Romania real estate market still attractive

Rental properties

Recent articles

Romania’s richest man, Dinu Patriciu, is taking advantage of the turmoil among small, London-listed companies to build a pan-European investment empire....

Population's deposits barely see a rise, despite still high interest rates

Romanians are less and less willing to save or the incomes they have available for saving are dwindling, reveal data from the NBR, which point to the lowest annual rise for deposits in RON - of 15.5%....

Home » Press centre » Romania real estate market still attractive

By: Claudia Ariton | Date: 2008-04-15

Although the cost of construction is up, the yield for offices is down, and the average price per sqm for transactions went up six times in the last five years, the Romanian real estate market is still a top destination in terms of profitability. The ongoing maturing of the market, and the diversification of the supply after EU integration contributes to good competition in Romania, while countries like Serbia or the Ukraine, although unstable politically and economically, are cheaper, and are gaining ground for developers and investment funds.

"More opportunistic actors, such as investment funds, are looking into markets like Serbia and the Ukraine to get certain investment margins according to some preset parameters. Romania has become too expensive for them. However, other investors, in less aggressive funds, are still interested in Romania. The main problems with these funds with high financial power, such as German open funds, facing them now are that they have not completed an analysis of the Romanian market in terms of taxes or legislative, or have to follow certain parameters that make them buy high quality buildings, which are more advantageous at this time in Western or Central Europe, because they offer a more stable product, with lower country risk", explained for BBW Troy Javaher, business development director for capital markets with Jones Lang LaSalle.

On the same topic, Attilla Peli, land division director with Colliers International, emphasized that "this problem has been around for some time. True, some markets may be more profitable at this point than the Romanian market, but profit has to be associated with risk, so the analysis can be wrong. More than that, the demand on the Romanian market seems not to be met, and if capital is reoriented to other markets, the discrepancy between supply and demand could deepen, which would drive prices up, meaning profits would go up too, and capital could return to the market in a short time". Adrian Emanuel Nicolescu, corporate accounts real estate broker and business development manager, Euroest, believes that "a part of investors went to Serbia and the Ukraine before coming to Romania, others, with a wider vision, after getting very good profits in Romania, went to other emerging markets, as a strategic move to take advantage of possibilities for growth, without slowing or stopping the development they started in this market".

He said that, according to calculations, the price per sqm in Bucharest is around 1,500 Euro, having grown five times in the last five years. Peli said that the price per square meter in 2007 was around 615 Euro. "There are no clear statistics for five years ago - there weren't that many transactions, most were done in the good areas - but the price back then was probably around 100 Euro/ sqm, or even less", he said. Prices went up last year too, "for central areas proper for residential and office developments, prices went up 15 to 20% from 2006, said Silvia Stanescu, who works in the research department of Atisreal Romania. As a result, prices for luxury locations such as Kiseleff and Primaverii now fluctuate between 3,300 and 4,000 Euro/ sqm.

Even with falling yields and rising construction prices, Romania is still attractive. "The principle of supply and demand still applies - the demand for office space, for instance, is still higher than the supply, which means developers still want to build office buildings. Clear proof of this is the rise in rent lately. Yields will stabilize", said Peli. Nicolescu said that "for the residential sector, the demand is very high, and investors will still be interested as late as 2010. for the commercial sector, at the half of 2009, after scheduled deliveries, the total mall and retail space will be over 50% higher than the consumption of retail clients. For offices it is expected that the market will stabilize by the end of 2009, when supply and demand will balance out". Experts are optimistic about the market's attractiveness.

They expect supplies to grow and diversify. Silvia Stanescu, with Atisreal, said that after it reaches maturity, the Romanian real estate market will have macroeconomic stability, with growing purchasing power in the residential sector, and sustainability in the retail segment. Aris Tsouros, general manager, Epsilon Imobiliare, has good expectations from the market: "The Romanian real estate industry will continue to grow, and there are several causes. Macroeconomic indicators show a GDP growth of 7%, while salaries will fall in line with economic growth. The level of consumption will continue to attract significant foreign investment, which will also drive real estate development. Romania has had good growth in the last 5 years, and will continue to do so for at least another three.

There will also be a shift of focus from Bucharest to other large cities, such as Brasov, Cluj, Craiova, and Sibiu, which had good growth in 2007, like Bucharest before them, and they will offer great value to investors.". Javaher also expressed the conviction that this market, by its position and the level of demand, has advantages that investors cannot afford to overlook: "I am still very optimistic about the Romanian market.

The truth is - and this cannot be stressed enough - that the foundations are still strong. It has not drastically changed in the last few months. The demand is strong and growing, and the sector has the necessary workforce. In addition, Romania cannot be ignored: it is a regional hub". Nicolescu said the workforce is of good quality and talent: "Why did Ford and Nokia decided to invest here - and we all know the obstacles they had to face? The potential of the country is huge, and investors only have to bring in know how and finances. There are a lot of Romanian professionals that are as good as foreign ones, and all we have to do is keep them here. Let us not forget, now we are full members of the EU".

