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Real estate: DTZ: Romania attracts 0.5% of capital for real estate investments in Europe
The capital available for investments in commercial properties in 2014 amounts to 120 billion dollars, 6% higher than the one estimated a month ago. Less than 0.5% arrive to Romania according to a DTZ Echinox study. “Although less than 0.5% of overall capital attracted for real estate investments for the European area, we estimate a gradual increase of investors’ interest for Romania in the next years due to attractive profits which can be obtained in a relatively low risk climate,” said Marius Grigorica, senior business analyst at DTZ Echinox.
He showed that most of the capital available has in view real estate investment opportunities in secondary markets following profit reduction in mature Western European markets.“This could be a favorable context for Romania, with big chances to attract attention of big investors because of market size and of the recent improvement of macroeconomic bases,” Grigorica added.
At world level capital of real estate investments exceeds 340 billion dollars, on the rise by 6% compared to the level estimated 6 months ago.
The Asia Pacific area recorded the highest regional capital increase (11%) with over 90 billion dollars available to be invested in the area. But American continents remain the most important destination for investments with 130 billion dollars available for 2014.
The report is based on a DTZ analysis of data supplied by 3,000 individual funds. 55% of overall capital mobilized has in view investments in a single country, on the rise from 53% six months ago.
The US maintain the dominant position attracting 44% of the capital oriented toward a single country. China and Great Britain are the next countries of interest, with a share of 9% each, keeping the trend registered 6 months ago. In the Asia Pacific area Japan attracts a high capital level (6%) since funds continue to be tempted by the recovery trend and the improvement of liquidity in this market.
In Europe, about 60% of capital is oriented toward secondary opportunities, less than a third targeting the main ones. While most investors make efforts to secure the main market opportunities, DTZ anticipates an increase of funds’ activities which have in view secondary opportunities through investments in several markets and secondary locations in the future.
Contrary to significant increases of newly attracted capital, the study shows few changes about the main sources and directions.
Fund managers continue to dominate with 64% of available capital, listed companies and institutional investors holding 15% each. Investment funds concentrate on diversifying portfolios on different types of properties (77% of available capital).
From the 23% capital difference concentrated on a single type of property we notice an increase of interest for the retail sector, which represents now about 30% of the mentioned percentage, followed by the residential sector to which a fourth of funds is oriented.