Referred to as the “Eastern European tiger,” Romania’s evolution in the past few years is defined by macroeconomic stability, more predictability in the business environment, and improvements in government processes and developments that facilitate foreign investment. Combined with a cost-efficient and capable workforce, it is an attractive place for investment and development. This article presents an outline of the markets and the opportunities available in Romania.


In this sector, other European states are Romania’s main trade partners (more than 85% of the total imports and exports of Romania) with the country registering a significant growth in international trade in 2016.

The total exports of Romania were focused on products of the machinery industry, including the electro-technical industry to over 40%, textiles and chemicals.
The machinery and electro-technical industry is one of the strongest pillars of the Romanian economy, accounting for almost half of the total exports of Romania in 2016.

One of the most dynamic sectors in this industry is the automotive sector which has proved to be very attractive for foreign investors, even with some slowdowns in the EU cars sales in 2016.


With over 600 investors and more than 200,000 employees, the automotive sector provides around 20% of the total exports of Romania, registering annual total sales of approxi- mately EUR 20 billion. The salary levels in this industry (EUR 4.9/hour) are among the most competitive in the EU; an important advantage for foreign investors.

In 2015, the number of cars produced in Romania reached approximately 400,000 units with 87,60% of the production belonging to Dacia, a member of the Renault group for more than 16 years and one of the strongest international Romanian brands. 13% of car production capacity belongs to Ford. However, the automotive industry in Romania does not solely revolve around car manufacturing and assembly, but also includes the construction of components and equipment by well-known international companies such as Continental and Pirelli (tyres), Faurecia (automotive seating, interior systems, emissions control technologies), Daimler (gearing systems) Federal-Mogul (wiper blades, brake pads), Dräxlmaier (elec- trical systems and components, interior modules, testing equipment), Bosch (electronic modules, Sumitomo Electric Wiring Systems) and Autoliv (safety equipment).

The automotive sector is strongly supported by the Romanian Government. Reportedly over 53% of State Aid granted in recent years having been directed to this industry, most of it to foreign investors.

Although the majority of components for the cars manufactured in Romania are also produced in Romania (up to 80% for some parts), car manufacturers such as Dacia-Renault are continuously searching for new investors in this area to reduce the costs associated with component imports, targeting Asian investors in particular.

In 2016 important advances included significant investments from Daimler in its factory, the opening of a new factory in Romania by Faurecia and by Federal Mogul, and an extension of Porsche’s and Continental’s operations within the country. The markets still present many opportunities for producers of components not currently found in Romania, such as plastic parts, and especially for the producers of mechanical components such as cast iron components and coil springs.


The Romanian aircraft industry is becoming increasingly popular with foreign investors with up to six parties having recently expressed their interest in investing in production units for aircraft equipment and components, according to local news reports.

The year 2016 has seen an impressive investment in the industry with the development by Airbus Helicopters of a new assembly plant for civilian aircraft, and also the military version of Super Puma MK1 helicopters. Plans for 2017-2018 include investments for a new line of production.

It is also possible that structural components and electrical wiring will also be produced in Romania by IAR Ghimbav, the Romanian supplier of Airbus Helicopters.

The Romanian aviation market currently covers the production of aircraft and subassemblies and components, as well as aircraft maintenance and manufacturing. US giant General Electric is also present on the Romanian market, producing engines for Boeing 787 Dreamliner and Airbus aircrafts with an estimated turnover of EUR 18 million in the first half of 2015 alone.


Due to the cost-competitive work force, qualified personnel and proximity to the western markets, many international fashion retailers have based their production in Romania. Luxury brands such as Armani, Dolce&Gabana and Prada, or mass-market brands such as H&M, Zara, and C&A, have opened apparel plants throughout Romania, most of them be- ing located in the provinces.

The factories largely operate in the loan system which has led to developments in technology and design and has introduced new quality standards.

Local business analysts suggest that innovation, identification of niche segments (e.g. textiles for industrial use – targeted at sports, medicine, agriculture, environment, etc.) and an export-oriented approach could reinforce the textiles sector.


