CONTEXT:
The real estate market in Romania is facing a new wave of unprecedented situations: the crisis of construction materials, huge increases in energy costs, war on the border and the effects of the pandemic. Office building owners are still looking for solutions to attract their tenants’ employees back to their workspaces. Most corporations have adopted a hybrid way of working. In the last two years, more than 2 billion euros were invested in the Romanian real estate market, and the majority of the capital came from investors from Central and Eastern Europe. Western players have a heightened sensitivity for proximity to the conflict zone in Ukraine. Malls are looking for ways to return to pre-pandemic visitor traffic, now also struggling with a stronger online environment. New brands appear on the market. Mall owners need solutions to reduce energy consumption and ever-increasing bills. Interest in the purchase of apartments is on the decline, and investors in residential projects expect a steep decline in transactions, from the record levels reached in the previous year. The war in Ukraine, but also the cost pressure of construction materials, forces investors to postpone or abandon unstarted residential projects. The average increase in the prices of construction materials in 2021 was 40%, but there were materials, such as steel-concrete or materials made of plastic, whose prices doubled. Some materials produced in Romania have become too expensive for public contracts in the country. We import about 70% of the construction materials used on construction sites, and those manufactured in Romania use imported raw materials. It will be built more and more expensive.

THEMES FOR DEBATE

• The degree of vacancy in the office sector increased in 2021, because there are many companies that gave back spaces, using the expiration date of the rental contracts.
• Record number of new companies in the process of entering Romania with offices, employing almost 5,000 workers. In addition to Bucharest, Timișoara, Iași and Cluj-Napoca are targeted.
• Yields (investment returns) compressed in 2021 in the office sector, which translated into an increase in prices.
• Investors’ interest in the acquisition of medium-sized commercial centers with positioning problems is increasing.
• New names of international retailers are expected in the malls in Romania.
• The price of housing started to increase towards the end of last year and the beginning of this year, in the context of the increase in the price of construction materials. The evolution of the pace of home sales and apartment prices, after a new year of record sales and deliveries.
• Investors are becoming interested in the purchase of apartments for investment purposes, to rent them out. The attractiveness of the returns offered by this real estate segment.
• Stocks of existing construction materials in Romania are extremely low, after a pandemic that left the sector with 20% inflation.
• The high cost of energy also greatly affects the price of construction materials, which last year had growth peaks of over 40%.
• The highest number of insolvencies and bankruptcies among builders in recent decades, even higher than the previous peak reached in 2010.

The event will take place at the JW Mariott Hotel and will be broadcast live on the Profit News TV channel, but also online at www.profit.ro /live and on the Profit.ro