Romania’s economic performance in 2024 presented a complex picture, with robust activity in infrastructure, a surge in retail sector growth, and significant strides in tourism, contrasted against underwhelming GDP growth. Colliers consultants detailed the year’s developments in a new analysis, highlighting notable trends across key sectors of the Romanian economy. Despite optimistic forecasts earlier in the year, Romania’s GDP growth for 2024 is expected to barely exceed 1%, far below the 3% projection made at the start of the year. Challenges included slowed capital expenditures and weak external demand, offset only partially by resilient consumption. Colliers consultants warned that fiscal corrections needed to address excessive budget and external deficits could introduce tax increases and public spending adjustments, creating uncertainties heading into 2025. Infrastructure development emerged as a significant bright spot, with over 100 kilometers of high-speed roads completed in 2024 and nearly 1,500 kilometers of motorways and expressways in various stages of preparation. Romania’s accession to the Schengen air travel area and anticipated inclusion of land borders in 2025 also boosted optimism for long-term economic growth. Real Estate Highlights • Retail Boom: Romania’s retail market saw record growth, driven by a 14% inflation-adjusted increase in non-food sales and high profit margins for local retailers. Several new international players entered the market, and retail developments exceeded average annual trends since 2010. • Office Market Challenges: Bucharest’s office market experienced minimal new deliveries, with leasing activity dominated by renewals and relocations. Demand for green office spaces in prime locations remained robust, further widening the gap between top-tier and underperforming properties. • Residential Market Resilience: While high-interest rates and reduced supply impacted affordability, transaction activity remained steady. However, a sharp decline in building permits in Bucharest signaled potential supply shortages and upward pressure on prices. • Industrial and Logistics: Leasing activity remained strong, with the industrial sector stabilizing after record-breaking years. Rental growth eased, and rents stabilized at €4.5-€5 per square meter for prime built-to-suit projects. Romania’s tourism sector achieved its highest levels in three decades, with approximately 25 million overnight stays recorded. Domestic leisure travel fueled this growth, while foreign visitor numbers, primarily business travelers pre-pandemic, have yet to recover fully. Investments in leisure-oriented accommodations increased to meet rising demand. Real estate investment transactions surpassed expectations, with volumes exceeding €700 million by year-end, nearly doubling 2023’s results. The industrial and retail sectors dominated, while interest in office properties showed signs of recovery. NEPI Rockcastle, the largest retail property owner in Romania, raised over €600 million for refinancing and new projects, signaling strong financing activity. While Romania faced economic hurdles in 2024, sectors like retail, tourism, and infrastructure showed remarkable resilience. Colliers consultants emphasized that strategic fiscal measures, coupled with sustained infrastructure development, could pave the way for stronger economic performance in 2025. Source: Colliers Romania