Yitzhak Hagag

2026 Trends with Yitzhak Hagag, Hagag Development Europe

2026 Trends with Yitzhak Hagag, Hagag Development Europe 617 600 BUCHAREST REAL ESTATE CLUB

10.02.2026

 Yitzhak Hagag, Co-founder and Chairman, Hagag Development Europe

What are your company’s business targets and plans for 2026?

This year, our attention focuses both on accelerating growth across our core real estate segments, and on advancing strategic diversification initiatives in the energy field.

When it comes to commercial real estate, we are targeting a strong double-digit increase in rental income portfolio-wide. We are very optimistic about this forecast which is supported by last year’s results, improved occupancy, active asset management, maturation of stabilized properties and our recent deliveries in Q4 2025.

On the residential segment, our objective is to reach a pre-sale volume of at least 75–78% by December 31st, 2026, reflecting continued confidence in demand for our projects and a disciplined approach to sales pacing and pricing.

Looking ahead, we are progressing as planned with our hotel developments, which remain a key pillar of our medium-term growth strategy. At the same time, we are actively working to unlock at least one of the planned investments in Bucharest, while continuing to evaluate new acquisition opportunities that would support our further expansion at a national level.

We see 2026 to be an important year for our company’s evolution beyond real estate development, considering our strategic cross-industry diversification move and the newly established energy division – Hagag Energy – where we are currently focused on scaling operations and building a solid presence on the local energy market, in line with our broader strategy of long-term value creation.

What were the main business results for 2025?

Last year, our company registered strong performance across its key business lines. Rental income from office and retail spaces increased by approximately 32% compared to 2024, reflecting improved occupancy and commercial performance.

On the residential side, our two projects currently under construction, H Pipera Lake and H East Residence, recorded solid sales momentum. Throughout 2025, we signed a total of 398 pre-sale agreements and 79 reservation contracts for the 728 apartments now in execution. As a result, sales reached about 65.5% of the total available stock, confirming sustained demand and strong market absorption.

These results confirm that our investment and development strategy is sound, well-positioned, and sustainable over the long term.

What economic pressures (e.g., inflation, interest rates, work force issues) or regulatory and fiscal changes do you anticipate impacting the market in 2026, and how is your company preparing for them?

Considering the latest events, we anticipate several economic and regulatory factors that may impact the real estate market in 2026 and beyond.

Inflationary pressures and elevated interest rates are expected to continue influencing construction costs, financing conditions, and overall affordability. While inflation is likely to moderate, the cost of materials and labour may remain volatile. In parallel, workforce shortages in construction and specialized services could put additional pressure on delivery timelines and costs.

From a regulatory and fiscal perspective, we are closely monitoring the potential for changes in taxation, urban planning regulations, and permitting procedures, as well as possible adjustments to incentives affecting residential buyers or hospitality operators. Any increase in fiscal burden or administrative complexity could impact investment timelines and pricing strategies.

To prepare for these challenges, our company is focusing on maintaining a balanced and resilient portfolio across residential, commercial, and hotel assets, optimizing project phasing, and securing flexible financing structures. We are also prioritizing cost control, long-term partnerships with contractors and suppliers, and conservative underwriting assumptions. At the same time, we continue to align our developments with strong sustainability, efficiency, and mixed-use principles, which we believe will remain key drivers of demand and long-term value in the local real estate market.

What do you see as the main risks for the Romanian real estate market in 2026?

There are several key risks that could affect the industry. Macroeconomic uncertainty remains in focus, particularly if related to the pace of economic growth, inflation control, and the trajectory of interest rates. Prolonged high financing costs could continue to weigh on residential affordability and slow investment decisions, especially for leveraged developers and end buyers.

A second significant risk is cost volatility and capacity constraints in the construction sector. Fluctuations in material prices, combined with persistent labour shortages, may lead to budget overruns and delays, putting pressure on project margins and delivery schedules.

From a structural perspective, regulatory unpredictability represents an ongoing concern. Sudden changes in fiscal policy, taxation, zoning rules, or permitting processes could negatively impact project feasibility and investor confidence.

Additionally, demand-side risks should not be overlooked. A slowdown in consumer confidence or purchasing power could affect residential sales velocity, while shifts in how companies use office space and how tourists travel may influence absorption in the commercial and hospitality sectors.

Overall, while fundamentals in Romania – particularly in Bucharest and other main cities in the country – remain solid, navigating 2026 will require disciplined risk management, financial flexibility, and a strong focus on product quality and market relevance.

Where do you see the most attractive opportunities for growth in 2026?

We are currently paying increased attention to residential and hotel developments, both in Bucharest and regional cities with strong economic and demographic fundamentals.

In the residential segment, demand is expected to remain resilient for mid- to upper-mid market projects that offer good locations, efficient layouts, and strong energy performance. In Bucharest, areas that offer a good infrastructure and access to employment hubs continue to raise opportunities, particularly for phased developments that allow flexibility in delivery.

