Real estate and construction sector was third largest recipient of foreign capital in Romania in 2022

Romania’s real estate and construction sector attracted approximately EUR 1.2 billion of foreign direct investments (FDI) in 2022, reaching a share of 17.2% in the overall FDI stock at the end of the year, according to data from the central bank analyzed by Cushman & Wakefield Echinox.

In this context, the real estate and construction sector became the third largest recipient of foreign capital in Romania, after industry (39.2% of the FDI stock) and trade (17.7%) and ahead of financial intermediation and insurance (13.2%), the same source said.

The total FDI flows in Romania were EUR 10 billion in 2022, with the FDI stock increasing to a level of EUR 107.9 billion.

The FDI stock of the real estate and construction sector reached EUR 18.6 billion at the end of 2022, recording the third highest growth rate among all economic sectors after industry (EUR 32.6 billion in 2022 vs EUR 29.4 billion in 2021) and trade (EUR 19.1 billion in 2022 compared with EUR 17.2 billion in the previous year).

In the 2013 – 2022 period, the four major economic activities with the highest FDI positions had a 92.8% contribution to the stock’s overall growth. In absolute terms, the industry went up by EUR 13.1 billion (+45.3% compared with the end of 2013), trade by EUR 12.7 billion (+198.8%), construction and real estate transactions by EUR 12.3 billion (+196.5%) and financial intermediation and insurance by EUR 5.7 billion (+66.8%).

“The consistent increase of the FDI flows in real estate and construction during 2022 also reflects the evolution of the total stock of modern commercial properties, with the foreign investors being the largest owners of such properties in Romania on all market segments, owning more than 70% of the total stock at national level,” Cushman & Wakefield Echinox said.

Real estate developers delivered new office, retail and industrial projects with a total area of around 1.1 million sqm in 2022, with the modern real estate stock reaching 14.9 million sqm at the end of last year. Furthermore, by taking into account the projects completed this year so far and those to be delivered by the end of 2023, the abovementioned stock will exceed the 15.5 million sqm threshold, the real estate consultancy company said.

Vlad Saftoiu, Head of Research Cushman & Wakefield Echinox, stated: "If we also consider the foreign direct investments attracted by retail, investments totaling approximately EUR 1.9 billion in 2022, the real estate sector has, directly and indirectly, benefited from a foreign capital inflow of more than EUR 3 billion, a level comparable to that of the manufacturing industry (EUR 3.1 billion). This positive dynamic once again illustrates the important role the real estate sector (through both domestic and foreign capital) has in the development of other economic sectors in Romania, a fact strongly confirmed by the significant expansion of all the real estate market segments during the past 10 years.”