Adapting

to Thrive
Romania Market Outlook 2024

31 January 2024
Romania Real Estate
Market Outlook 2024
Insights Transformation, adaptation and
& Trends 2024 search for opportunities in a new
real estate era

31 January 2024
Retail Market
Outlook
 Meet #RetailMostTrustedAdvisors

Shopping Centre Leasing Agency

Carmen Ravon
Ramona Hirnea Head Of Retail
Leasing Director CPI Portfolio &
Leasing Manager Promenada Tg.
Occupier CEE
Mures

Stefan Degeratu Adela Tamas Selma Ali

Leasing Manager Leasing Manager Specialty Leasing
Sun Plaza VIVO! Cluj-Napoca Manager Sun Plaza
Adina Chiriac Cristina-Maura Toros Madalina Sava
Leasing Manager Senior Retail Consultant Retail Consultant

Ana-Maria Stoian Daniela Negip Monica Potfalean Ana Rosu

Leasing Manager VIVO! Specialty Leasing Specialty Leasing Assistant
Pitesti & VIVO! Baia Mare Manager Manager/VIVO
Cluj Napoca

Confidential & Proprietary | © 2024 CBRE, Inc. 4

 RETAIL MARKET

Retail Romania 2023

Remarkable
Events
CARREFOUR AQUIRES AHOLD DELHAIZE MITISKA REIM SALES LEFTIES OPENS FIRST LARGEST RETAIL
LOUIS DELHAIZE (CORA) AQUIRES PROFI ITS RETAIL PORTFOLIO STORE IN ROMANIA DEVELOMENT IN CEE
Merge & Aquisition Merge & Aquisition Retail Transaction New Market Entrance Promenada Craiova

10 hyper &
9 supermarkets
1,654 24 4,300 64,500
Profi Stores Retail Parks (€ 219M) SQ M SQ M

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 RETAIL MARKET

251K
SQ M DELIVERED
23
PROJECTS DELIVERED/
2023 Romania: record new supply after 2009 3X MORE THAN 2022 EXTENDED
generated by rapid growth of the retail parks Retail Scheme GLA (sq m) Type
Promenada Mall 63,700 Shopping Center
AFI Arad Retail Park 29,400 Retail Park
5000K
Carolina Mall 29,000 Retail Park
Retail Parks, Bucharest
Shopping
40% 4500K Cosmopolis Plaza 16,300 Retail Park (ext.)
Center, 60% Regional Cities
One Cotroceni Park 15,000 Retail Park
4000K Cub Center 10,000 Retail Park
Annabella Retail Park Horezu 10,000 Retail Park
3500K
Funshop Park Vaslui 9,975 Retail Park
Bucharest,
3000K
Aurora Ramnicu Valcea 8,800 Retail Park
29%
71% Funshop Park Mosnita Noua 8,500 Retail Park
Regional
Cities, 71%
2500K Giurgiu Shopping Park 7,000 Retail Park
Aurora Mall 7,000 Retail Park
2000K
Funshop Park Hunedoara 6,260 Retail Park
59%
Irimia's Shopping Center 6,000 Retail Park

4.34M
1500K
Brasov Retail Park 5,212 Retail Park
41%
1000K Joy Calafat 5,165 Retail Park
sq m 29% Mall Alba 5,000 Shopping Center (ext.)
500K
62% Slobozia Value Centre 4,300 Retail Park (ext.)
MODERN STOCK 38%
Vatra Dornei Retail Park 2,500 Retail Park
Modern Stock Shopping Center Retail Park
Prima Shops 2,000 Retail Park
Confidential & Proprietary | © 2024 CBRE, Inc. 6
 RETAIL KPI´S

10%
0%
-10%

Visitors' -20%
-30%

evolution -40%
-50%
CEE average vs 2019
-60%
-70%
-80%
-90%

CEE Europe

Sales 40%

evolution 20%

CEE average vs 2019 0%

-20%

-40%

-60%

-80%

Source: CEE Europe

CBRE European Shopping Centres Performance Index

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 RETAIL MARKET

Reduced purchasing power due to rapidly rising inflation 83%

Concerns regarding Staffing 55%

the retail market Financial obligations (e.g. wages and rents) 54%

Q: What are retailers Costly financing (high interest rates) 30%

concerns regarding the Slow pace of sales recovery 30%
retail market in 2023?
Change in consumer confidence/preferences 23%

Supply chain issues 19%

Market competition 16%

Delayed resumption of cross-border travel 14%

Reduced demand for in-store shopping 13%

Other 9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Source: CBRE Research