Similar, the hotel segment offers compelling opportunities driven by the continued recovery of business and leisure travel. In the capital-city, we see growth potential in well-branded or lifestyle hotels that address the needs of business travelers, extended stays, and city-break tourism. When talking regional cities, opportunities are emerging in undersupplied markets with growing corporate activity, medical tourism, or strong cultural and leisure appeal, particularly where quality international-standard accommodation remains limited.

Across both these segments, we believe that projects integrating sustainability features, refined aesthetics, prime facilities, and mixed-use elements will outperform, as end users and operators increasingly prioritize operating costs, comfort, and long-term value. Overall, disciplined site selection, product differentiation, and alignment with real demand drivers will be key to capturing growth in 2026.

HAGAG EUROPE DEVELOPMENT diversifies its operations in Romania and enters the Energy sector, on the natural gas distribution and supply segment

HAGAG EUROPE DEVELOPMENT diversifies its operations in Romania and enters the Energy sector, on the natural gas distribution and supply segment 763 600 BUCHAREST REAL ESTATE CLUB

The company has opened a new local division – Hagag Energy – and plans to invest over €400 million on the energy market, while creating at least 200 new jobs in the upcoming years.

HAGAG Europe Development (TASE:HGGE) diversifies its operations in Romania and enters the energy sector through the acquisition of BTD Distribuție și Furnizare, a Romanian company specializing in infrastructure development, distribution, and supply of natural gas.

The acquisition marks Hagag’s entry in the structure of the existing company, taking over, in full, all current operations, including employees, systems, activities derived from successful tenders, as well as the rights and obligations resulting therefrom.

Moreover, the investor has opened a new local division to operate under the sub-brand Hagag Energy, and plans to invest over 400 million euros on the energy market, for the further expansion of its presence in the sector, over the upcoming years.

This new strategic division strengthens Hagag Europe Development’s local presence, complementing its already well-established activity in the real estate development sector, where the company is recognized as one of the most prominent in the industry.

“Over the past eight years, our real estate developments have redefined Bucharest’s urban landscape. Today, we are expanding our vision beyond buildings, taking a first step towards the evolution of the group here in Romania. We continue to be a trusted real estate developer, while also striving to establish ourselves as a strategic player in the energy sector, all guided by the core values that define us — long-term vision, innovation, reliability, quality, and the unwavering commitment to deliver positive social and economic impact. The distribution and supply of natural gas is, for us, just the starting line, as our global vision is to expand our company’s presence across more than one segment of the energy industry, in line with our approach in the real estate sector.”, said Yitzhak Hagag, Cofounder and Chairman of the Board of Directors of Hagag Europe Development.

Hagag Europe Development enters the local energy market in a privileged position, with a volume of 67 contracts covering the concession of the public natural gas distribution service, namely design, execution, and operation of natural gas distribution networks.

With three natural gas distribution networks completed and currently in operation, 21 in design phase, 23 under development, and 20 now in permitting, the company expects to commission a total of 64 new networks over the next 24 months.

“Romania remains the heart of our activity in Europe, and our goal is to grow here, together with the local market. At the same time, we see Romania as one of the main players in the natural gas field, with the national production covering between 70% and 80% of domestic consumption. Therefore, in the context of the energy sector’s evolution—encouraged equally by, but not limited to, the accelerated public investments in gas infrastructure and the Neptune Deep project —the decision to diversify our activity in this field comes at a time of progress not only for the industry but also for us as an organization.”, Yitzhak Hagag added.

By the end of 2027, the Energy division alone is set to create at least 200 new jobs. Furthermore, Hagag estimates an increase of at least 35% in the number of active customers generated by its natural gas distribution and supply activities.

HILS Development Launches LIFE@HILS Social Responsibility Platform and Announces Impactful Initiatives for Sustainable Urban Development

HILS Development Launches LIFE@HILS Social Responsibility Platform and Announces Impactful Initiatives for Sustainable Urban Development 900 600 BUCHAREST REAL ESTATE CLUB

HILS Development is launching the Life@HILS social responsibility platform and announcing its support for impactful initiatives in the social, educational, and environmental spheres, derived from the company’s mission to build responsibly and transform communities. HILS Development’s social responsibility projects are structured around four essential pillars of urban development: environment, education, social solidarity, and business ethics. Throughout 2025, HILS’s social responsibility efforts will be carried out in partnership with strategic allies such as Save the Children Romania, the Văcărești Nature Park Association, and UrbanizeHub.

“HILS Development has the creation, transformation, and development of new urban communities in its DNA. Over the past years, we’ve been consistently involved in the life of the new communities formed within our residential projects, as well as in supporting social and educational causes relevant to our community members. We are pleased to launch Life@HILS today, a social responsibility platform that reflects both our long-term vision for the development of the Capital and a model of active engagement for each of us, as residents of Bucharest. We are running and supporting impactful projects across the four key pillars of HILS’s strategy—environment, education, social solidarity, and business ethics—initiatives tailored to the current needs of Bucharest’s residents,” says Iulia Iana, Marketing Director at HILS Development.

