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Romania - the next big thing?

2 MIN READJune 28, 2019
With clear intentions to provide the best conditions for foreign investment, the SEE region offers a way in to both the bigger CEE market and the established Western Europe. At the GRI Club meeting held in Bucharest last Thursday, a selection of the key players in CEE & SEE real estate discussed a number of controversial topics, including the new trends that could make the region considerably more favourable to global investment. 
 
The Romanian market in particular was a topic that divided the room. Some believed that the Romanian market was in a stage of stable growth, despite the general European investment community being increasingly uncertain about the country's real estate climate. They were resoundingly seen as the leader in the SEE market, and often business is conducted swiftly to the advantage of the investors. The banks, despite becoming slightly more conservative, are often open to profitable projects and are generally supportive. 
However, other key leaders believed the risk/reward curve was still volatile. This was partly because of banks taking cautious measurements against an overdue market correction. 
The room however agreed that there were two consistent problems facing the country. The first coming from a diminishing workforce due to immigration because of lower wages, and the second id Romania being inaccurately portrayed outside of the country in terms of its risk/reward profile. 
 
Consequently, it’s a regular occurrence for investors from America and Asia to have relatively negative preconceptions about the region in terms of yields, political risk and lack of quality product, but after taking a closer look or even visiting they become very interested and enter the market. The leaders acknowledged that SEE is much more appealing to look at from inside the market rather than outside, and in fact the quality of buildings is at times even higher than most of CEE and parts of Europe. 
 
The attendees concluded that what Romania does have going for it is an abundance of potential, which is cultivating a local drive and attraction for new capital despite its challenges. This potential comes from untapped development opportunities and lack of major competition among investors. 
 
For more clarity on the SEE and CEE real estate market, Europe GRI 2019 is being held on 11-12 September in Paris. 
 
Article by Matt Harris
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