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Real Estate in Romania: Low Risk, High Reward

06 July 2021


by Alexandru David, Head of Research, JLL Romania


Romania is a rapidly developing country, and an established EU and NATO member. In 2019, the World Bank promoted Romania in the High-income group of countries, with a gross national income (GNI) per capita of EUR 10,600. For 2021, the European Commission projects that Romania will enjoy the third highest GDP growth rate in the EU, of 5.1%. This trend is most likely to continue in the medium term, considering that Romania will benefit during 2021-2027 from almost EUR 80 billion worth of EU investments from the Multiannual Financial Framework and the Recovery and Resilience Fund.

Economic development was also reflected in the purchasing power of the local population. Between 2016 and 2020 the average net wages in the country have increased by almost 43%, from approximately EUR 525 to EUR 750. International companies opening offices in Romania or establishing production facilities here had an important role to play in this.





Brief Market Overview

The Romanian commercial real estate market provides opportunities in all segments, both in terms of development and investment. Historically, the market has been driven mainly by local or regional developers, but, especially in the last seven years, we have seen increasing interest from international institutional players. Some of the international office developers with a track record in Romania are: Globalworth, Skanska, AFI Europe, GTC, IMMOFINANZ, CA Immo. In the retail sector, NEPI, AFI Europe, Sonae Sierra, S IMMO or IMMOFINANZ have been active. The industrial sector has been shaped by developers such as CTP, P3, WDP, VGP and Alinso Group.

The main office developments are located in Bucharest and the top secondary cities with strong university centers that can offer the relevant labour force with higher education. Retail developers have targeted most of the 42 county capitals in Romania, focusing mainly on those with a high population density and high disposable incomes. There are industrial projects throughout the country, however access to good infrastructure and proximity to either Bucharest or, CEE and the rest of Europe, has directed investors interest mainly towards the Western part of the country (Timișoara, Arad, Cluj-Napoca, Sibiu) or to the Central-South (Bucharest Greater Area, Ploieș , Piteș ) and more recently towards the East, namely Bacău and Iași to cover the Moldavian part of the country.


Multinational companies are increasingly targeting Romania due to the country’s human capital, with strong foreign language skills, as well as the availability of quality o ce products at competitive pricing. Romania currently has a total modern (A and B class) office stock to lease of approx. 4 million sqm, including Bucharest and the four major regional cities of Cluj-Napoca, Timișoara, Iași and Brașov. However, Bucharest alone accounts for almost 3 million sqm of modern offices.

During the last five years, approx. 1 million sqm GLA of offices were delivered in Bucharest, marking a 50% increase of the office stock. Another 256,000 sqm are expected to be delivered in 2021. Many international companies have chosen Bucharest in recognition of its extended infrastructure and due to the availability of skilled workforce. In particular, high office space demand comes from IT&C companies, such as Microsoft , IBM, HP, Oracle, Intel, Adobe or Siemens, amongst others.












Bucharest experienced a strong demand for office spaces during 2016-2019, on average over 360,000 sqm being leased in total on a yearly basis. However, the COVID-19 pandemic had a detrimental impact for the local economy and for office space demand. 2020 marked a 44% drop in total demand compared to the previous year. At the same time, the vacancy rate increased from 7.7% at the end of 2019, prior to the onset of the pandemic, to 11.3% at the end of 2020.

Market rents in Bucharest were stable during the last 5 years, at around EUR 12.5 per sqm per month in the non-central areas, EUR 15 per sqm per month in the semi-central areas, and EUR 18.5 per sqm per month in the Central Business District (CBD) of the city. Currently, the office market in Bucharest is in a recovery process, as companies return to normal and reassess their strategies following the pandemic.

One important event for the office market in 2020 was the EU’s decision to locate in Bucharest the headquarters of the future European Cybersecurity Industrial, Technology and Research Competence Center. This move is expected to stimulate technological research and innovation and to consolidate the cybersecurity within the Union. Moreover, the Center will become the main EU body to manage the European funds dedicated to research in the field of cybersecurity, available through two EU financing programs, Digital Europe and Horizon Europe. In terms of office demand, this will likely attract to Bucharest IT and cybersecurity companies from all over Europe in the short and medium term. We expect to see more growth in the upcoming years also in the 4 regional cities of Cluj-Napoca, Timișoara, Iasi and Brasov, currently concentrating around one million sqm of modern offices in total and providing expansion alternatives for companies.

2020 marked an important milestone for the regional markets, when the American giant Amazon pre-leased over 30,000 sqm GLA in Iași. This is the largest historical deal recorded in the regional cities and the second largest in Romania overall.