Confidential & Proprietary | © 2024 CBRE, Inc. 8

 RETAIL MARKET
18

POLAND
16
Central Europe CZECH REP.
e-commerce 14

12

ROMANIA
10

E-commerce penetration rate,

8
2015-2019 trend and actual HUNGARY

Trends
4
Actual

Pre-pandemic 2

0
Q3 15

Q3 16

Q3 17

Q3 18

Q3 19
Q1 15

Q4 15
Q1 16

Q4 16
Q1 17

Q4 17
Q1 18

Q4 18
Q1 19

Q4 19

Q2 20

Q2 21

Q2 22

Q2 23
Q3 20

Q1 21

Q3 21
Q4 21

Q3 22
Q2 15

Q2 16

Q2 17

Q2 18

Q2 19

Q1 20

Q4 20

Q1 22

Q4 22
Q1 23

Q3 23
Q4 23
Source: CBRE Research, Euromonitor.
EUR values, fixed 2022 exchange rates.

Confidential & Proprietary | © 2024 CBRE, Inc. 9

Confidential & Proprietary | © 2024 CBRE, Inc. 10
 GDP GROWTH

Romania 4.0%
Romania economic Escalation of
growth will outperform CEE 2.3% Geopolitical risk
that of the Euro Area
and CEE Spain 1.4%

Portugal 1.3%

GDP growth 2024 (% annual)

France 0.6%

Belgium 0.6% PNNR

2026
Euro area 0.5%

Italy 0.4%

Germany -0.2%
Source: CBRE Data Science ( House View Jan 24)

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 RETAIL MARKET CZ HU PL RO SK
6.0%

4.0%

2024F
Retail Spending 2.0%

growth revival
0.0%

-2.0%

CEE countries amongst -4.0%

top performers
-6.0%

-8.0%

-10.0%
2023

F2024
-12.0%

Confidential & Proprietary | © 2024 CBRE, Inc. Retail spending within a location made by residents, commuters who work in the area, or people travelling into an area for shopping. This measure is underpinned partly by the spending power of residents (i.e. the population-based measure) but also by the presence of retail outlets in that location. This means that when looking at small areas (e.g. NUTS3 12
regions) the two measures can be quite different. For example, a city centre might have high location-based retail sales (as there are many shops, with workers and visitors spending money in the area) but relatively low population-based spending as few people live there. Includes both in-store and online spending.
 What will
+9.7% increase of sales
happen in 2024?
Forecast Retail Sales YoY variation | Further expected
Romania & Eurozone | 2015 =100 growth until 2027
20.0%
20%
Eurozone

Romania 15.7%

15%

10.4%
9.7%
10% 9.1% 8.4%
% p.a.

7.6%
7.1%

5% 3.7% 4.2%
2.4% 3.8%
2.8% 3.1%
1.8% 3.3%
3.4%
-0.9%
0%
2019 2020 2021 2022 2023 F2024 F2025 F2026 F2027

-5%

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 RETAIL MARKET
20.0

Inflation to gradually drop

2024F in core 5 CEE countries
Prognosis for 15.0

CPI Inflation 2024F 2025F 2026F 2027F

(annual averages)
Czech Rep. 2.4% 1.6% 1.3% 1.2%
10.0

Eurozone inflation Hungary 5.6% 4.3% 2.6% 2.6%

spectacular decrease after
the 2022 peak, in 2024
getting closer to the 2.0% 5.0
target and for 2025
Poland 6.0% 4.8% 2.0% 1.7%
estimated even below.

