Half of the real estate companies in Central Europe (49%) estimate that investments in the sector will increase this year, with only 19% expecting a decrease (compared to 51% in 2023), against the backdrop of an improved perception of growth potential in this market, according to the Deloitte Real Estate Confidence Survey for Central Europe 2024.

Moreover, 40% of the study participants anticipate an increase in market activity this year, compared to 15% a year ago, while the proportion of those expecting a decrease has decreased to 16%, from 57% in 2023.

In this context, investors intend to focus on new projects (31%) or on attracting funds for future placements (19%). A third of them expect their portfolio efficiency to improve, twice as many as those estimating a deterioration. The industrial sector continues to be perceived as the most competitive (31%), followed by the residential sector (21%).

Among developers, the most important trend in 2024 seems to be the reprofiling towards other segments of the market, considering that a quarter of them are considering such a change. This trend is most pronounced among office and retail space developers - three-quarters and half of them, respectively, state that they will focus on other sectors in 2024 (mainly mixed-use assets or rental residential projects).

Among the challenges facing developers this year, those related to financing (26%) stand out, followed by those involving land acquisition for future developments (23%), in view of the economic recovery, and marketing (18%).

"The slowdown in office market activity is also noticeable in Romania since 2023, and the transactions still ongoing focus on renegotiating lease contracts, with an emphasis on clause flexibility or extending the contractual period.

However, regarding retail projects, the local market differs from the regional one, as there are many ongoing projects and increased appetite for investments in this segment, driven by the prospect of inflation reduction and, implicitly, the increase in the population's purchasing power.

The industrial segment benefits from growth prospects, given the geopolitical situation, insufficient stock of such spaces at the national level, and the friendshoring phenomenon, namely the global and regional trend of relocation or construction of various production units in politically allied states," stated Irina Dimitriu, Partner Reff & Associates | Deloitte Legal, leader of real estate consultancy services at Deloitte Romania.

Deloitte has been conducting the Real Estate Confidence Survey for Central Europe since 2019 to gather professionals' perceptions in the field regarding market evolution in the region. The survey involves three categories of respondents: developers, investors, and real estate specialized consultants.

This year's edition mainly included players from Poland (33%), the Czech Republic (24%), Hungary (10%), while 24% of participants operate in multiple markets in Central Europe. (Photo: Dreamstime)