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Romania Construction and Real Estate Report - Q2, 2014

  • July 2014
  • -
  • Emerging Markets Direct Media Holdings
  • -
  • 14 pages

This report covers the market developments in Q1/2014 and the data available as of June 2014.



The construction works index fell by 10.2% y/y in Q1/2014, driven down by the 25.4% y/y plunge of civil engineering works, apparently caused by the 47.5% cut in the government's capital expenditures. While the activity in Q1, given the seasonal factors, might not have a major impact upon full-year performance of the construction sector, the decline in April is more relevant.



In April 2014, the construction works volume further contracted by 7% y/y, on the back of the major 24.3% y/y contraction of the civil engineering segment. The fewer public funds earmarked for investments and the delays in starting major infrastructure projects affect visibly the activity in constructions. Capital spending dropped by 30% /y in April after the 48% y/y decline in Q1.



The public roads company boasts on intentions to open tenders for other 375km of motorways in 2014, worth a cumulated amount of EUR 3.8bn, but even if these tenders are launched, effects upon the construction sector are likely to be visible only starting with 2015, when the works at the projects will probably start.



The other segments of the construction sector however performed well in Jan-Apr 2014. The activity in the residential buildings sector advanced by 14.1% y/y in Q1/2014, while non-residential construction works surged encouragingly by 18% y/y.

The commercial segment- retail and office in particular- indeed has been more dynamic in the past quarters. Activity on the market has witnessed higher dynamics and many developers announced plans to develop office and retail projects in the near future.



Key points:

oConstruction works index falls 10.2% y/y in Q1/2014

oShare of construction in GDP diminishes to 3.7% in Q1/2014

oPublic roads company CNADNR plans to auction highway projects worth EUR 3.8bn in total this year

oNumber of real estate transactions rises 8.1% y/y in Jan-Apr 2014

oNEPI to complete two retail projects in 2014, project pipeline in Romania exceeds EUR 460mn

Table Of Contents

Romania Construction and Real Estate Report - Q2, 2014
Executive summary4

Market overview5

Construction works index falls 10.2% y/y in Q1/20145

Romania records among steepest y/y drop in construction output in EU in Q1/20146

Investments in national economy decline y/y in Q1/2014, construction's stake reaches 13.8%7

Number of residential permits rises y/y for third consecutive quarter in Q1/20147

Number of finished dwellings up 7.7% y/y in Q1/20148

Construction sector forecasted to rise 1.8% y/y in 20148

Share of construction in GDP diminishes to 3.7% in Q1/20149

Construction materials market value might drop below EUR 3bn in 2014- producers' association10

Infrastructure10

Public roads company CNADNR plans to auction highway projects worth EUR 3.8bn this year10

Romania approves only 4.2% of annual planned EU-funded infrastructure projects in Jan-May 201411

CNADNR launches tenders totaling 115km of highway sections in H1/201411

Astaldi-led consortium to build EUR 28mn underground passage in Bucharest11

Comnord starts building EUR 23mn office compound in Bucharest12

Real estate12

Number of real estate transactions rises 8.1% y/y in Jan-Apr 201412

Residential prices inch up 0.2% y/y in Q4/201313

AFI Europe secures refinancing of EUR 220mn loan for Cotroceni mall13

NEPI to complete two retail projects in 2014, project pipeline in Romania exceeds EUR 460mn14

Globalworth acquires several land plots in Romania for commercial project development14

Skanska to invest EUR 33mn in new office building in Bucharest14



Table 1 Construction sector's performance in 2007-2014 (y/y)6

Table 2 Construction works index in 2011-2014- Quarterly performance by structure (y/y)6

Table 3 Construction works index in 2011-2014 - Quarterly performance by destination (y/y)6

Table 4 Construction output in 2013-2014 - Romania, EU28 (y/y, in %)6

Table 5 Licenses for residential buildings issued quarterly in 2011-2014 (quarterly, number, y/y)7

Table 6 Completed dwellings per type of financing in 2011-2014 (number, y/y, quarterly)8

Table 7 GDP and Construction output in 2012-2014 (annual, quarterly, RON mn)9

Table 8 GDP and Construction output in 2012-2017f (annual, y/y)10

Table 9 Reimbursement and absorbtion stage of SOP-T funded projects in 2007-May 201411

Table 10 EU funding approved by Romanian authorities in Jan-May 201411

Table 11 Tenders for highway sections launched in H1/201411

Table 12 Residential property price indices in 2010-2013 (2009=100)13

Table 13 Residential property price indices in 2011-2013 (quarterly, y/y)13



Figure 1 Construction works index in 2005-2014 (monthly, 2010=100)5

Figure 2 Construction works index in 2005-2014 (monthly, y/y)5

Figure 3 Construnction works index, rolling 12M in 2005-2014 (2010=100)5

Figure 4 Investments in national economy by sector in 2013-2014 (% in total)7

Figure 5 Licenses for residential buildings issued in 2007-2014 (number, monthly)7

Figure 6 Construction works index by structure elements in 2012-2017f (%, y/y)8

Figure 7 Construction works index by type of construction in 2012-2017f (%, y/y)9

Figure 8 Construction gross output in 2003-2017f (bn 1995 USD, y/y)9

Figure 9 Number of real estate transactions in 2012-2014 (monthly)12


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