Romania


A member of the EU since 2007, Romania boasts a property market that has been on the up ever since. Liviu Tudor of the Romanian Association of Building Owners explains

In which sectors is Romania attracting the most interest from investors, and why?

By choosing Romania as a destination for developing businesses, investors have access to many advantages provided by our country. Some of these advantages are in relation to the market and location, as Romania is one of the largest markets in the Central and Eastern Europe (CEE) region.

There are also resource advantages, as a highly skilled labour force, speaking various languages, is largely available at competitive prices.

Political and legislative stability are also very important, as Romania is a member of the EU and NATO and has implemented the EU acquis communautaire.

Currently, Romania provides incentives for investments in the manufacturing and agro-industrial sectors, but also in research, development and innovation activities, and electric and thermal energy production and delivery, including energy efficiency and use of renewable energy resources. The industry sector is attracting the highest rates of investment, due to low land prices, skilled labour force, and availability of production capacities.

How attractive are the yields compared to other Central and Eastern European countries?

In Romania, at the moment the yield is around 7.5 percent, with a potential for compression to 7 percent in the coming years. Yields remain 150 to 200 basis points higher than in other CEE countries.

Compared to other CEE cities, for example Warsaw and Budapest, Bucharest offers attractive yields—prime office yields are around 7.5 percent in Bucharest, 6 percent in Warsaw and 7 percent in Budapest.

On another real estate field, yields of shopping centres are at around 7.75 percent in Bucharest, 7 percent in Budapest and 5.5 percent in Warsaw, while those on logistics and industrial properties are about 9.25 percent in Burcharest, 8.75 percent in Budapest and 6.75 percent in Warsaw.

Romania is on the map for many international investors. It has many development opportunities, and is becoming more important in the CEE in terms of transactional activity, catching up with the likes of Poland.

What has EU membership done to open up Romania as a market?

The main advantages for Romania as a result of the EU accession are in the social, political and economic areas. From a political-economic point of view, Romania benefits from free movement of goods, capital and work force. Also, being a part of the EU, Romania has access to European funds directed towards the development of the member countries.

By far, the most important advantage that the accession brought to Romania relates to the confidence given to foreign institutional investors by being part of the European set of principles and goals, including economic, political and social stability.

Romania is, without a doubt, a stable country in the CEE region and the EU membership has opened the doors for investors for whom stability and predictability in the long term is of utmost importance.

Among RABO’s aims is a harmonised European property market—what still needs to be done to achieve this at the EU level?

The Romanian Association of Building Owners (RABO) works closely with industry leaders and other local and EU-level organisations in order to ensure a harmonised framework for property investments, urban rehabilitation, new developments, real estate financing, energy efficiency, social inclusion and environmental protection.

Being affiliated with the European Property Federation (EPF), RABO’s purpose is to represent real estate owners, investors and developers, and, at the same time, benefit from great resources and know-how in the property markets across the EU. Throughout RABO we aim to give Romanian property owners a voice in Brussels and bring to Romania the best practices and solutions to the common challenges, developed at EU level.

Unity in diversity represents a long-term objective for EU institutions and RABO is committed to make the required steps for reaching this objective from the Romanian real estate market standpoint. From this perspective, we have a long journey in front of us to try to harmonise real estate practices throughout European countries.

In terms of common energy efficiency procedures and principles and environmental protection, the EU legislation has still got a long way to go in order to harmonise the real estate market across the 28 member states.

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