The real estate market in Romania is enjoying sustainable growth, with a high level of transactions in the retail, office space and residential sectors. It can now be characterised as diverse and mature, with a focus on office spaces (including in downtown areas) and shopping mall-type concepts.

The expansion of investors’ appetite is particularly visible in economically dynamic cities with new constructions built at a sustained rate in the first semester of 2016. Also, grow- ing interest in agricultural land, vineyards, and woodland has been displayed by foreign investors from the UK, Germany, the Netherlands, USA, and China.

Increased activity in the real estate market was recorded in the last two years, with investment levels rising well above other eastern European countries and expected to grow further in various real estate sub-markets.

Significant property investments are estimated at EUR890 million for 2016, with approximately 35% increase in comparison with 2015. Specialists noted that transactions were down in number, but higher in total value.

The last two years saw major projects include retail developments with NEPI leading the largest transaction of EUR 150 million, investment in office space of over EUR 250 million in 2014 in Bucharest alone, and a mixed investment project in western Romania of over EUR 250 million, throughout 2015. In retail, large transactions have also taken place outside of Bucharest, such as the acquisition by NEPI of Sibiu Shopping Center from ARGO.

In 2016, the largest transaction was the acquisition of a part of the shares of Globalworth, the largest owner of space office in Romania, by Growthpoint, a South African group.

Expectations for 2017 cast the retail and residential sectors as central to the real estate market. Furthermore, industrial warehouses are set to increase significantly by a staggering 500,000 sqm in 2017.


The Romanian hotel market is primarily focused on three areas which together represent one third of the total market: the capital city, Bucharest, the seaside resorts area and the mountain and ski resorts – where landmark tourist attractions such as the Bran Castlea and the Peleș Castle are also located.

Forecasts for 2017 are optimistic about the hotel market given the constant increase in business and leisure travel. This optimism is based on cultural events around the country that attract impressive numbers of tourists, such as the Enescu Festival and the Untold Festival.

After a stagnant period caused by the economic crisis, the market appears to have picked up the pace once again, starting with 27 hotel openings in 2014 alone and with a growing trend during 2015 and 2016. Also, the recent decrease in VAT on tourism from 24% to 9% represents a further incentive for new investors to enter the market.

Chain-affiliated hotels make up 7.3% of the total Romanian market and 40% of the Bucharest market with hotels affiliated with Wyndham Hotel Group, Hilton Hotels & Resorts, Marriott International, Best Western, Rezidor Hotel Group and Orbis Hotel Group amongst others. Starwood Hotels & Resorts Worldwide recently entered the Romanian market with the opening in August 2015 of the first Sheraton hotel in Bucharest. This came after a franchise agreement was concluded with the Grand Plaza Hotel (former Howard Johnson hotel). The rebranding process involved an EUR 6 million investment and one year of refit works. Other important openings for 2015 in Bucharest included Mercure Bucharest City Center, Park Inn by Radisson and Best Western Plus Expocenter Hotel.

The most popular leisure destinations are the mountain and seaside resorts, with Bucharest attracting a smaller percentage of leisure arrivals. However, improvements are expected in the near future. Destinations such as Sibiu, Brașov, and Sighișoara have also become increasingly popular in recent years among architecture and history enthusiasts.

Also, numerous hotels and buildings with traditional architecture requiring renovation are for sale on the market. Considering the above, the hotel market correlated with an increasing tourism industry presents significant business opportunities for investors.


Sustainable growth characterised the local office market in the last two years, and Romania is again on the radar of new investors.
Forecasts predict that Romania can absorb new investments and especially in the major Romanian cities in addition to Bucharest.

Leasing activity involving office spaces has been on the up in recent years. The year 2015 was no exception, and there are similar expectations for the future.
Due to the high business importance of Bucharest, we will first look at the specificities of Romania’s capital and then present an overview of how other regions are faring.

