Romania Real Estate Report Q3 2012

The Romania Real Estate report examines the Commercial Office, Retail and Industrial segments throughout the country in the context of the April 27 government collapse.

With a focus on the principal cities of Bucharest, Brasov and Cluj-Napoca, the report covers the rental market performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the eurozone crisis on a market already characterised by austerity. In line with such an outlook, we see similar stable, though unexciting growth in rental rates in 2012, with supply and demand largely in balance. The retail sector can be considered an outperformer, with internationals constantly entering and many looking to expand their businesses out of the major cities.

Key Points

New construction projects are beginning to emerge and activity in the building industry will pick up through the rest of the forecast period.

In July 2011, the Fitch agency raised Romania’s credit rating, bringing it back into the range recommended for investments.

The country remains financially fragile and the supply of credit may prove a limiting factor to expansion, both in the economy overall and more particularly in the real estate sector.

The eurozone’s current problems will pose a threat to the country’s investment flows and demand for its exports.

Recent government turmoil will impact investor confidence in the country.