0.0 Romania 6.7% 4.6% 2.5% 2.2%

2020

2021

2022

2023

2027F
2024F

2025F
2013

2014

2015

2016

2017

2018

2019

2026F
Slovakia 2.5% 1.6% 1.7% 1.8%
-5.0

Confidential & Proprietary | © 2024 CBRE, Inc. 14

 RETAIL MARKET

2024 Pipeline

258 K TOTAL
SQ M
TO BE DELIVERED 20 RETAIL
PROJECTS
5 RETAIL
PROJECTS
EXTENSIONS

City Retail Scheme GLA (sq m) Type City Retail Scheme GLA (sq m) Type
Pitesti Arges Mall 52,100 Shopping Center Bucharest Fashion House Pallady 5,727 Retail Park (ext.)
Pitesti Shopping Park Pitesti 22,500 Retail Park Sibiu Prima Shopping Center 5,500 Retail Park
Focsani Aurora Focsani - phase 1 16,500 Retail Park Stefanestii de Jos Galerie Comerciala Fan Courier 5,184 Retail Park
Buftea Buftea Retail Park 15,500 Retail Park Iasi Mall Moldova 5,000 Retail Park (ext.)
Suceava Iulius Mall Suceava 14,000 Shopping Center (ext.) Hunedoara Hunedoara Retail Park 5,000 Retail Park
Giurgiu Aurora Giurgiu Shopping Center 13,500 Retail Park Tulcea Tulcea Retail Park 5,000 Retail Park
Vaslui Aurora Vaslui Retail Park 13,500 Retail Park Sinaia Galeria Comerciala Sinaia 5,000 Retail Park
Lugoj Prima Shops Lugoj 12,000 Retail Park Timisoara Esquire Commercial Gallery 4,000 Retail Park
Satu Mare Prima Shops 11,800 Retail Park Tulcea Shopping Park Tulcea 3,600 Retail Park (ext.)
Brasov Shopping Park Brasov 11,623 Retail Park Bucharest Lemon Retail Park 3,000 Retail Park (ext.)
Calarasi Aurora Calarasi Retail Park 10,000 Retail Park Bucharest Galerie Comerciala Fizicienilor 2,400 Retail Park
Orastie Nest Orastie 7,400 Retail Park Ocna Mures Centru Comercial Ocna Mures 1,500 Retail Park
Arad Funshop Park Vladimirescu 7,000 Retail Park

Confidential & Proprietary | © 2024 CBRE, Inc. 15

 RETAIL MARKET

Romania
Confirmed
New Entries
2024

CEE Country 2017 2018 2019 2020 2021 2022 2023

New Entries Czech Rep. 41 34 20 23 38 35 32

2017-2023 Hungary 12 15 11 0 5 6 6

Romania 17 24 14 12 2 17 5

Poland 6 16 18 9 10 5 16

Slovakia 11 4 4 0 2 0 5

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 1999

25 th

anniversary FIRST MALL

in Romania
Bucuresti Mall — by Anchor Group
 Co-tenancy Medtail occupiers Positive retail Occupiers explore larger F&B and Discount Fashion & apparel
requirements are are expending. leasing sentiment. stores but not shying retailers' appetite retails – key source
being reconsidered. to consolidate to expand. of leasing demand.
to best locations.

AMERICAS EUROPE APAC

Retail leasing
market trends

Confidential & Proprietary | © 2024 CBRE, Inc. 18

 AI Low Vacancy Rate

2024
Green Leases Downsizing of
Food Anchors
Development
of Medium /
Small Cities
Refurbishment
& Retenanting
Pressure on
Occupancy Costs
TRENDS

F&B GLA Fight for

to Increase Footfall
Industrial & Logistics
Outlook
 INDUSTRIAL & LOGISTICS MARKET 2023 Romania Modern Stock By Region
Bucharest:
Bucharest, Ilfov county
& proximities
3%
Industrial Regions 9%
West/North West:
Caras Severin, Timis,
Arad, Cluj, Bihor, Salaj,
Maramures, Satu Mare
counties

492K € 4.5 15%

South:
Mehedinti, Gorj,
Valcea, Arges,
sq m sq m / month West/North
East/North
Dambovita, Prahova,
West Buzau, Braila, Tulcea,
DELIVERIES 2023 HEADLINE East
Ialomita, Olt, Dolj,
Central Calarasi, Giurgiu,
Teleorman, Constanta
49% counties

7.2M 4.9%
Central:
South Bucharest
Hunedoara, Alba, Sibiu,
Brasov, Covasna,
Harghita, Mures,
sq m Vacancy Bistrita Nasaud
counties
MODERN I&L STOCK Rate
East/North East:
24% Galati, Vrancea, Vaslui,
Bacau, Neamt, Iasi,
Suceava, Botosani
conties

Confidential & Proprietary | © 2024 CBRE, Inc. 21

 INDUSTRIAL & LOGISTICS MARKET

€ 5.50
sq m / month
CEE Industrial PRIME RENT

& Logistics POLAND

Prime Rents
€ 5.75
sq m / month
PRIME RENT

€ 7.55
sq m / month
SLOVAKIA

PRIME RENT
CZECH REP.
€ 4.50
sq m / month
PRIME RENT

€ 5.60
sq m / month
ROMANIA

PRIME RENT
HUNGARY

Confidential & Proprietary | © 2024 CBRE, Inc. 22

 I&L MARKET

Logistics
Coverage
3PLs

Confidential & Proprietary | © 2024 CBRE, Inc. 23

 I&L MARKET

Logistics
Coverage
3PLs
Food Operators

Confidential & Proprietary | © 2024 CBRE, Inc. 24

 I&L MARKET

Logistics
Coverage
3PLs
Food Operators
Fashion Operators

• Acimoda
• Boutique Mall
• Brands International
• Decathlon
• Emag
• Fashion Days
• Grupo Numero 1
• Kalapod
• LPP Romania Fashion S.R.L.
• Miniprix
• Modivo / Epantofi
• Otter
• Tefron
• YKK