Source: www.bbw.ro

Dawn of the Romanian Empire

Romania’s richest man, Dinu Patriciu, is taking advantage of the turmoil among small, London-listed companies to build a pan-European investment empire.

Population's deposits barely see a rise, despite still high interest rates

Owners of Tractorul site ask banks for 100m euros

The first stage of development of the Coresi project on the 120 hectare site of the former Tractorul plant in Brasov will include a shopping complex with a 90,000 square metre lettable area, for which the owners of the project, the Centerra Capital Partn

Is relaxation of lending terms coming?

Bankers have become much more cautious when it comes to granting real estate loans since the beginning of the year, but now have to relax terms in order to find clients for loans.

Cheapest real estate fund: Lewis Charles is now worth less than 2m euros

British investment fund Lewis Charles, which had announced investments of around 200 million euros on the Romanian market, now has a capitalisation of 1.66 million pounds sterling (1.88 million euros), after the shares of the London Stock Exchange-listed

Piraeus asks shareholders to come up with 20m euros

The management of Piraeus Bank Romania proposed an over 20 million-euro capital increase to the shareholders, by capitalising part of last year's profit, as well as by a cash contribution.

Carrefour to open 2-3 hypermarkets in 2009

French hypermarket network Carrefour will reach 25-26 operating stores by the end of this year, in the wake of overall investments put at 60-80 million euros, half the value of expansion projects completed by the company last year.

Sun Plaza close to completion: Cora gets its designated space

French EMCT company, which is developing the Sun Plaza mall in southern Bucharest, is now almost done with the project, turning over the space allotted to the hypermarket in Sun Plaza and setting October 29 as the date to inaugurate the biggest shopping

Mortgage loans resume growth in April, while consumer loans continue to fall

Mortgage loans managed to resume growth in April - if the exchange rate impact is eliminated - after two consecutive months of decline, but bankers remain sceptical and expect fresh positive news before they can put their faith in a market rebound. Howev

Hercesa invests over 500 million Euro in Romania

Interested in responding to the high demand on the residential market, Hercesa Imobiliara, a real estate developer, has set a development plan for Romania that includes investing 500 million Euro for the construction of more than 5,500 apartments in the

Economic data: Romania

From the Economist Intelligence Unit Source: Country Data

Forecast: Romania Outlook for 2009-10

From the Economist Intelligence Unit Source: Country Forecast

Balkan blushes: Romania, Bulgaria, and the EU

BY THE polite standards of Brussels, it was quite tough. On July 23rd the European Commission issued critical reports on Bulgaria’s and Romania’s progress (or lack of it) in fighting corruption and spending European Union money. Yet after intense lobbyin

Mr Too Clean?

FIGHTING corruption in a country that tolerates it is a lonely job, and Daniel Morar may not have his for much longer. Intensely disliked by most of Romania’s politicians and vilified in the media, he reaches the end of his term as head of the Romania’s

The party is nearly over

IT HAS gone on splendidly for years, and the party isn’t quite finished yet. For a decade or more eastern Europe has benefited from exceptional (and mostly unforeseen) good fortune. Economic and political stability, including for ten countries membership

Stopping the rot

JUST another week’s news in eastern Europe: Latvia, after vehement denials, starts talks with the IMF; Bulgaria loses €220m ($286m) in promised payments from the European Union because of its failure to tackle corruption; and the European Bank for Recons

Mortgage loans resume growth in April, while consumer loans continue to fall

Study on the affordability of housing in Cyprus

Using data from the Cyprus Statistical Service and the Nicosia Land Registry for the years 1998-2008, Antonis Loizou & Associates analyzed the drivers behind the increase in real estate prices as well as the affordability of housing by locals.

Heitman Perspective: Central & Eastern Europe and the Financial Crisis

Stock investors now spend less time with companies’ income statements and more time with their balance sheets, looking for ticking debt bombs. In the same way, investors in international real estate must expand their analysis of countries beyond GDP grow

Land around Bucharest remains at 2008 prices, but plots for sale are smaller

The average price of land in the area surrounding Bucharest was of 353.4 RON/square metre in March, similar to that recorded in March 2008, but sellers now put up smaller areas.

Asmita Gardens, suspended for 20m-euro debt

The construction site of the 800-apartment Asmita Gardens residential project in Bucharest, which will consist of seven tower blocks with 16, 20 and 24 floors was suspended indefinitely by Austrian builder Strabag on Tuesday, as a result of Asmita Garden

Apartments 30 minutes away from Bucharest's centre are 20-25% cheaper

The average price of apartments on the outskirts of Bucharest - Drumul Taberei, Berceni, Vitan Mall and Crangasi - has fallen by over 20% this year. More than 20% declines of the year have been recorded in the 13 Septembrie and 1 Mai areas, as well, s

Fly-to-let: the best places to buy an investment property overseas

As fly-to-letters become ever more adventurous, which destinations offer the best prospects? As recently as a decade ago, who would have thought of buying a flat in Tallinn, Sofia or Prague?

