Von Marianne Schulze
February 2007

Romania’s entrance into the EU has spurred on the real estate investment market before it even happened. Initially, mostly Austrian companies were the first to venture into the market; meanwhile, that spectrum has broadened widely.

Even though there is still room for improvement in certain areas to fulfil European standards, Romania has become a member of the European Union on January 1, 2007. With roughly 22 million residents, the second-largest country — after Poland — of the Central and Eastern Europe member countries has stabilised politically. It also shows continuing economic growth that has reached over five percent after the slump resulting from the flood catastrophe in the spring and summer of 2005. Increasing private consumption is a catalyst, spawned by increasing real income and decreasing unemployment rates. For a long time, the country boasted a highly qualified labour force. Meanwhile, a notable shortage in qualified labour force has developed in some places.

Photo: With the accession of Romania into the EU, the interest of international investors is significantly increasing. It is primarily directed at the capital of Bucharest; however, other cities have also caught the attention of investors.

The investment climate in Romania is generally positive — this is the result of the latest survey of German investors from the WBF/GTZ Programme for Economic and Employment Promotion in Romania. After all, 75 percent described the investment climate as very good to overall positive. 82 percent also described the overall economic perspective as positive. However, the survey also highlights some weaknesses, for example, in tax management. A lack of reliable information and the inconsistent management of it is a major complaint, although a lot has become easier since introducing the 16 percent “flat tax” on private income and profits of corporations.

Austrians as pioneers
However, this does not seem to scare international investors away. In fact, when the Austrian CA Immo bought the “Opera Center” in Bukarest in 2003, this was the first large international investment in the Romanian office real estate market. Europolis and ImmoEast — also from Austria — followed shortly after. Europolis recently made the largest inter-national investment in the office market, with its purchase of the future Sema Parc for an estimated 90 million Euros. Sema Parc will be built on a 43-hectare former industrial area, whose conversion began in August 2006. In the first phase, two office buildings with 42,000 square metres will be built: the Courtyard Building with 15,000 square metres will be finished during Mid-2007, and the City Building with 27,000 square metres will be completed in the middle of 2008.