UNFOLDING 2025: GROWTH, CHANGE AND OPPORTUNITIES
Navigating political, fiscal, and urban uncertainties while driving major investments remains the name of the game in 2025.
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Following a year of significant political turbulence, 2025 continues under the shadow of instability due to the annulment of the presidential election and the upcoming electoral campaign this spring. Government-announced fiscal changes, combined with workforce reductions, are set to impact the economy and real estate market. However, two key developments bring optimism: infrastructure advancements: 1,200 km of completed highways, 623 km currently under construction, and an additional 730 km in the tender phase and full Schengen accession, unlocking new economic and mobility opportunities.
“We are currently developing projects with a total gross development value (GDV) of EUR 1.5 billion and an additional pipeline of EUR 1.8 billion, reflecting the company’s expanding portfolio and our objective to access new opportunities in the market. Our impact on Bucharest and the local economy is truly unparalleled and goes beyond job creation and tax contributions, including improving the standard of living for thousands of residents and providing top-notch office spaces for dozens of thousands of professionals.”
Given that there is no black swan event, Romania’s GDP is set to grow moderately in 2025, with a consensus of c.a. 2.1% – 2.6%. EU-funded infrastructure projects and accession to the Schengen Area shall provide immediate productivity benefits that will support the economy. While FDIs decreased by 12% in 2024, we notice a consolidation trend among local capital. The pool includes exited entrepreneurs, entrepreneurs with strong cash-flowing businesses, C-level corporate managers, local and regional private equity and venture funds, and the 400 million EUR NRRP funds to support Romanian SMEs on their growth path. These capital sources understand the long-term benefits of investing in operational businesses and compete for the next investment opportunity, fuelling the domestic economy.
”We entered 2025 with ambitious plans but with a cautiously optimistic forecast about the timeline of our developments in Bucharest. We estimate that we will receive the building permit for phases II and III of H Pipera Lake over the following months. By the end of Q2 we will finalise construction on the commercial building in Pipera, and we plan to reprise works on H East Residence. Moreover, we are focused on completing H Stirbei Palace and move forward with the reconversion of the old office maze on 5-7 Vasile Lascar which will mark our fifth renovation/redevelopment project in central Bucharest.”
2024 brought many surprises to the political scene, leading to the difficult decision to cancel and postpone the Presidential election due to foreign state actors’ involvement in a fair election process. This was a warning sign for the political class, which opened a serious conversation on administrative reform. Pushed by the general public and the growing budget deficit, layoffs in the public sector might increase unemployment in less optimally developed regions. On the bright side, this might increase workforce availability for production companies, positively impacting the external trade balance.
”The regulatory landscape is shifting toward stricter environmental and sustainability requirements, influencing both new developments and existing asset management strategies. Taxation changes and fiscal adjustments following the 2024 elections may impact financing structures and transaction costs. Particularly for Bucharest, the draft of the new general urban plan is still pending, being currently delayed due to the preparation and correlation of various studies. Its approval would represent, though, a game changer for the current real estate scenery, which is marked by a perpetual blockage due to the suspension and cancellation of the sector zonal urban plans and specifically due to the central municipality’s reluctance in approving any sort of new zonal urban plan.”
REAL ESTATE TRENDS 2025
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