Romania attracts the highest value of commercial property investments in SEE

Commercial property investments in Romania surged by 32% in 2011 – C&W.

Investments in commercial property in Romania surged by 32% y/y to USD 425mn in 2011, according to data from Cushman & Wakefield. Investment activity in 2012 is expected to increase further. The prime yield in the office and retail property sector stood at 9% and at 9.5% in the industrial property sector last year

Commercial property investments in Serbia plunge 38.1% in 2011 – C&W.

Investments in commercial property in Serbia plunged by 38.1% y/y to USD 88mn in 2011, according to data from Cushman & Wakefield. Investment activity in 2012 is expected to stay as in 2011.

Commercial property investments in Croatia down 13.6% in 2011 – C&W.

Investments in commercial property in Croatia fell by 13.6% y/y to USD 289mn in 2011, according to data from Cushman & Wakefield. Investment activity in 2012 is expected to stay the same as in 2011. The prime yield in the office sector was 8%,  the retail sector stood at 7.75% and  the industrial property sector at 9.50%.

Investments in commercial property in Bulgaria skyrocketed 916.34% y/y to USD 257mn in 2011, according to data from C&W. Investment activity in 2012 is projected to remain flat. The prime yield in the office and retail property sector stood at 11% and at 9.5%; in the industrial property sector at 12%  and the outlook for 2012 hints growth.

Romania was the largest market for new commercial property investments in SEE, according to the Cushman & Wakefield report International Investment Atlas Summary 2012. The other SEE countries for which data was available were Bulgaria, Croatia and Serbia. Commercial property investments in Romania totalled USD 425mn in 2011, which was  32% more than in 2010. Croatia ranked second although it had dropped compared to 2010. The third biggest market, Bulgaria, registered a 916.3% growth, the highest among all countries included in the report. Serbia was the region’s least attractive market with investments plunging by 38.1%.

These are only a few of the insights in the new Intellinews Report : SEE Construction and Real Estate Report. Learn more and purchase now>>

 

Rise in Romania’s public debt eases as fiscal consolidation advances.

Romania’s public debt edged up a modest 0.1pps ytd to 34.8% of GDP [ESA methodology] at the end of October 2012 – after it nearly tripled since the end of 2008. The domestic public debt expanded sharply by more than three times while the external public debt advanced at a slower pace yet still more than doubling. Notably however, a large part of the domestic debt is denominated in foreign currency – actually more than half of it [54.8% at the end of October].

Romania public debt

Much more in the EMD report: Romania Country Report

 

Romania’s central bank admits inflation slips outside target band by end-2013

Romania’s central bank has raised the year-end inflation projections by 1.9pps to 5.1% y/y for 2012 and by 0.5pps to 3.5% y/y for 2013, according to its Quarterly Inflation Report released on Nov 7. The IMF expert team visiting Romania expressed concerns with the price stability.

Consumer price inflation eased to 5% y/y in October after peaking to 5.3% y/y in September, the statistics office reported. CORE2 inflation was 3.2% y/y in September. The average consumer prices in the 12 months ending October were 3.1% up y/y, accelerating from 3% y/y growth registered last month.

 

 

 

 

PLUS:
FOCUS STORY: Are there grounds for euroscepticism in Romania?

This is only a small extract of the insights in the new Intellinews : Romania Country Report; read more and purchase now>>

 

Construction industry in South-eastern Europe still struggling to emerge from eurozone debt crisis

Construction activity contracted in most counties in Southeast Europe in the first half of 2012, continuing a trend from 2011 as the ongoing instability in the eurozone, the major market for the region’s exports, is forcing developers to delay  new construction projects. The outlook for the sector remains gloomy as the sovereign debt crisis in the eurozone is denting demand for eastern European exports, leading to a fall in investments. Increased public spending on infrastructure last year helped the construction sector somewhat offset  the decline of commercial and residential building activity but  funds for large infrastructure projects this year have been cut, following government’s efforts to reduce fiscal deficits  by scaling down expenses.

Construction activity in most SEE countries, for which data is available, declined in the first half of 2012, continuing a trend from 2011. The only gainers were Romania and Serbia.

