Foreign direct investment (FDI) in Romania’s real estate and construction sectors has tripled in absolute value in the last decade (2014-2024), reaching EUR 21.6 billion and accounting for 17.3% of total FDI stock at the end of last year, according to a Cushman & Wakefield Echinox analysis based on central bank data.
Foreign capital inflows contributed to the expansion of modern real estate stock (office, retail, and industrial & logistics) from approximately 5 million sqm in 2014 to nearly 17 million sqm at the end of 2024, with roughly 70% being owned by foreign investors, the same source said.
The overall FDI stock reached EUR 125 billion in 2024, with the real estate and construction sector among the top recipients of net foreign capital inflows last year, experiencing a year-on-year increase of EUR 651 million. The growth was mainly driven by a restart of intra-group lending and by a reduction of debt-type instruments.
According to Cushman & Wakefield Echinox, in terms of economic activities, 86.6% of the total net FDI stock is concentrated in four sectors: industry (37.1%), construction and real estate transactions (17.3%), trade (17.2%), and financial intermediation and insurance (14%).
They grew at different rates between 2014 and 2024, however, with industry seeing a more modest increase of 54.4% (+EUR 16.3 billion), while trade (+EUR 14.8 billion) and construction and real estate (+EUR 15.1 billion) more than tripling their figures. Financial intermediation and insurance grew by 123% (+EUR 9.6 billion).
“These dynamics led to a decline in the industry’s share of total net FDI from 48.4% in 2014 to 37.1% in 2024 (-11.3 percentage points), while construction and real estate gained 6.7 percentage points (from 10.6% to 17.3%) and trade gained 6.4 percentage points (from 10.8% to 17.2%),” reads the report.
Bogdan Sergentu, Head of Valuation & Consulting at Cushman & Wakefield Echinox, commented: “The real estate and construction sector continues to be one of the most stable and attractive industries for foreign investors, even in a context of economic and geopolitical uncertainties. The positive evolution of foreign capital flows and the high share of greenfield investments illustrate investor confidence in the Romanian market’s potential and in its ability to generate competitive long-term returns. The yields for prime assets in Romania are 1 – 2 percentage points above the reference values from most Central and Eastern Europe countries, thus representing a clear competitive advantage.”
The total FDI flows in Romania were of EUR 5.6 billion in 2024, down 17% from the previous year, mainly as a result of the global uncertainties and the domestic vulnerabilities such as a modest economic growth, a deepening budget deficit, and a politically sensitive electoral context, according to the same report.
irina.marica@romania-insider.com
(Photo source: Tinnakorn Jorruang/Dreamstime.com)
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