The tide is changing – investors tend to focus more on the Romanian and Hungarian market
According to Financial Times, investors that face a lower financial risk have started to venture more and more towards the Romanian and Hungarian markets, that have been overlooked in the recent past.
Capital flows from Central and Eastern Europe have begun to penetrate beyond the safety and stability offered by Poland and Czech markets and started to gain interest towards new markets such as Romanian and Hungarian ones, that have been neglected so far.
Globalworth fund is preparing a funding of EUR 200 million for investments in Romania but times are changing and investors that could enter the Romanian market in the near future could represent the end of a period where the competition was modest from this point of view, notes the Financial Times.
“At present, there is little competition in regards to the business field that interest us. Everybody is focusing on Poland and Czech Republic, and that is great for us, because we can target assets at a very attractive price. However if you believe in cyclical markets and global flows capital, Warsaw and Prague yields will drop to a level so low that investors will refocus towards our markets ” deputy general manager of Globalworth, Dimitris Raptis, for Financial Times
Most Globalworth assets are concentrated in Bucharest. Globalworth owns office buildings such as BOB BOC Tower Center International, City Offices, and projects such as Herastrau One Delhi One and Upground housing complex. The market value of these projects was estimated in December at 488 million euros, writes Mediafax
These conclusions are based on a strong growth in investments flows spotted last year in Central and Eastern Europe.
Russia has the largest market in the region in terms of real estate transactions, that increased by 40% last year. Poland takes the second place, with an increase of 9%. Except Ukraine, all the markets in the region have faced an increase in their percentage. In Ukraine, the value of transactions plunged to 41 million euros from 241 million euros in 2012, due to the politic and economic instability.
As Russia, Poland and the Czech Republic are still on top in terms of real estate transactions, investors that are facing a lower financial risk manifest a growing interest in markets located in Romania and Hungary.