Real Estate: Colliers: Interest in the local land market remains moderate

The first half of 2024 in the land market witnessed more the completion of transactions that had been initiated some time ago, rather than the start of new negotiations, as investor interest in land acquisitions remained relatively limited, according to Colliers’ report on real estate market trends for the first half of the year. The retail and residential sectors continued to be the primary drivers of market growth. Meanwhile, Colliers consultants observed a rise in speculative interest, with buyers seeking to acquire valuable land with long-term potential at attractive prices, either in anticipation of future price increases or in preparation for a favorable market phase to develop a successful real estate project.   Supply remains generous, with numerous portfolios currently available for sale. Retail developers maintain intense activity nationwide, focusing both on developing retail parks and on standalone stores operated by major retailers. Large plots of land suitable for mixed-use projects continue to have a significant impact in this sector. Meanwhile, residential developers have directed their efforts primarily towards Bucharest and its peripheral areas, as well as major cities across the country, but transactions are proving difficult to finalize due to uncertainties or blockages in urban planning. For the same reasons, some developers have decided to sell part or all of their land portfolios to focus resources on ongoing projects or other business sectors.   Other investors, such as CPI, are turning their attention to new opportunities/markets. Among the most significant transactions in the first half of the year was the sale of two plots of land owned by CPI: the former Rocar industrial platform, secured by One United (completion currently ongoing), and a 6-hectare plot in Sise?ti, purchased by Prima Development Group.   “Considering that several major transactions are in various stages of completion, and others have already been finalized in the first half of 2024, the total volume for this year will certainly appear quite good when we do the annual review. We continue to see several active developers seeking land with appropriate permits to quickly start projects, but this process is hindered by the limited availability of land meeting these criteria”, explains  Sinziana Oprea, Director of Land Agency at Colliers Romania.   Over the past year, there has been a clear distinction between urbanized land in good and prime locations and those marked by uncertainties regarding permits or in less attractive areas. Land with good potential continues to attract significant interest, and if it has the necessary urban documentation desired by developers, it sells at the asking price, without any discounts.   Colliers consultants anticipate solid results for the land market in 2024 and beyond, due to the interest from both traditional market investors and new players. The major ongoing infrastructure projects in many parts of the country also contribute to increasing interest in new real estate developments in emerging areas on investors’ radar. The completion of the southern section of Bucharest’s ring road (A0) and the highway connecting Ploie?ti to Pa?cani, both scheduled for next year, have already sparked a wave of interest in industrial and logistics projects along these routes.   These large-scale developments will stimulate economic growth and create jobs, thereby attracting other types of real estate projects, such as retail and residential. “We are seeing interest from new investors in the land market, including private individuals from sectors other than real estate, as well as interest in land intended for non-traditional uses, such as data centers, medical concepts, leisure/hospitality, student housing, showrooms, and more. In this context, assuming the economy remains relatively stable, we anticipate an increase in transaction activity starting in 2025. In Bucharest, the 2024 local elections failed to bring the necessary clarity to unlock the urban planning situation, leaving a climate of uncertainty as we await the new general urban plan (PUG). However, on a positive note, 2024 saw the issuance of several building permits in central areas, including protected zones, where developers have accepted stricter regulations. So, at least, things are starting to move forward”, concludes  Sinziana Oprea.