The Bucharest office market registered a record take-up vol- ume in the last two years as well as a high record in pre-lease activity, with 82,100 sqm pre-leased transactions in 2016. Three office buildings were delivered recently having a total GLA of 54,000 sq.m: City Offices, Auchan Tricodava and Green Court – building B.

Demand in Bucharest over the first three months of 2016 was mainly generated by IT and BPO / SSC companies, which accounted for over 35% of the total volume registered, fol- lowed by telecom companies with 14% and media companies with 12%. The northern part of Bucharest (Floreasca Barbu Vacarescu and Dimitrie Pompeiu) attracted close to 36% of the total take-up, followed by West and Center West with 25% and North with 19%.

Vacancy in Bucharest increased marginally over the quarter to 13.5%, 20 bps above the level of Q4 2015. This is mainly because the new buildings delivered were only marginally prelet. The vacancy is expected to continue to increase by the end of 2016, due to the large volume of space planned for delivery. Approximately 320,000 sq. m is still under construction, of which, close to 40% is pre-leased.

Vacancy rates continue to be uneven between sub-markets, which is also reflected in the evolution of the rental levels. While in South and Pipera North vacancy is above 30%, the vacancy rate in Dimitrie Pompeiu, Floreasca Barbu Vacarescu, CBD, and West is below 10%.

Also, office leasing activity in Bucharest hit record levels in 2016 with a total take-up of 369,000 sqm, increasing by approximately 52% compared to the same period the year before. For the past couple of years, investments in the acquisition of real estate assets were mostly split between two investment funds – NEPI and Global Worth Real Estate Investments. Nevertheless, an increasing number of investors are now considering Romania for the first time, after about seven years of comparatively reduced interest.

Outside the capital, the office market is expected to considerably expand in the next few years, as the regional office markets in Romania are underdeveloped in comparison to countries such as Poland or the Czech Republic.

Cluj Napoca, Iași, Timișoara, and Brașov have started to become a viable option for companies looking to enter the local market or to enlarge existing operations.
Compared to Bucharest, these cities offer more competitive costs regarding workforce and office space occupancy. Due to their strategic location, student population, qualified labour force and IT infrastructure, Cluj, Timișoara, Iași, and Brașov have become, in recent years, the largest office markets outside Bucharest.

Considered to be a “miniature Silicon Valley’’, Cluj Napoca is one of the most attractive cities in Romania for Technology & Telecom companies. Iași is the second most attractive regional city after Cluj Napoca for companies looking to open BPO (business process outsourcing), R&D (research & development) or SSC (shared services centre) operations.

Located in the Western part of Romania and having excellent connectivity with the western part of Central Europe, Timișoara has become a highly favourable office destination for companies active in various fields such as Manufacturing, Technology & Telecom and Financial Services.


Shopping Centres

As the economic recovery continues, and with consumer confidence back on track, shopping centre owners and retailers are confident that growth will continue and become more intense by the end of the year. Therefore, investments in new retail schemes and the opening of new stores are also attracting the attention of developers.

The year 2016 included the delivery of Park Lake Plaza and Veranda Mall with approximately 100,000 sqm of GLA. The period of 2017-2018 does not yet foresee any new structures in Bucharest, but outside of Bucharest, we expect to see new developments.

According to the National Institute of Statistics, in the first two months of 2016, retail sales grew by an impressive 16.9% when compared to the same period of 2015, with a surge of 26.2% in food products. This, together with the consumer confidence which is at one of the highest levels in recent years, encouraged retailers to expand. Because they are increasingly selective when it comes to the standard and location of new retail destinations they are thoroughly revising the leasing of further units, targeting mainly the performing shopping centers, due to the lack of high-street retail.

