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Romania Constructions and Real Estate Report - Q4, 2014

  • January 2015
  • -
  • Emerging Markets Direct Media Holdings
  • -
  • 13 pages

This report covers the market developments in Q3/2014 and the data available as of December 2014

The construction works index accelerated its decline and dropped by 11.7% y/y in Q3/2014, after having decreased at double-digit annual pace in the previous two quarters. The decline in Q3 was mainly driven by the poor performance of the civil engineering segment, which diminished by 26.7% y/y over the quarter and by 24.7% y/y in January-September 2014.

The buildings segment recorded better y/y evolution in Q3, yet its performance has been uneven during the first three quarters of the year. Both the residential and non-residential sub-segments demonstrated temporary, seemingly unsustainable periods of expansion. On the residential segment, demand remains subdued -- but real estate developers have redesigned their projects to adjust to market reality, while banks are also extending mortgage loans under a state-guaranteed programme, likely to encourage the construction of new buildings.

The real estate market was more dynamic in terms of investments and transactions, particularly on the commercial segment. According to market data, the value of real estate investments in 2014 increased four times compared to 2013. Of the total, deals involving retail and office properties accounted for a cumulated 75% share. Investment activity on the commercial real estate market is expected to continue growing in 2015, with the office segment projected to record the most dynamic pace.

Key points:

oConstruction works index plunges 11.2% y/y in Q3/2014

oGovernment scales down road infrastructure plan, to concentrate on lower grade roads

oNumber of real estate transactions up 2.5% y/y in January-October 2014

oValue of real estate investments quadruples to EUR1.2bn in 2014

oNEPI pays EUR148mn for Promenada shopping mall in Bucharest

oImmofinanz to invest EUR85mn in expansion, upgrade of business park in Bucharest

Table Of Contents

Romania Constructions and Real Estate Report - Q4, 2014
Executive summary4

Market overview5

Construction works index plunges 11.2% y/y in Q3/20145

Romania records steepest y/y drop in construction output in EU in Q3/2014, further in October6

Investments in national economy decline y/y in Jan-Sep 2014, construction's stake rises7

Number of residential permits drops 3.5% y/y in Q3/20147

Number of finished dwellings up y/y for third consecutive quarter8

Value added by construction forecasted to decline 1.7% y/y in 2014, to resume growth next year8

Infrastructure9

Government scales down road infrastructure plan, to concentrate on lower grade roads9

Construction of motorways remains sluggish in 20149

EU increases financing of two Romanian motorway projects by EUR262mn10

Greece's Aktor and its local partner are awarded EUR100mn motorway section contract10

CNADNR opens EUR100mn tender for modernization, rehabilitation of Moisei-Iacobeni road10

Real estate10

Number of real estate transactions up 2.5% y/y in Jan-Oct 201410

Residential prices drop for second consecutive quarter in Q2/201411

Real estate investments value quadruples to EUR1.2bn in 201412

NEPI pays EUR148mn for Promenada shopping mall in Bucharest12

Tiriac Imobiliare to invest EUR30mn in office building in Bucharest12

Immofinanz to invest EUR85mn in expansion, upgrade of business park in Bucharest13



Table 1 Construction sector 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 2012-2014 (quarterly, number, y/y)7

Table 6 Completed dwellings per type of financing in 2012-2014 (number, y/y, quarterly)8

Table 7 GDP and Construction output in 2012-2017f (y/y)8

Table 8 Residential property price indices in 2010-2014 (2009=100)11



Figure 1 Construction works index in 2005-2014 (monthly, y/y)5

Figure 2 Construction works index in 2005-2014 (monthly, 2010=100)5

Figure 3 Investments in national economy by sector in 2013-2014 (% in total)7

Figure 4 Licenses for residential buildings issued in 2007-2014 (number, monthly)7

Figure 5 Construction gross output in 2003-2017f (bn 1995 $, y/y)9

Figure 6 Number of real estate transactions in 2012-2014 (thou, monthly)11

Figure 7 Residential property price indices in 2011-2014 (quarterly, y/y)12


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