The National Institute of Statistics reported that during Q3 2009, the Romanian economy contracted only 7.1% (y-o-y), an improvement over the contraction of 8.7% in Q2 2009. The main contributors to the Romanian economic downturn were soft retail sales and a weak construction sector.
However, several key economic monitors forecast measured yet clear improvement. Business Monitor International Viewa€™s January 2010 Report cites: a€œThe Romanian economy appears to have passed the worst. The recovery will be weak and fragile, reflecting statistical base effects as opposed to a fundamental improvement in demand conditions.a€
As the year 2009 came to the end, economy statistics reflected
the positive signs in Russian economy that we witnessed
during the last few months. In general the economy
remained volatile, the realistic outlook to its current conditions
and future growth took over from too optimistic to too
pessimistic forecasts at the beginning of the year and midyear
fruitless discussions about U-V-W- or L-curved economy
development.
By the end of Q3 2009 GDP volume amounted to approx.
US$ 356 bn, showing 8.9% YoY contraction (compared to a€"
10.9% YoY contraction after Q2), Q2 growth was 13.8%
(compared to 7.4% Q2/Q1 growth).
The underlying fundamentals of the Romanian office market
remain weak. High volumes of development completions over the
final quarter of the year contributed to the vacancy rate increasing
sharply. Take-up remained subdued, but was higher in the final
quarter. The supply and demand imbalance continues to impact
on prime rents, which were generally down across the country.
Annual take up was down by 18.5% on 2008, although leasing
activity in the final quarter of 2009 accounted for nearly half of the
annual total. Overall sentiment remains depressed and occupiers
are still taking time to make decisions as the market remains firmly
tipped in their favour.
Beyond the turmoil of 2009, the new year will provide
many opportunities for investors to buy assets in the
Romanian market. The low liquidity levels of 2009 and the
less intense competition for assets led to adjustment of
expectations by vendors and indicate towards a bottoming
out in the market.
The forecasted return to growth of
the economy, the long-term undersupply of stock in
occupational markets and the return of banksa€™ support are
the primary reason for an up-turn in transaction activity.
Investors who will be first on the market will benefit most.
Paris is no longer among the top five most expensive office locations in the world, as London West End entered 2010 as the worlds most expensive city to occupy office space in, according to DTZs latest Global Occupancy Costs survey.
Ranked fifth in last years survey, Londons West End has taken the number one spot, displacing Tokyo and jumping above Paris, Dubai and Hong Kong, which were ranked second, third and fourth. Paris and Dubai have now fallen from the top five to take sixth and eleventh place respectively, whilst Hong Kong stays put in fourth place.
