imobiliare

REIT legal initiative submitted in the Romanian Parliament

REIT legal initiative submitted in the Romanian Parliament 900 600 BUCHAREST REAL ESTATE CLUB


REIT legal initiative submitted in the Romanian Parliament

Following the joint initiative of Bucharest Real Estate Club – the main industry’s association – and Bucharest Stock Exchange to promote the regulation of Real Estate Investments Trusts (REIT) on the Romanian market, the legal initiative was submitted in the Parliament earlier this month.

22.04.2024

REITs are investment vehicles which facilitate the access of individuals and legal entities to a diversified portfolio of real estate properties. Through these entities, investors can access and invest in real estate in a simplified and efficient manner. An important aspect of REITs is that they are listed companies on a regulated exchange, which ensures transparency, liquidity, and proper oversight for investors.

The lack of an appropriate legal framework for REITs in Romania constrains the development of this market, depriving the Romanian economy of the opportunities created by this type of instrument, such as the existence of a new source of stable financing.


Despina Ponomarenco, President of BREC

“Globally, the estimate for the value of REITs is 3,000 billion Euros. Regarding the EU member states, Romania, Croatia, Estonia, Latvia, Lithuania, Malta, and Slovakia are the only member states that have not regulated a specific tax regime for real estate investment companies. The Romanian real estate market has faced many challenges in recent years: the restrictions due to the COVID pandemic, inflation, the war on the border, the lack of predictability and, particularly for Bucharest, the urban gridlock. Under these conditions, the regulation of this instrument would attract new investors who are not present on the market.”


Adrian Tănase, CEO, Bucharest Stock Exchange

“This project takes into account the need to develop the local capital market and transform it into a viable channel for investing Romanians’ savings in real estate, a sector that is of great importance for Romania’s economy. The regulation of REIT-type instruments will attract investments both from the population and from Romanian or foreign institutional investors, thus generating an extension of economic activity in all sectors impacted by the real estate industry.”

The demand for new residential units is rebounding

The demand for new residential units is rebounding 936 516 BUCHAREST REAL ESTATE CLUB

29.09.2023

The demand for new apartments in Bucharest registered a 46% increase in the second quarter of the current year compared to the same period of the last year, while the supply has a minus of 26%, as shown by the immobiliare.ro analysis presented at Residential Conference – The Future of Quality Living organized by BUCHAREST REAL ESTATE CLUB (BREC) this week in Bucharest.

The data show increases in demand in every area of Bucharest, starting from 11% for the West area, up to 54% for the North area.

The offer is decreasing: -44% in the North, -31% in the East, -22% in the West and -16% in the Center. Only the southern area has an increase of 6% for the supply of new apartments. Prices register decreases of 2% in the West, 3% in the East, 4% in the Center and 9% in the South. The North is the only area where prices increased with 7%.

“At the level of the Bucharest market, demand has recovered from last year’s dramatic drop, from the second quarter. At that time the outlook was bleak: war on our border, galloping inflation, rising interest rates, rising prices. However, the market has shown maturity and resilience, and even if we have not yet exited the risk zone, we have reasons to look with some optimism at the next period. We hope that the impact of the new fiscal changes will not be likely to affect the course of the market, and if this is the case, then we will be able to see a beneficial 2024 for the residential market”, says Dan Niculae, Managing Director, Imobiliare.ro Finance.

In the context of the VAT increase from 5 to 9%, the elimination of facilities for the construction industry as well as the increase of the minimum wage for this field, the medium and long-term forecast is of an increase in housing prices.

“The data presented show a clear decrease in supply of 26% in Q2 2023 compared to Q2 2022 and 12% in Q2 2023 compared to Q1 2023. The difficulty of authorizing new projects, given the urban gridlock in Bucharest, will cause a sharp decrease in the supply of new homes and price pressure”, says Despina Ponomarenco, BREC President.

The new unit rental segment saw significant demand growth of 63% YOY and 17% compared to Q1 2023. Broken down by area, the increase in demand for new apartments for rent starts from 49% to 71% in Bucharest.