RSS
Real estate: Rents for offices may go up in Romania
Companies from the real estate field expect a rent increase in the local office market in the next quarter, for the first time in four years, considering the growing difference between demand and offer for available offices.“Partly because the pre-rental activity in the office sector, the tenants’ confidence is at the the highest level registered compared to the same period of 2011, while the demand for offices remains positive and sensibly higher than the increase expected from the office area available in the near future. The difference between the two grew in the last quarter, which led to a sudden increase of expectations on the evolution of rents in the following quarter. This positive trend has been registered for the first time in the last four years,” according to the results of an opinion poll made by The Royal Institution of Chartered Surveyors Romania- the Royal Institute of Credited Inspectors (RICS) on 1,000 companies in the real estate field from the whole world.
The participants in the opinion poll consider that the rental market and the degree of occupancy in the office market in Romania is consolidating after a period when interest dropped in the last three years.
“The impact of good results recorded by the farming and industrial sectors helped the Romanian economy to register a 3.5% increase of GDP in 2013, a thing reflected by the positive feeling of the real estate market in quarter 1, 2014,” said Ovidiu Prunea, from RICS Romania.
On the other hand, the situation is more temperate for investments generating income. The poll confirms the fact that the investment demand has continued to grow (+29%) although more modestly than in the previous two quarters (60% and 40%). Moreover, expectations for the increase of active value in the next three months have dropped.Despite the low positive level, the general tendency show one of the most optimistic prospects in the last three years. The expectation index for the increase of investment value in the next 12 months shows a significant improvement of 40%.
The opinion poll also analysed the outlook of real estate companies on non-performing properties in the local market.Respondents consider that although in the first quarter the demand for buying non-performing properties also called distress properties, remained balanced by the offer, in the near future more financial institutions will get large portfolios of non-performing shares, substantially increasing offer.
“The wish of financial institutions to recover invested capital, difficulties in financing new purchases, short term political uncertainties in this election year are reasons why expectations for the increase of investment value in this field are low,” said Nicoleta Radu, from RICS Romania.
The poll also indicated that both the investors’ demand and offer in the investment share market grew in the first three months, although there are difficulties, the demand and offer increase rate for real estate investment shares remain low compared to the last 6 months.
RICS is considered a supreme world organization for professional attestation in the real estate, construction and associate environment aspects.