Among the most famous brands to enter the Romanian market in the first three months of 2016, Chanel and Boggi opened their first units in Baneasa Shopping City, while New Era and Tezenis inaugurated their first shops in AFI Palace Cotroceni. Other new retailers who announced that they would open new locations in Romania include COS in a street unit on Calea Victoriei in Bucharest, Forever 21 and Lenidor in Park Lake Plaza and Vivo and Stop Shop in Immofinanz’s retail schemes. The surge in the retail sales of food products, combined with the very large part (close to 40%) that such products are occupying in the local consumer basket, are making Romania a very attractive market for food retailers which will most likely continue with their expansion plans.

Bearing in mind that the number of new entries is increasing and that retailers, especially fashion brands, are reporting solid growth in sales, upward pressure on prime rental level is expected.

High Street Market

Starting with 2014, the entertainment sector started to impact on the high-street leasing market. Several new restaurants and cafés were actively looking to expand beyond the Old City Centre. The additional demand came from supermarkets, ca- sinos and betting agencies.

In keeping with previous years, food retailers continue to be the main drivers of demand.

Starbucks continued its expansion in Bucharest opening new outlets both in business locations and in established high street areas. La Placinte opened two new units in Romana Square and AFI Park 2 in 2014, reaching a total of six units in Bucharest at the end of the same year.

Considering That Most of The Romanian Cities with A Population of Over 100.000 Have Been Saturated with Modern Retail Schemes, New Development Activity Is Directed Towards Tertiary Cities, With Small Retail Parks In The Spotlight.


The residential market showed visible improvements starting with 2014, sustained by lower financing costs and a better offer-demand synergy regarding prices and characteristics of residential units, especially in the new apartment segment. Real estate development activity resulted in the completion of small scale developments that were located in peripheral and secondary areas, close to important public transport routes such as Berceni, Militari, and Ghencea.

A similar evolution was recorded in neighbouring localities. The aim is to provide residential units that can be acquired through the “First time buyer” state financed programme. Demand for apartments with prices below EUR 50,000 represents the largest proportion.
The structure of residential transactions reveals that two room apartments remained the most sought after properties starting with 2014 (approximately 51%), similar to the 2009-2013 period.
Small scale residential developments located in peripheral locations and secondary areas now dominate the local market. Given the highly competitive prices, most of this stock was usually sold before completion.

For the medium income segment, demand encourages developers to initiate more projects meeting client requirements, while new apartments in the central area (Dacia, Polona, Domenii, and Cotroceni) and secondary areas (Iancului, Obor and Dristor) are targeted at the medium-high income segment.

RICS Report: Types of apartments bought and the Value of the units bought through “Prima casa.”


For the purpose of receiving EU structural and cohesion funds for transport infrastructure, Romania prepared a high-level roadmap, setting the major objectives of the national trans- port system – the General Transport Master Plan.

The total value of projects identified in the plan amount to EUR 45.451 billion which include investment projects in the transport infrastructure of Romania for the road, rail, air, sea and multimodal sectors, with significant EU funds available in these areas.

In brief, the main indicators of the GTMP are as follows:

In the rail sector, the focus is on maintenance and upgrading existing mainlines to EU standards (for a total amount of around EUR 14.4 billion over the period 2014-2030). The upgrade is expected to absorb most of the available funds due to the poor condition of rail networks.

Furthermore, the European Commission stressed the fact that almost 50% of all infrastructure funds allocations in Romania would go into the railway transport system.
This approach brings significant opportunities and projects for construction and equipment companies acting in the rail sector in the future.

Regarding road infrastructure, the Romanian state has started to look towards developing major infrastructure projects through partnerships between the public and private sectors after a previous approach only concentrated on public procurement works. This approach is likely to create interesting new opportunities for private contractors looking to invest in large scale infrastructure projects in Romania.

The form of partnership used by the Romanian authorities is a concession arrangement for public works. The first of these is the construction and operation of the Comarnic-Brașov highway, awarded by the Romanian state in 2010 to a French and Greek consortium, Vinci-Aktor.

The success of the Comarnic-Brașov highway project may prove to be the catalyst for the development of similar infrastructure projects by the Romanian state. It is likely to apply this model as often as possible to address the urgent need for infrastructure development in Romania. Also, new roads construction and upgrade projects are expected to open by using public procurement works.