Construction output in EU27 down 6% in Q2 2012

Data from Eurostat showed that construction output in the European Union countries decreased by 6% y/y and by 1.2% q/q in the second quarter of 2012. Of the three EU member states included in this report, Slovenia and Bulgaria witnessed a drop in construction output, while production in Romania grew at its fastest annual rate in more than a year.

Investments in retail property dominated the real estate market this year with almost all SEE countries adding new shopping centre space.

Activity on the office property market remained strong with most of the SEE countries adding new space. Expectations  this year are for stagnation in Albania and  growth in Bulgaria, Croatia and Romania. Regarding the residential property market, home prices increased in Albania, Bosnia, Croatia and Slovenia but fell in Bulgaria, Macedonia, Moldova, Montenegro, Romania and Serbia.

Sofia was the leader among SEE capitals adding 77,000 sq m of new office space in the first half of 2012, data from real estate consultancy Colliers International showed. Bucharest and Belgrade followed, each adding 40,000 sq m to their office stock in H1.

This is only a small extract of the insights in the SEE Construction and Real Estate report; read more and purchase>>

 

Romania’s economy wears weary outlook

Romania’s economy increased by 0.7% y/y in H1 and will end with  negative for the year, less than -1%.  Bullish expectations were ruined by  poor use of EU funds and by  below-average agricultural production. The IMF and the government expect a much stronger advance in 2012 of 2.5%, according to the Fund’s World Economic Outlook. But even this will not help the country return to  pre-crisis 2008 GDP levels.

Romania’s statistics office revised the estimate for the country’s Q2 GDP to 1.1% y/y, down from 1.2% y/y previously announced on September 6, according to the newly introduced T+95 estimate. The adjustment is minor and does not send positive signals for the country’s economic growth,  already expected to slow  in H2.

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Romania’s GDP mirage: fact or fiction?

Romania’s seasonally-adjusted GDP edged up by 0.5% q/q in Q2, after it has stagnated for three years around the same level. Against the past quarter, the domestic demand strengthened robustly driven by both consumption (1.6% up q/q) and gross fix capital formation (gfcf, 4.4% up q/q). On the opposite, the external demand weakened visibly by 1.4% q/q. The imports edged up by 1.2% q/q contributing, besides the export’s weakening, to the deterioration of the external balance.

GDP and main elements by utilisation, quarterly, seasonally adjusted [2000=100]

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A quick peek into Romania’s economy and banking figures

The stock of provisions held by the Romanian banks increased by RON 3,161mn (EUR 722mn, or some 0.9% of their assets) in the first quarter of 2012, according to IntelliNews calculations based on the central bank data. Romania’s non-performing loans ratio reached 15.88% at the end of March, up from 14.33% at the end of 2011 and 12.71% at the end of March 2011. The loan loss provision cost thus neared the record level of EUR 747mn registered back in the second quarter of 2010, marking a visible deterioration from the moderate EUR 171mn provision cost in Q4/2011 or the average quarterly provision cost of EUR 416mn last year.

The banks derived an aggregate profit of EUR 28mn in Q1, according to IntelliNews calculations. The aggregate profit was close to zero in the final quarter of last year, according to adjusted data, while the banks incurred losses of EUR 181mn in full 2011 – compared to a combined loss of EUR 79mn reported the under preliminary [unrevised] data. The Romanian banks also posted an aggregate loss of EUR 123mn in 2010.

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Fiscal slippage risks remain high in Romania

Public debt service surged by 161% year over year in April and the co-financing also surged by 106% year over year as the government had to cover from own funds the sluggish payment flow from the EU to keep the projects on track. The government hiked the year-end cash deficit target to 2.2% of GDP from 1.9% previously, but meeting the new target is very unlikely.

The first-quarter deficit target was met only due to unsustainable policies – companies were forced to pay in advance their profit tax for the quarter, while the payment arrears of the central and local governments increased, the country’s independent fiscal supervisory body explained.

These are only a few of the insights from the IntelliNews Romania Country Report, May 2012. Read more and purchase>>