Confidential & Proprietary | © 2024 CBRE, Inc. 25

 Key takeaways
2023 a better E-commerce growth Retail sales growth Continuing upward
year than any expected to continue in a will benefit from trajectory of footfall
forecast moderate pace falling inflation and turnover levels
predicted 12 compared to the pandemic, and rising of real is expected for the
months ago as consumers demonstrate income year 2024 as well
higher propensity to shop in
stores

Confidential & Proprietary | © 2024 CBRE, Inc. 26

Investment Market
Outlook
 CEE INVESTMENT MARKET

CEE – the cold shower of 2023

9%
Baltics
€ 18 B
16.5B 16.5B
€ 16 B
-50% 31%
€ 14 B 13.4B 13.3B YOY Poland

11.9B 20%
Czech Rep.
€ 12 B
10%
Slovakia
€ 10 B

€8B
6.7B 7%
Hungary
€6B 7%
Romania
€4B

16%
€2B

0 SEE
2018 2019 2020 2021 2022 2023

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 ROMANIA INVESTMENT MARKET

Romania: Retail outperformed Office for the first time Office

Hotel
Retail
Mixed-Use
Industrial
Other
100%
€ 1,4 B
1,400 -60% 5% 12%
1,25B 7%
YOY 90% 7%

€ 1,2 B 4%
1,200 16% 14%
80% 30%
1B 70% 33%
24%
€1B
1,000 0.94B 0.92B
60%
€ 800
0.8 B 19%
50%
57%
€ 600
0.6 B 0.58B 82%
0.5B 40%
74%

30% 62%
€ 400
0.4 B 55%
45%
20%
€ 200
0.2 B
10% 17%

-0 0%
2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023

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 ROMANIA INVESTMENT MARKET USA Belgium Cyprus
3% 2% 3%

Investors’ Country of Origin

Czech Rep.
Local Foreign 12%
Germany
2%

2023
Greece
4%
50%
Israel
UK 3%
77% 77% 75% 77% 44%
88% Lithuania
4%

50%

25% Romania
23% 23% 23%
23%
12%

2018 2019 2020 2021 2022 2023

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 INVESTMENT MARKET

SHOPPING CENTER INDUSTRIAL - LOGISTICS OFFICE

Prime Yields Country City Q4 2023 YoY Change (bps) Q4 2023 YoY Change (bps) Q4 2023 YoY Change (bps)

CR Prague 6.35 0.10 5.00 0.25 5.40 0.60

HU Budapest 6.75 0.25 7.00 0.75 6.75 0.75

PL Warsaw 6.50 0.25 6.25 1.00 5.85 0.60

RO Bucharest 7.75 0.50 7.75 0.40 7.75 0.75

SK Bratislava 6.50 0.25 6.25 0.50 6.00 0.50

POLAND

CZECH REP.

SLOVAKIA

HUNGARY

ROMANIA

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 INVESTMENT MARKET
50%

45% All EMEA CEE

45%

ESG properties are

with up to 10% more 40%

valuable in the eyes 35%

of CEE investors 30%

25% 24%
Q: What is the price premium you
would assign to an ESG asset 20%
compared to a non-ESG asset?
15%
15%
12%
10%

5%
3%

0%
Source: European Investor Intentions Survey, CBRE
Research, December 2023 Less than 5% 6% - 10% 11% - 15% 16% - 20% 20%+

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 INVESTMENT MARKET
60%
CEE
Germany
UK
81% of Investors plan 50% All EMEA
to maintain or increase 47%

their purchasing activity

in 2024 in CEE. 40%

34%

30%

Q: Compared to 2023, do you expect

purchasing activity in 2024 to be
higher, lower, or the same?
20%
16%

10%

3%

0%
Source: European Investor Intentions Survey, CBRE Buy more About the same Buy less No intention to buy
Research, December 2023

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 INVESTMENT MARKET

51%
Mismatch in buyer and seller expectations
CEE: Fear of economy,
financing & geopolitics top
the agenda for investors. Rates to remain higher for longer
56%
Inflation is less a concern.

51%
Tighter credit availability and loan terms

Q: What are the major challenges

facing real estate investment in
2024?
32%
Uncertain geopolitical landscape

23%
Fear of a recession

Source: European Investor Intentions Survey, CBRE

Research, December 2023 CEE All EMEA 0% 10% 20% 30% 40% 50% 60% 70%
Confidential & Proprietary | © 2024 CBRE, Inc. 34
 3 key trends
shaping Retail
Investment
Continued resilience Pressure from banks Consolidation will
in the leasing market is still limited, continue in 2024,
suggested by early pointing towards focusing mainly on
indicators. refinancings. the retail parks space.

Confidential & Proprietary | © 2024 CBRE, Inc. 35

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2024 Romania Real Estate

Market Outlook

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