Χρηματοδοτήσεις με μέτρο και στα Βαλκάνια

«Κλείνουν τις κάνουλες χρηματοδοτήσεων» και στα Βαλκάνια οι ελληνικές εταιρείες leasing, καθώς λόγω της εν εξελίξει παγκόσμιας οικονομικής κρίσης εφαρμόζουν αυστηρότατους όρους εγκρίσεων για συμβάσεις. Την ίδια τακτική, άλλωστε, εφαρμόζουν εδώ και δύο μή

Σόφια και Βουκουρέστι αναζητούν διέξοδο

Εκτιμήσεις ξένων τραπεζών αναφέρονται σε πιθανούς αναπτυξιακούς ρυθμούς της τάξεως του 2,3% για τη βουλγαρική οικονομία το 2009, ποσοστό συγκριτικώς χαμηλό, αλλά όχι και οικτρό…

Δυναμικό γ΄ τρίμηνο για την Cosmote Ρουμανίας

Επενδύσεις 600 εκατ. ευρώ αναφέρει η Cosmote Ρουμανίας στα τρία χρόνια λειτουργίας που συμπλήρωσε πρόσφατα. Σε ειδική εκδήλωση που πραγματοποιήθηκε στο Βουκουρέστι για τη συμπλήρωση τριών ετών από την επανέναρξη των δραστηριοτήτων της, η διοίκηση της επι

Αισιοδοξία για την ανάπτυξη της ρουμανικής οικονομίας

Αισιόδοξοι για τη συνεχιζόμενη ανάπτυξη της ρουμανικής οικονομίας, η οποία στο πρώτο τρίμηνο κατέγραψε ρυθμό 8%, είναι ο υπουργός Οικονομικών της χώρας και οι συνεργάτες του που επισκέφθηκαν την Αθήνα στο πλαίσιο παρουσιάσεων σε ευρωπαϊκές πρωτεύουσες.

Interest rate increases affect real estate projects

Real estate projects in Romania are the most sensitive when it comes to interest rates increases, particularly the office segment, which relies on the rent flow, according to Rasvan Radu, CEO of UniCredit Tiriac.

New hotels scheduled to open this year

This year will see over 16 new hotels open on the market, most of which belong to chains already established in Romania, such as Ramada, Golden Tulip and Continental.

Interest rate increases affect real estate projects

Niro Investment Group starts new projects in constructions

Niro Investment Group is getting ready to build together with the Chinese partners from Beijing Urban Construction Group (BUCG). Niro signed a long-term cooperation agreement with BUCG, and the new company will build Niro Towers and will assure the desig

Eurobank Properties: σύμβαση 9 ακινήτων

Οριστικοποιήθηκε η απόκτηση εννέα ακινήτων από την Eurobank Properties, συμφωνία που είχε ανακοινωθεί από το προηγούμενο καλοκαίρι, όταν είχε καταβληθεί και σχετική προκαταβολή 2,6 εκατ. ευρώ.

Ελληνικές τράπεζες με... «ξένα» δάνεια

Τα πιστωτικά ιδρύματα θα κάνουν περισσότερες χορηγήσεις, στα Βαλκάνια και την Αν. Ευρώπη, την επόμενη χρονιά.

Πειραιώς: νέα επένδυση real estate στη Ρουμανία

Tην εξαγορά της ρουμανικής εταιρείας ειδικού σκοπού (SPV) Intertrade S.L. έναντι 8 εκατ. ευρώ ολοκλήρωσε πρόσφατα η Trieris Real Estate Management Limited.

Controlling real estate growth

How private and public forces can best manage the chaotic boom in property development became the focus of a high-level seminar in Bucharest organised by The Diplomat - Bucharest, which brought together authorities and business to beat out some ideas.

Market overvalued says First Property

First Property Group, the Aim-listed asset manager, announced a rise in profits that it said justified its move out of the UK into eastern Europe. Financial Times

Romania thrives on European Union investment

Investment in Romanian property reached almost €500m (£349m) in the first half of this year, Jones Lang LaSalle research shows.

Μεγάλη αύξηση των ξένων επενδύσεων στη Ρουμανία

Σημαντική αύξηση παρουσιάζουν οι ξένες επενδύσεις στη Ρουμανία. Περίπου 8.000 επιχειρήσεις με ξένο κεφάλαιο ξεκίνησαν δραστηριότητα το πρώτο εξάμηνο του 2007 στη χώρα.

Norwegians buy 800 new apartments in Bucharest

Romania Ania Invest, a Norwegian investment fund, has acquired around 800 new apartments in five residential projects in Bucharest and around the city since the beginning of the year. The investors hope to achieve a 30-50% growth rate when the apartments

IMF: Real-estate prices will continue to grow in Romania

Foreign capital’s entry rate will not stagnate in Romania, so the real-estate prices in Romania will continue to grow, Juha Kahkonen, senior advisor within IMF’s Europe Department, has stated yesterday in Warsaw.

Οι τιμές πάνε πάνω στη Ρουμανία