Romanian real estate to cash in on regional geopolitical turmoil

The situation in Russia and Ukraine has made Romania a more attractive destination for investors than before, discussed real estate pundits during the third day of the Foreign Investors Summit (FIS), organized by Business Review.

“In terms of risk, the investors’ perception of Romania has become more positive. It is partially because other countries in the region are perceived as having bigger problems,” said Gijs Klomp, the managing director of JLL Romania. Investments that were initially meant for Russia or Ukraine are now redirected towards other markets that are offering a similar risk/return profile, he explained. Moreover, at present even Hungary is perceived as offering a higher risk than Romania, Klomp went on.

Adding to this the fact that markets like Poland and the Czech Republic are becoming “very expensive” and as a result their return potential has come down significantly, Romania is expected to cash in on the present regional situation, he predicted. “So we will start to see that there is liquidity in the market, that there are new investors looking at this market,” explained Klomp adding that this should be further boosted by the investors “heard behavior”.

Romania is interesting today for investors mainly because of what is going on in the region and less because of its own merits, said Razvan Iorgu, the managing director of CBRE Romania. “Real estate is no longer only about real estate” and most of what is going on in the Central and Eastern Europe (CEE) region is related to Russia, he explained.

Overall, Romania has seen an increased number of real estate transactions so far this year, especially in the industrial field, and there is still plenty of room for growth in all real estate sectors, argued panelists. Office in particular has had a dynamic evolution over the past year and factors such as lower costs compared to the main CEE markets, a well skilled labor force and more recently the situation in the region should continue to attract BPOs and IT companies to Romania

“If we look at the top 100 BPOs worldwide, we see that only 30 percent have operations in the CEE, which means there is still a lot of potential” stressed Georgiana Andrei, director of the office & retail agency at Colliers International Romania.

Simona Bazavan