Bucharest’s real estate swells over 3.5bn euros as major foreign buyers enter Romania

Bucharest, Romania, March 10, 2021.
Major international investors led by American Morgan Stanley and Israel’s Adam Europe have propelled Bucharest’s emerging real estate to over 3.5 billion euros, the latest market study ‘The New Face of Bucharest’ done by Bucharest Real Estate Club (BREC).
The upswing in real estate that started five years ago in the Romanian capital is now delivering projects poised for completion between 2020 and 2023, the study says.
Major international brands that entered the Bucharest real estate market in the last five years include American investors Morgan Stanley, Cerberus or White Star, South African funds MAS REI, Atterbury or Fortress, Israel’s Adam Europe or Dayan family.
Developers already active since the last 10 years in Romania include names such as One United Properties, Element Group, Dedeman Group, Globalworth, CA IMMO, S IMMO, Immofinaz, Gran Via, Vastint or WDP.
The total investment volume includes major urban renewal projects with mixed roles on large former industrial plots in Bucharest. Projects cover new offices, hotels residential compounds, retail and logistics schemes and new municipality infrastructure located in Bucharest Central Business District. These projects target investments in the city’s real estate that has seen new foreign buyers over the last 36 months.

Office development in Bucharest Timpuri Noi Square by Vastint.
An emerging East-European city, Bucharest inherited large industrial platforms in central areas of the city. Marquee real estate brands have picked up these prime plots and transformed into them modern real estate compounds.
A private gentrification phenomenon is evolving in Bucharest, with international and local investors transforming large unused plots of lands into new, vibrant communities: modern office buildings, residential compounds, retail amenities, reconversion of old historical buildings. Investors active on this segment are One United Properties (Romania), Vastint (Switzerland), Hanner (Lithuania), the study says.
Bucharest city centre has witnessed radical transformation given its tourist traffic (3,6% annual increase before the pandemic) and its location within the EU borders.
Major investors in Bucharest CBD include Appex Alliance (Lithuania), Dayan family (Israel)), Hagag Group (Israel), Atenor (Belgium), Tiriac Imobiliare (Romania).
The main commercial area of the city, Calea Victoriei, continues to grow as an office and hotel hub in the upcoming years, with developers planning to build seven new office buildings and six hotels, with a total investment value exceeding the 300 million euros threshold, according to a Cushman & Wakefield Echinox analysis.
Covid-19 and work-from-home format affected the office sector with a 36% decrease in the transactions volume in 2020 compared to 2019. To beat this trend, some developers have converted these projects into residential compounds. However, investments in new office hubs have not stopped. Several of the most active office investors in Bucharest are Globalworth (South Africa), One United Properties (Romania), CA IMMO (Austria), Vastint (Switzerland), Speedwell (Belgium), Immofinanz (Austria), River Development (Romania) or Skanska (Sweden).

Office investment acquisitions remain attractive despite the pandemic, due to higher yields versus the CEE region. The real estate investment market in Romania is estimated at 900 million euros in 2020, up 30% as compared to the level recorded in 2019, being the only market in the region that recorded an upward trend during the health crisis.Romanian decision-makers have set up Bucharest as a hub of technology and innovation. A recent Financial Times ranking endorses this as it places Bucharest seventh in the Top 25 ‘Tech Cities of the Future 2020/2021’. At the same time, in the pandemic context driving the acceleration of digitalization, BREC estimates that the main software and digital solutions companies continue to accelerate their development.BREC’s Head of Global Estate UiPath Elisabeta Bosneag says, “UiPath was founded in Bucharest, which was the springboard to our global development. We have found here the necessary infrastructure and modern offices, but most importantly top skilled talents who contributed to taking the UiPath story to each continent.”
Residential sector performance has exceeded expectations in Romania with total sales in 2020 up by 19% compared to 2019, according to National Cadastre Agency data. This result combined with the increasing purchasing power of Romanians and anticipated economic growth in 2021 (+4.6 % –International Monetary Fund) are the main pillars for residential developers’ investments in new, modern living compounds with numerous facilities and integrated technology for a better lifestyle. Most active developers in Bucharest include One United Properties (Romania), Gran Via Real Estate (Spain), Speedwell (Belgium), Akcent Development (Romania).
The total Romanian logistic stock exceeded 5 million sqm at the end of 2020, with 2.4 million sqm in Bucharest. The company estimates the total Romanian logistic stock will exceed 8 million sqm in five years. Some most active investors on the logistic sector include Romanian investor Element Industrial or Belgian investor WDP.