largest transaction recorded was the acquisition of the Europolis' portfolio at the regional level by CA Immo. Notable deals include the acquisition of City Mall in Bucharest by a local developer. On the office front, Bluehouse Capital completed the acquisition of Astoria Center, a deal worth some EUR 10 million.

“If the first half of 2011 was characterized by a significant advance in the discussions between institutional funds and vendors and transactions were advanced on all market sectors, the second half of 2011 was dominated by the instability of the global financial market and led to a ‘wait and see’ approach from these funds,” reads the study.

As the strong fundamentals were still in place (macroeconomic stability, healthy office demand and long term sustainable rental levels), these funds have resumed their activity and several larger transactions are on the way to be finalized in 2012. JLL expects investment activity in 2012 to increase over the levels witnessed in 2011 in Romania.

A large volume of debt will mature in 2012, and therefore, the refinancing demand is expected to increase. “As most of the loan agreements were signed in the boom years 2006 - 2007, the loan to value ratios have been breached for a large part of these loans, and owners are finding difficulties in filling in the capital gap,” shows JLL. In these conditions, the JLL advisors say that it’s possible for institutional developers to enter the market with “high quality projects”.

The volume of real estate deals in Romania declined year-on-year for the last five to six years, from EUR 1.9 billion in 2007. In 2008, the Romanian real estate market fell to about EUR 990 million.

Irina Popescu, irina.popescu@romania-insider.com