According to the state entity under the Ministry of Transport in charge with the development of infrastructure projects, the Romanian National Company of Motorways and National Roads (CNADNR) statements: the private sector has a key role to play in the ongoing improvement of Romania’s road infrastructure. It welcomes foreign investors and says that it believes in competition among private companies seeking to carry out infrastructure projects in Romania and that Romania needs the expertise of private investors and companies to complete infrastructure projects satisfactorily. Priority is being given to projects which are part of the Trans-European Transport Network (TEN) initiative. For foreign investors, CNADNR’s projects have outstanding potential.

Furthermore, as of the 26th of May 2016, a new legal framework regulates public procurement matters in Romania. The set of four laws (on classic procurements, sectorial procurements, concessions, and remedies) not only transposed the EU directives in the field but brought significant improvements in the legislation to create a more stable and efficient public procurement system in Romania.



The renewable energy industry in Romania has seen a remarkable level of growth since 2012, following the implementation of EU Directive 2009/28/CE.

The system for promoting the generation of electricity from renewable energy sources implemented by Romania consists of a green certificates system. The transport system operator issues the green certificates to which the generators are entitled, depending on the type and quantity of renewable energy generated and delivered to the network. The electricity suppliers acquire, on a yearly basis, some green certificates equal to a mandatory quota multiplied by the quantity of electricity supplied to end consumers, to which the supplier cost is eventually transferred.

By the end of 2013, Romania reached the 2020 target for renewable energy. The market enjoyed growth from 28 MW of installed PV capacity at the end of 2012 to 1,300 MW in November 2015. Also, wind has the highest quota at almost 3,000 MW and biomass at 100 MW, out of a total of approximately 4,500 MW of renewable energy. The country has great potential for further development of the industry, which is estimated at 1,200 GWh solar, 23,000 GWh wind and 40,000 GWh hydroelectric annually.

Nevertheless, following the dramatic decline in oil prices, the impact of US shale gas expansion in Europe and the rapid achievement of the 2020 renewable energy targets within the EU, the Romanian renewable energy market has also suffered. As with other European countries such as Spain and Italy, policy uncertainty has subsequently characterised the Romanian renewable energy market, with considerable negative effects on the industry.

Subsequently, the support scheme implemented in Romania through tradable green certificates has been reduced in scale and its implementation stalled. Subsequent legislative changes have been enforced with suspensions of the issuance of a certain number of green certificates per MWh attributed to projects.

Romanian law provides that, out of the total number of green certificates to which the energy producer is entitled to, a certain number (depending on the renewable energy source) will be deferred for a transaction between the 1st of July 2013 and the 31st of March 2017. New legal modifications are expected, while the market is a struggle to reach a stable ground.

The need for a clearer and stable strategy in this sector is a ma- jor point underlined by investors and specialists. Despite global uncertainty, a new Romanian strategy for renewable energy is expected shortly, not least due to significant local political changes and growing public awareness on the matter.

Today, the Romanian market is seeing a significant number of wind and solar projects showing signs of struggle. As such, numerous opportunities exist on the market and investment funds are starting to show an interest, acquiring quality projects at advantageous prices.

Furthermore, investors seem to be concentrating on biomass and small hydropower units. Additional projects for the increase of energy efficiency and modernisation of networks represent an incentive for investors to expand their renewable energy production capacity, especially as market liberalisation and interconnection add extra value and interest.


Since 1 January 2014, EU citizens and legal entities have been allowed to acquire ownership rights over agricultural and woodland in Romania.

However, the Romanian Parliament passed a law in 2014 granting pre-emption rights in sales of agricultural land to any co-owners, any leases of the land, neighbouring owners and the Romanian State.

In practice, foreign entities set up local SPVs to acquire land in Romania.

The main factors encouraging investment in the agriculture sector are Romania’s membership of the EU, its considerable surface (Romania holds 7.6% of the total agricultural surfaces of the EU), soil diversity and quality, the long story of activity and availability of specialised personnel in this area, the proximity of irrigation sources, the favourable rainfall and the relative proximity to both European and Asian markets.

