In the Spotlight

Started in 2010 as an online bookstore and grew into an online family mall. The retailer has developed a strong pick-up points’ network (where it also showcases some products) with 15 locations in Bucharest and another 19 in the country.

The online fashion shop which promotes Romanian designers was opened by local entrepreneur, Mirela Bucovicean, in 2010. Five years after, Molecule F opened a concept store in Promenada, the shopping mall from Bucharest belonging to NEPI.

Palatul Universul

An abandoned building in downtown Bucharest, which hosted a printing house and the editorial team of “Universul” newspaper in the inter-war glory years of the Romanian capital, was rehabilitated by an investor seizing the historic flavor opportunity of the property. The estate has become a “creative hub” and hosts an interesting tenant mix: the headquarters of BBDO advertising agency, Cumulus architecture office, a co-working space – Talent Garden, a cocktail bar, a contemporary dance studio, an art gallery, Beans & Dots coffee shop, Apollo 111 Bar & Theater.

In the picture – Palatul Universul, photo by Andrei Margulescu

In a wish to cash in from the effervescence on the real estate market, corporations have begun to sell their real estate assets to focus on the core-business:

• Telekom has sold to Forte Partners a land downtown Bucharest and plans to sell Tandem building located in the same area.
• OMV Petrom also announced plans to sell a building located in an area targeted by real estate investors – Aviatiei, near Barbu Vacarescu – Floreasca hub.

Given the impact of technology upon real estate, industrial sector is ranked number one for investment and development prospects in 2018, largely on the back of the growth in online retail sales.

“Technological change is clearly playing out in the retail sector, and as retail shrinks, logistics expands, as does the last-mile delivery convenience to the consumer”, says one global capital markets adviser.

Until recently, residential was seen by many institutional players as a niche sector, and for some, too specialist. Today, the industry appears less bothered by the obstacles to investment and increasingly swayed by the opportunities that could emerge from huge housing shortages across Europe. The Emerging Trends Europe survey reveals availability of affordable housing as one of the key social problems facing the industry in 2018 – more of a concern than environmental issues and mass migration.

Redevelopment is the most attractive way to acquire prime assets, thus translating into a low-risk strategy based on astute asset management and refurbishment rather than a hasty return to speculative development.

The greater importance attached to asset management reinforces the trend by institutional investors towards employing fewer and larger managers. Low returns and a lack of product in a late-cycle market have underlined the importance of “smart asset management”.

“We are not going to be able to generate the returns we want by buying assets and sitting on them,” says one pan-European investment manager. “We have to think about the management of the tenants, refurbishment and re-gearing.”

In Romania, Skanska is to implement the virtual reception concept in Campus 6 project

The rise of the flexible office sector and co-working stands out in Emerging Trends Europe. They are much more than simply property buzzwords but, as the interviews reveal, a workplace phenomenon whose influence has taken hold of the European industry in a profound way since last year’s report.

“As landlords we have to be more flexible,” says one convert to co-working. “Tenants are asking for shorter leases and break options. It requires a change in mindset and a willingness to take more risk.”
“Not everything is going to be WeWork,” says one value-add investor. “I still think there’s a huge amount of money to be made in traditional offices with larger occupiers. But the proportion of the market will grow for co-working, smaller companies, incubator space. Flexibility within buildings – the ability to sub-divide – becomes increasingly important, which comes back to obsolescence.”

In Romania, Impact Hub inaungurated a new premises last autumn in Vastint’s Timpuri Noi Square project.