Romania is now the fastest growing economy in the EU and is attracting the attention of international developers and investors.
With investment in Central Eastern Europe growing at a rate of 30 per cent last year, Romania has started to take centre stage among the former communist states.
JLL’s Head of Capital Markets in Romania, Silviana Badea, said: ‘The industrial and logistics asset classes are seeing a great boom now. They are grossly undersupplied in comparison with Poland and the Czech Republic.’
A population of 20 million makes Romania attractive to the world’s retail companies and over sixty new brands have entered the market there in the last few years.
Romania suffered from the global financial crisis in 2008, and it has only really been since 2014 that the economy turned around into recovery. However, it now seems to be making up for lost time.
Around 70 per cent of investment over the last few years has gone into the capital city of Bucharest, but it is expected that developers and investors will soon start spreading to other areas of the country.
The East-West Carpathian Mountains split the country in half, meaning that retailers need to set up networks on both sides if they are to cover the whole territory.
Cities such as Cluj-Napoca and Lași saw consumption grow by 10 per cent last year and are likely to provide strong returns for investors, particularly in the office sector.
Infrastructure in Romania is also stronger than before, making the real estate market a safer bet than previously.
Silviana Badea commented: ‘Romania is much more robust now than it was in 2007/08. The fundamentals are there regarding real estate. We have transparency, we have professional advisers; It’s a much more mature market now. There’s no turning back.’
With growth in the office and retail sectors strong, residential real estate growth will follow as workers in these burgeoning areas require housing, particularly in the cities.
Romania may now be one to watch if overseas property investors are looking for a strong capital return on their money.