Due to the increasing interest of foreign investors in the agricultural sector of Romania, prices for land acquisitions have reportedly doubled since Romania entered the EU.

Despite this trend, Romania still has one of the lowest prices for land in Europe, ranging between EUR 2.000 and EUR 5.000 per hectare. The focus of investors lies primarily in two regions of Romania with investments valued at EUR 200 million.

These investors include First Farms, Jantzen Development and AgriInvest (Denmark), Germanagrar and Agrarius (Germany), RaboFarm (Netherlands), Spearhead International (UK), Northbridge (Norway) and Generali (Italy).

As a result of numerous land restitutions following the fall of the Communist regime in 1989, Romania has one of the most fragmented agricultural surfaces in the EU, 31% of EU farms being located in Romania with an average surface of 3.4 hectares (compared to EU average of 14.2).

This phenomenon led to low efficiency and productivity of the lands and difficulties in implementing technological improvements. According to specialists, the solution for agricultural development and the increase in the price of land is the merger of neighbouring smaller land plots either by way of acquisition or lease.

The business model of Jantzen Development goes a step further in this direction, in the sense that, after acquiring large areas of land, this Danish investor then sells them to several smaller investors.

Another main advantage in the Agricultural sector is that the funding of agricultural investments is supported through EU funds such as the European Agricultural and Rural Development Fund (with a financial allocation for 2014-2020 of EUR 8 billion).


Highly skilled Romanian IT specialists play an important role in the country’s economic development, attracting important IT groups, IT operations of large non-IT multinationals, thousands of local entrepreneurs as well as local and foreign financial investors.

Due to the lower salary costs compared to other EU countries, Romania is expected to become a target for higher added-value services, Research & Development centres and significant domestic market projects that would include high-end solutions and technologies.

Highly educated professionals and cost effective human resources have transformed Romania into a European leader regarding the number of employees per capita in the technology sector, holding an impressive sixth place worldwide.

During the last ten years, branches of at least 50 international companies in the technology sector were established in Romania, including investment from IBM, Microsoft, Oracle, and Intel. Others are completely relocating their development business in Romania.

It is worth noting that Romanian is the second most spoken language in Microsoft and the third most spoken in the Silicon Valley. The financial performance of this sector is constantly evolving, and Romanian IT companies generated annual revenues of more than EUR 4 billion, representing a growth of 26% compared to 2013. The number of direct employees and IT freelancers exceeded 100,000 professionals at the end of 2015, compared to approximately 93,000 in December 2014. Statistics show that 60% of the total revenues were generated by companies based in Bucharest, 11% by companies based in Cluj and below 10% by the rest of the Romanian cities.

The activity of IT companies is comprised of software development (approximately 35%) and maintenance & reparations: services that are mainly provided to foreign clients whose requests vary from web applications to complex products designed for industrial lines from several domains. As a result, the IT industry was ranked second in the chart of exported services and contributed extensively to the growth of EU funds absorption.

On the merger and acquisitions market in the high-tech sector, a large number of transactions were registered in the area of online sales, enterprise resource planning solutions, near-shore services, data centres and i-cloud, whereas strong growth was also observed in telecom, financial services, and outsourcing.

The Romanian government is encouraging the development of the IT sector by constantly improving the applicable fiscal regime. A recent amendment to the specific legislation as of 2015 regulates the exemption of IT employees dealing with software development from income tax under certain conditions. Romania is expected to become a force in the IT sector, considering that it is ranked top five worldwide regarding internet speed with service costs lower than in the western countries and, more importantly, the qualification level of Romanian IT specialists being a main strategic advantage.

Stratulat Albulescu


Phone: +40 (021) 316 87 49

Bucharest Offices:

27 Ion Brezoianu St., 6th & 8th Floors, Bog’Art Center, 1st Districy, Bucharest, Romania