In the 2013 – 2022 period, the four major economic sectors dominating the FDI stock had a 92.8% contribution to its overall growth. In absolute terms, industry went up by EUR13.1 billion (+45.3% compared to end-2013), trade by EUR12.7 billion (+198.8%), construction and real estate transactions by EUR12.3 billion (+196.5%) and financial intermediation and insurance by EUR5.7 billion (+66.8%).
The FDI breakdown in greenfield enterprises by the main economic activityies placed construction and real estate among the top three receivers, with a share of 18.2% of the total FDI stock, after manufacturing industry (28.7%) and trade (23.4%). The contribution of these sectors to the FDI stock corresponding to greenfield enterprises remained relatively stable throughout 2022 compared with 2021.
“This positive dynamic once again illustrates the important role the real estate sector (through both domestic and foreign capital) has in the development of other economic sectors in Romania, a fact strongly confirmed by the significant expansion of all the real estate market segments overr the past 10 years”, said Vlad Saftoiu, Head of Research Cushman & Wakefield Echinox.
The real estate and construction segment attracted approximately EUR1.2 billion in FDI in 2022, accounting for 17.2% of the overall FDI stock in 2022, the C&W Echinox analysis shows.
Under these circumstances, the real estate and construction segment became the third largest recipient of foreign capital in Romania, after industry (39.2% of the FDI stock) and trade (17.7%) and ahead of financial intermediation and insurance (13.2%). The total FDI flows in Romania stood at EUR10.039 billion in 2022, boosting the FDI stock to EUR107.9 billion.
“If we also consider the foreign direct investments attracted by retail, investments totaling approximately EUR1.9 billion in 2022, the real estate sector has directly and indirectly benefited from a foreign capital inflow of more than EUR3 billion, a level comparable to that of the manufacturing industry (EUR3.1 billion)”, added Vlad Saftoiu.
FDI includes the paid-up capital and the reserves related to a non-resident investor holding at least 10% of the voting power or of the subscribed share capital of a resident enterprise, debt instruments between the investor or the group to which the investor belongs and the resident direct investment enterprise, as well as the profit reinvested by them.
The consistent increase of the FDI flows in real estate and construction during 2022 has also reflected in the evolution of the total stock of modern commercial space, with foreign investors remaining a leading player across all market segments, owning more than 70% of the total stock of this type of spaces, at national level.
Therefore, real estate developers delivered new office, retail and industrial projects with a total area of around 1.1 million square meters at country level, in 2022, with the modern real estate stock reaching 14.9 million sqm at end-2022. Taking into account the projects completed so far in 2023 and those due to be delivered by end-2023, the modern space stock will exceed the 15.5 million sqm threshold.