The modern retail market has been developing in Romania over the years. However, in the case of large retail formats, including here shopping centers and retail parks, the expansion pace has been tempered by the limited purchasing power of the local population.

Currently, the modern stock of shopping centers and retail parks in Romania totals almost 3.7 million sqm, out of which approximately 1.2 million sqm are situated in Bucharest. During the last five years 720,00 sqm of new shopping centers and retail parks were delivered in total throughout the country, out of which 80% in regional cities, and 20% in the capital.

The retail sector was significantly impacted by the COVID-19 outbreak. For most of the second quarter of 2020 shopping centers in Romania were almost completely closed, except for the hypermarkets, pharmacies, and laundry services. Footfall levels in shopping centers started to gradually recover during the second half of the year, but that could not compensate for the weak start of the year.

2020 also marked a shift in the types of projects preferred by developers, from mostly shopping centers towards smaller retail parks in secondary and even smaller cities. If shopping centers accounted for 80% of deliveries in 2020 in terms of GLA, for 2021 there are no new shopping centers in the pipeline, their place being taken over by retail parks and smaller extensions of existing schemes.

On the other hand, major food retail chains pursued a rapid expansion strategy, opening over 400 supermarkets and hypermarkets during 2020, showing a clear sign that they were not discouraged by the pandemic.



The industrial real estate market in Romania experienced a period of rapid growth during the last 5 years, the modern stock to lease increasing by an impressive 2.5 million sqm, reaching over 5 million sqm at the end of 2020.

Beside the stock for lease there is also a significant modern owner-occupied stock, especially production facilities. This adds over 4 million sqm to the modern industrial stock, thus totaling over 9 million sqm.

Usually, the industrial and logistics developments closely follow transport infrastructure improvements, granting accessibility to suppliers, clients, and export markets. Considering that plenty of EU money will be available to Romania between 2021-2027, including over EUR 8 billion for large transport infrastructure projects alone, the industrial real estate markets will surely benefit.

The automotive industry has been one of the stars of the Romanian economy, especially in terms of exports, the number of people employed, but also in terms of demand for new industrial space. Currently, Romania hosts two major car manufacturers, Renault – Dacia in the city of Pitesti, some 120 km west of Bucharest, and Ford in Craiova, further to the west. Together, on average they’ve delivered around 500,000 units per year during 2016-2020. But, just as important is the car parts production, from tires, car seats and airbags, to engines, cables and electronics, supplying major markets across Europe.

Some of the largest automotive companies worldwide operate production facilities in Romania, including Star Assembly (Daimler), Continental, Autoliv, Robert Bosch, Michelin, Hella, Pirelli, Delphi, Aptiv, TRW and Lear Corporation, just to name a few.

Demand for industrial and logistics space in Romania was high during the last five years, with an average of 550,000 sqm leased on a yearly basis. Despite the pandemic, 2020 marked a spike in demand, reaching approximately 700,000 sqm.

Rents for modern industrial and logistics spaces vary between EUR 3.6 and EUR 4/sqm/month in Bucharest and its vicinity, and between EUR 3 and EUR 4/sqm/ month in other regions of Romania. The pandemic did not have a significant effect on the industrial rents and the industrial real estate market overall.



The residential market continued to grow during the last 5 years, mainly due to the positive economic trends, the decline in the unemployment rate, especially in major cities, and the general average wage increase throughout the country.

The preference for home ownership in Romania is still very strong, as an owned home is viewed as more socially secure. Almost 96% of Romanians lived in owner-occupied homes as of 2019, which was the highest rate in the EU, far surpassing the EU average of 69.8%, according to Eurostat.

Considering the very high home ownership rate in Romania it is likely that this rate will start to decrease in the long term and get closer to the EU average. Institutional investors have already started prospecting the market with the intention to acquire residential portfolios to rent, especially in Bucharest.













During the past 5 years, approximately 300,000 new residential units were delivered in Romania, with an average of 60,000 per year. Close to 68,000 were delivered in 2020 alone, slightly above (+0.5%) when compared to the previous year. Therefore, the pandemic had no effect on deliveries so far.

The beginning of 2020 found the residential market in a good shape, allowing the developers to quickly adapt their operations to the new market conditions. In terms of supply, 2020 performed very well despite the general uncertainty caused by the pandemic. In Bucharest alone, approximately 10,000 new units were brought to the market in 2020, plus another 3,600 units in the neighboring Ilfov County. Residential prices in Bucharest registered a 3.5% increase in 2020, reaching EUR 1,465 per sqm, continuing the ascending trend started in 2015.


This article was originally published in Real Estate in Romania & Poland 2021 report, available in full here.


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