Romania has been on a state of alert since 15 May 2020, with limited restrictions compared to the previous State of Emergency, as all shopping centres, hotels, churches, museums, exhibition halls and public parks reopened by 15 June.
Following an increase in the number of new infections in October and November to around 10,000 daily cases, new prevention measures were adopted on 9 November, measures which helped in terms of decreasing the number of new daily cases to around 3,000 from mid-December onwards.
Several signs of recovery appeared as retail sales recorded a surprising 2.1% y-o-y increase during the first eleven months of the year, while construction works registered an impressive year-on-year increase of 17% in the January-November period. Moreover, a GDP growth of 4.5% is projected for 2021.
The industrial and logistics segment produced an outstanding performance in 2020 as the total take-up almost doubled compared to the 2019 figures while the new deliveries amounted to a 30% y-o-y increase.
The office and retail sectors were more impacted by the pandemic, both recording y-o-y decreases in terms of new supply. Consequently, several planned retail and office projects have been put on hold, while most of the launched developments are going forward as planned.
The investment market was also solid, especially considering the CEE/SEE context, as the Romanian market was the only one which recorded a growth in 2020 compared to 2019 (+28%).
There have been more than 11,000 confirmed cases of coronavirus in Romania so far and the country is currently under a State of Emergency until 15 May. An almost complete lockdown has been enforced in order to encourage social distancing during this critical period. The President announced that a relaxation plan will be considered after 15 May if the number of infected people decreases.
In the real estate market, the industrial sector has shown encouraging signs as both demand and supply were at almost similar levels compared to Q1 2019, a trend expected to continue going forward.
However, all retail projects have drastically reduced their activity in late March as a precautionary measure dictated by the current State of Emergency. Several scheduled deliveries have been postponed for the second part of the year.
Moreover, while the level of new office space delivered in Bucharest was similar to Q1 2019, the leasing activity recorded a 50% y-o-y decrease in Q1 2020.
The most relevant investment transaction in Q1 pertained to the CTP purchase of Equest Logistic Park in Bucharest, a transaction brokered by Cushman & Wakefield Echinox, as the total investment volume saw a 15% y-o-y increase. Otherwise some important transactions have been either postponed or cancelled altogether mainly as a result of the present climate of uncertainty.