The banking sector’s exposure to the commercial real estate market (CRE) (excluding the residential segment) exceeded RON 100 billion in September 2024, accounting for half of its total exposure to non-financial corporations. This increase, driven by the use of commercial real estate properties as collateral, highlights the sector’s crucial role in supporting Romania’s economy, according to data from the Cushman & Wakefield Echinox consultancy company based on reports issued by the National Bank of Romania (BNR). Nearly 60% of these loans are secured by real estate assets, while the remaining share represents direct exposure to companies in the sector. Direct bank exposure increased by 10% in 2024, compared with a 6% rise in indirect exposure. Romania’s banking sector exposure to construction and real estate companies stands at 21%, one of the lowest in both Europe and Central and Eastern Europe. In comparison, the exposure levels in the Czech Republic (35%), Poland (24%) and Hungary (22%) are notably higher, while Nordic countries such as Sweden (62%), Norway (49%) and Denmark (47%) show significantly greater exposure. On the other hand, South European nations, including Greece (10%), Malta (14%) and Italy (15%) report considerably lower exposure levels. Vlad Saftoiu, Head of Research at Cushman & Wakefield Echinox: “With a banking exposure of just 21% in construction and real estate, Romania benefits from a good balance between prudence and opportunity on this highly important economic sector. This exposure, among the lowest in Europe, suggests a significant potential for growth and development, offering room for investments and innovation in the real estate market without overburdening the banking system. The steady increase in lending within this sector illustrates growing confidence and a strong appetite for commercial properties, promising a dynamic future for Romania’s real estate market.” Even though the quality of the CRE loan portfolio is still lower than the one pertaining to the aggregate total of loans given to non-financial corporations, it has seen relevant improvements in the last few years. Therefore, the ratio of non-performing loans related to construction and real estate companies was of 4.3% in September 2024 (-0.1 percentage points vs. September 2023 and -4.5 percentage points vs. September 2019), while the one for loans secured by real estate collateral (other than those granted to companies operating in the construction and real estate sectors) dropped to 4.9% in September 2024 from 6.1% a year before. The vast majority of CRE loans (86%) have a debt service coverage ratio above 2, which shows that the companies which took these loans have the capacity to cover at least twice the annual debt service payments. According to the latest assessments of the vulnerabilities related to the commercial real estate sector in Romania, risks remain manageable and the trend is constantly improving, taking into account the signs of recovery in the commercial real estate market. The construction and real estate sectors play a crucial role in the overall financial stability due to their size and interconnections with both the financial system and the broader economy. The gross value added in construction and real estate had a 15.3% share in the GDP (Q2 2024), illustrating an increase compared with 2 years beforehand (13.8% in Q2 2022), thus pointing to the relevance of these sectors in regards to financial and economic stability, but also to a substantial spillover risk to the real economy. Moreover, the construction and real estate activity Romania was above both the EU average (14.9% share in the GDP in Q2 2024) and also the levels recorded in some of the peer economies in the region (Bulgaria – 10.8%, Poland – 11.2%). Companies active in construction and real estate account for 15% of total non-financial corporations (~126.000 in 2023) in Romania, employ 12% of the national workforce (~486.000) and hold 20% of the assets related to non-financial corporations. Construction and real estate companies have a higher level of indebtedness compared with the average for the entire non-financial sector, but the overall trend has been downward over the past few years. Thus, the level of indebtedness (debt-to-equity ratio) was of 181.7% in 2023 (as compared with 158.2% for all non-financial corporations), down from 210.6% in 2022.
The famous show "Ovo" ("egg" in Portuguese), created in 2009 by Cirque du Soleil, is scheduled for April 23–26, 2026, at BT Arena in Cluj-Napoca. So far, the classic Cirque du Soleil show has delighted over 7 million spectators in 40 different countries. Despite its age, it has been reimaged, with a new set, acrobatic […]
The state-owned group Electrica is set to list the largest green corporate bond issuance in Romania, worth EUR 500 million, on the Luxembourg and Bucharest stock exchanges. According to the company's press release, the European Investment Bank is one of the key participants in the issuance. Overall investor demand at the final price exceeded the […]
Low-cost airline Wizz Air announced a major expansion of its operations in Bucharest, adding a second aircraft to its base at Băneasa Airport starting this October. The airline will relocate nine routes from Otopeni to Băneasa, five of which will be operated exclusively from the secondary airport. At the same time, six new routes will […]
The annual inflation rate in Romania rose to 5.7% in June, up from 5.45% in May, according to data published on Friday, July 11, by the National Institute of Statistics. It is the highest level this year. The consumer price index, compared to May, was 0.45%. The inflation rate from the beginning of the year, […]
A taxi driver who refused to pick up a passenger at Bucharest’s Henri Coandă International Airport on Thursday night, citing the rule that prohibits the second car in line from leaving the queue, was fined and had his professional license suspended, according to the Romanian Police. Local news channel Digi24...
Local authorities in Buzău County, in the south-east of Romania, announced the opening for traffic of the new bridge over the Buzău River on Friday, July 11. At over 1.3 km in length, it is the second-longest road bridge in the country and is part of the Lot 1 Buzău – Vadu Pașii of the […]