Among the community projects supported by HILS are:

  • “Safe Communities for Parents and Children in the Digital Age” – a series of conferences for parents in Bucharest, organized by Save the Children with the support of HILS Development, as part of the “Ora de Net” program.
  • “Bucharest, the Parents’ City” – an initiative by HILS Development to understand the needs of parents in the Capital and how parent-friendly the city is perceived to be. Together with UrbanizeHub, discussions will be held on May 27 about the identified needs and how we can transform the city into a more suitable space for parents and children.
  • “Explorers in the World of Evening Butterflies” – the first event dedicated to the HILS community, organized in partnership with the Văcărești Nature Park Association team, will take place on the evening of May 26, at HILS Brauner.

Hagag Development Europe signs operating agreement with Radisson Hotel Group for its first hotel development in Bucharest

Hagag Development Europe signs operating agreement with Radisson Hotel Group for its first hotel development in Bucharest 763 600 BUCHAREST REAL ESTATE CLUB

H Vasile Lascar to become the first Radisson RED in Romania – Radisson RED Bucharest Old Town – following an over EUR 13 MLN investment

Real estate investor-developer Hagag Development Europe consolidates its operations in Romania by expanding its presence to the hospitality segment. The company has selected Radisson Hotel Group as operator for its first hotel development in Bucharest, to open under the Radisson RED brand, and started the permitting procedure to revamp and repurpose its property on 5-7 Vasile Lascar Street, in central Bucharest.

This project will be developed following an over 13 million EURO investment, and involves the transformation of an office building dating back to the 1940s. Historically serving as the offices of the Institute of Hydroelectric Studies, the old office maze will be fully renovated and redesigned to provide 104 guest rooms in the historic Old Town area, offering guests a unique blend of modern amenities and historical charm.

“We have a lot of trust in the local hotel market and we believe that there is no better partner than Radisson Hotel Group to support our vision of transforming H Vasile Lascar into a lifestyle destination that will not only enhance our property’s value, but will revive one of Bucharest’s most elegant neighbourhoods. Our ambition is to offer stylish hotels with modern design and meaningful experiences, at a fair price, and we are delighted to see our properties being associated with one of the largest international hotel chains.”, Yitzhak Hagag, Co-founder and Chairman of Hagag Development Europe, stated.

The new Radisson RED Bucharest Old Town will be the first Radisson RED property in Romania and in Bucharest, which the Group has identified as a key city for growth.

Radisson RED Bucharest Old Town will boast a restaurant and bar, a lobby incorporating a co-working lounge and an outdoor terrace, and versatile meeting spaces. A multipurpose room, together with the pop-up venue on the fifth floor, will cater to meetings, events, product launches, and social functions. Additionally, guests will have access to a fitness area, ensuring a comprehensive hospitality experience.

HAGAG DEVELOPMENT EUROPE adds new mixed-use project to its local portfolio: H HERĂSTRĂU PARK

HAGAG DEVELOPMENT EUROPE adds new mixed-use project to its local portfolio: H HERĂSTRĂU PARK 763 600 BUCHAREST REAL ESTATE CLUB

The company has recently signed a partnership agreement with Niro Investment Group and acquired 50% of the multifunctional building located on 23-25 Ghețarilor Street

Real estate investor-developer Hagag Development Europe has recently signed a partnership agreement with Romanian investment group Niro Investment Group for the acquisition of 50% of the multifunctional building located in the proximity of Herăstrău Park, on 23-25 Ghețarilor Street. In addition, the company exclusively took over the operating and management activities for the entire building.

The property returns to the market under Hagag’s brand, and will be officially known as H Herăstrău Park. With this new portfolio addition, Hagag Development Europe extends its current offer with over 6,800 square meters of office and retail space.

H Herăstrău Park enjoys a gross built area of approximately 10,000 square meters displayed across a high regime of 1UGF + GF + 4F, with a leasable area of over 6,800 square meters comprising retail space on the ground floor and office on the upper levels, to which about 100 underground and above-ground parking spaces are added.

“H Herăstrău Park marks two important milestones for our company: on one hand, we are consolidating our current offer in terms of office and retail space, and, on the other hand, we are expanding of our presence towards the northern part of Bucharest, beyond the residential projects currently under development in the area. We are excited about this new transaction and about adding to our portfolio a new mixed-use project that will help us respond better to the growing demand in the market.”, said Yitzhak Hagag, Cofounder and Chairman of Hagag Development Europe.

Over the upcoming months, the building will undergo a light refurbishment process focused on revamping all common areas, and will be welcoming its first tenants beginning of July 2025. 18% of the available office space has already been leased, with the developer’s leasing team currently in advanced discussions to rent out over 2,500 square meters of office and retail space. The company estimates an occupancy rate of at least 70% by the end of this year.

“We feel honoured for the trust that our partner has invested us with, and confident about the evolution of this collaboration, just as we are optimistic about the positive dynamics of the leasing activities. Our forecast shows that by the end of this year we will be reaching an occupancy rate of at least 70% for the entire building.”, Yitzhak Hagag added.