The real estate market is in the spotlight in Romania, according to Bogdan Papandopol, Partner at Dentons in Bucharest.
Specifically, the country is “seeing the logistics area going quite well,” Papandopol explains, with developments in and around Bucharest leading the pack. He notes that the capital city is not alone in registering growth, pointing to an increased level of investments occurring in other large Romanian cities as well, including Arad, Ploiesti, Constanta. The office real estate market is also registering healthy growth, the Dentons Partner reports, in particular in Bucharest. Also notable is the shopping center sector, and Papandopol reports that, “while not as big as the logistics sector, we are definitely seeing some good deals in commercial real estate not only in Bucharest but also other major cities in Romania.”
In regard to the residential real estate side, Papandopol points to the recent so-called "Darea in Plata” ("giving in payment") legislation, which affects credits with a value under EUR 250,000 meant to fund the purchasing, building, or refurbishing of residential real estate. The main update is intended to help consumer notify their banks and initiate a procedure that ultimately results in returning the collateral to the bank and discontinuing the loan. “We have to see the impact this will have on banks and how this will be reflected either in terms of the conditions that banks set up, the end cost of credits, durations of loans, etc.,” Papandopol repots. "Ultimately, it does look like it will make it more difficult to access such loans which may impact the residential landscape.” As to the driving force behind the legislation, the Dentons Partner notes that “it is difficult to comment precisely as to the cause of it in an electoral year. This was a widely-discussed legislative update. We’ll see, based on how banks react, if that legislation will impact on the development of the residential projects."
Editor’s Note: This report is part of our newly-expanded “The Buzz” feature, which provides regular coverage of the events, trends, and developments of significance in and across CEE’s legal markets from the perspectives of the senior lawyers who work within them.