Bloomberg: European aristocracy looks to invest in Transylvania

A Bloomberg piece by Edith Balazs and James M. Gomez investigates the phenomenon of European aristrocrats’ interest in Transylvania, from prince Charles of the United Kingdom to Alexander Roy-Chowdhury, an Austrian Hungarian-born aristocrat who recently rehabilitated a guest house in the village of Zabala on the Mikes estate.

“Despite the difficult circumstances, we’re trying to build up a sustainable tourism and forestry business and create an environment that keeps the young people here,” said Roy-Chowdhury.

About 100 kilometers (62 miles) from Zabala, along pot-holed roads crawling with horse carts, is the Kalnoky Castle in Miclosoara, which prince Charles frequently visits. The 25th generation of the Kalnoky family, whose members included a prime minister of the Austro-Hungarian empire, returned to Transylvania to manage the family’s 16th Century manor and guest houses catering to mostly Austrian and German tourists.

Aristocrats were driven out during the communist regime in 1949, and nearly 65 years later, Romania has evolved into an attractive opportunity for investment not just for its natural and cultural treasures, but also because of its growing economic competitiveness. Prince Charles’ visits to Miclosoara brought plenty of media attention to what the country has to offer in terms of rural tourism.

The most popular Romanian regions for rural tourism are Brasov (Bran-Moieciu, Fundata, Rasnov, Cristian), Bucovina, Maramures and Marginimea Sibiului, according to ANTREC. More recently, the northern part of the region of Oltenia has grown in popularity thanks to the opening of high-end guest-houses such as Conacul lui Maldar and Casa Cartianu as well as the region of Neamt.

Development of infrastructure and availability of skilled labor are paramount to attract investors to Transylvania, an area that’s home to a sizable Hungarian minority and is an important farming region, says Neil Shearing, chief emerging-market economist at Capital Economics Ltd.

Outside of the traditional problems that investors face, returning aristocrats are finding a herculean task in redeveloping properties nestled amid poverty-stricken areas. Also, they often find themselves tangled in legal disputes with the state over restitution.

“Being an aristocrat doesn’t mean you have the means to do business, it’s more a mentality, an attitude,” Alexander Roy-Chowdhury said. “Restitution has to be finalized or the issue of ownership remains questionable and a country with a questionable ownership environment is not very appealing for foreign investors.”

Back in June, Prince Charles has called on Romania to preserve its rural traditions, saying it could help boost the economy in the poor European Union nation.

“If traditions are preserved they will bring huge financial benefits to your nation,” he told students at University of Bucharest, in a rare public speech made to Romanians.

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