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Adopted from the article published in Dailynews.ro
Economic growth in Romania is outpacing the EU average, according to new statistics. According to the National Institute of Statistics and Eurostat, Romania saw its gross domestic product go up by 8.2% during the first three months of 2008. This is more than three times the amount that was recorded across the EU as a whole during the same period! In addition, the figure is also up from 6% in the first quarter of 2007, which was Romania’s first year as an EU member.
According to finance minister Varujan Vosganian, this trend has been driven by growth in the construction and service sectors. The economic boom is the biggest the country experienced since 1990 after the overthrown of the Communist regime. Special note was given to the Building industry where growth rates are 50% y/y. Still demand for new property, especially new houses/villas is phenomenal. A key note was also given to the constructions in the holiday spots such as the Black Sea coast.
This suggests that the growth of tourism and overseas property investment is having a positive impact on the Romanian economy. Property in the eastern European country is currently in high demand. This has led to supply being fairly restricted, which in turn has made available properties much more highly sought-after, thus increasing their prices.
Moreover the Finance Ministry just announced that June indicators show that the annual GDP expansion in Romania will continue above 8% for the rest of the year.
Large retailers are leaving their nests in Western Europe, which provide satisfactory but not excellent results, and going to Eastern Europe and Asia. Romania is one of the top targets in Eastern Europe for retailers like Metro, Carrefour and Selgros, whose local large-format stores provide the biggest sales increases for their chains.
All sorts of retailers – from cash & carry to supermarkets and discounters – are striving to get more of the romanian retail pie.
Real estate developers will deliver around 40,000 new apartments onto the Bucharest market in the coming five or seven years, three times lower than the demand, estimated at 130,000 units, Simina Istrate, head of the investment team within the residential division of Colliers International, told ZF. "This year, 9,500 new apartments are available for sale in Bucharest, with the other units to be absorbed by the market in the coming few years, however, they are not enough to cover the apartment shortage," said the Colliers representative in a seminar on real estate, organised by Business Standard daily. The first quarter of this year saw the acquisition of 2,000 new apartments, 81% more than the same time last year. The sales price of new apartments climbed by up to 30% in the first quarter of this year against the same time last year. "For new apartments, prices will continue to go up, due to the rising price of land and construction materials," she added. .
Robert Conn:. "Major private equity players come up with massive investment budgets, signing deals for sums starting from 100m euros and going beyond 800m euros. However, there are very few Romanian companies able to lure private equity investors with budgets of several hundred million euros. Even funds with budgets of below 100m euros are finding it hard to identify investment targets. "In Romania, there are few 'hot' sectors capable of attracting the attention of private equity investors (...),". The relatively limited number of companies ready for private equity investments has driven asset prices up. Having entered the Romanian market nine years ago by acquiring stock in Orange, Poland's Innova Capital currently owns a single Romanian firm in its portfolio, La Fantana, which it bought last year from another private equity fund, Oresa Ventures, in the wake of a 35m-euro deal. For the following years, Innova plans to become more active on the Romanian market. The budget earmarked for investments ranges between 20 and 80m euros per deal.
Marius Ivan, one of the founders of paint and varnish producer Dufa Romania (Dufa Deutek), plans to invest 1.5bn euros in the coming years in real estate projects in several Romanian cities together with his Irish partner Tom Quinn through Creativ Global Property company.
Ivan will launch a 700m-euro project in Bucharest and subsequently develop projects in Brasov, Cluj and Iasi, reads Business Construct monthly. Funds for development will come from banks and the businessman's own resources.The company's biggest investment will be Pipera City mixed project, scheduled for 2011 in the wake of investments worth 700m-euro, the project will include 200,000 square metres of office and 30,000 square metres of commercial space, as well as over 800 housing units.
Iulius Group will invest 250 million euros in two malls in Cluj and Suceava and a mixed real estate project in Iasi. The investments of Iulius Group, a company held by Iulian Dascalu, on the Romanian real estate market will reach 350 million euros until 2009.
Dascalu's most important investment is the Palas project in Iasi, which will entail costs of about 150 million euros over the next three years. "The Palas project, located behind the Palatul Culturii (Culture Palace), will include a complex of flats, a pedestrian shopping street, two office buildings, a theatre, a skating rink and a three hectare park," Dascalu specified.
The project will be developed in partnership with the Iasi City Hall.
In 2007, Romania will be the main destination for the Austrian investors among the countries of Central and Eastern Europe, according to a report conducted by Oesterreichische Kontrollbank (OeKB), cited by Mediafax. In 2007, Romania will attract 20 per cent of the new FDI made by Austrian companies in its region.
The main sectors targeted by the Austrian investors are the manufacturing industry, the constructions sector, the banking industry and the corporate services.
Adopted from the article « In imobiliare…cei mai buni din lume »
Just like gold-seekers in the Wild West were running after precious metal with desperation, so are foreign investors taking assault on the Romanian real estate market. We’re not saying this ourselves, rather two consulting firms that carried out two independent studies at the request of foreign investors considering the Romanian investment market. The conclusions of the study ? In real estate Romania is the best…in the world.
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