AREI (The Association of Real Estate Investors) is Romania’s most significant association of real estate investors and developers. It brings together leading market players, representing the voice of all four sectors, office, residential, industrial and retail – in relationship with the other private and public stakeholders.
As Romania’s leading association dedicated to real estate, what is the driving force pushing you forward and overarching mission?
A.C.: AREI's main purpose is to defend the rights of its members and advance an equitable and just legal environment. It is our mission to “lead by example” – while remembering that real estate industry players are after all a vital part of urban development across all its sectors, putting together the offices we work in, the houses we live in, and the establishments where we shop and go for entertainment. We are represented not only at the Bucharest level, but also at the national level thanks to our diverse member makeover and are continually consolidating the association's footprint by encouraging new members that are committed to adhere
V.L.: One focal point in AREI's mission is to work and build a transparent and comprehensive perception of the real estate industry, emphasizing the business value and moral code that our members already follow. However we do see outside of our association examples in the market that do not play by the book.
Unfortunately, any sideslip of a real estate developer reflects upon our association and the industry in itself. Ultimately, we want to instill a code of good practices to help change the perception about Romania’s real estate market.
What are the most ardent legislation issues AREI aims to solve, and solutions that could help level the real estate market?
A.C.: In the past few months, we focused on Law 114 - a 1996 piece of legislation regarding housing standards and norms residences. Law 114 suffers from a great deal of gaps that result in mixed interpretations from the authorities. During the period affected by the pandemic we worked on and advanced some important initiatives such as: AREI guidelines on workforce re-entry measures for offices; Legislative initiative on the postponement of rent payments, instead of exemption for both retail and offices, during the state of emergency; and contributed with our expertise to endorse the Government initiative on the state aid scheme for partial payment of rents for retail. We also had a very constructive dialogue with the Government that was conducive to the re-opening of the large shopping centers after the lockdown period. Likewise, Law 50 regarding building permits should be more flexible regarding the time frame developers have to obtain all the documents needed for utilities connection (I.e.water, electrical energy, sewage, etc.) since providers usually act after their own internal laws. Bottom line: the main issue is the lack of procedure and consistency. The most recent proposal in the legislative system is to put all real estate laws under a single roof, known as the Construction Code. We were present when the draft was conceived and we fully support a set of updated laws and regulations, much needed by the rapidly evolving real estate sector.
Regarding the discussions you had with authorities - what are some of your most important wins and are there any notable standstills?
A.C.: The bright side is that during our discussions with central authorities, we were always met with respect and they showed genuine interest towards solving the problems we were raising. For example, the inspectorate for emergencies immediately took note and understood our deadlocks that rose from the daily implementations of the pieces of legislation under review as part of the public consultation process and. By contrast, local authorities (especially Bucharest’s city hall) are more rigid and it's hard to establish a clear cut relationship with them.
V.L.: Indeed, we're bumping into the reluctant attitude of some local mayors, but sometimes the day is saved by counselors who are eager to find solutions. Following the Municipal Mayor's decision to suspend urban zonal plans (PUZs), we were pleasantly surprised by District 2 and 6 mayor's openness towards working together to find a solution to the urgent urbanism problem.
What is your concrete vision for how the Bucharest of the future should and can look like?
A.C.: First and foremost, from my point of view, Bucharest should have better planned integrated projects that give the urban scenery a smoother, more consistent look. Developers alongside authorities must acknowledge that the city is already busy enough and there are areas where you simply cannot build anymore. Reducing traffic is a top priority and by following European solutions (bigger taxes, no parking on main streets, etc.), one that should be easy enough to solve.
V.L.: Besides what Antoanela already mentioned, I would like to see more green areas and bicycle lanes in Bucharest because nowadays all industries are starting to turn their attention towards sustainable business practices. Green buildings are yet another goal that the real estate industry is focusing on in the capital of Romania, with green spaces still missing compared to how it could, and I hope, will be.
From your professional perspective how does the Romanian real estate market compare to other markets of CEE, and what trends should international investors keep an eye out for?
A.C.: From a bird’s eye view, in Romania it is in fact much easier and faster to obtain a building permit than in Western European countries. For instance in Spain it can take up to seven years. Similarly, in other countries it's mandatory to design the entire infrastructure of the project before applying for the building permit. If you are a law-abiding investor, Romania has a market full of opportunities, especially in the residential sector where there is a stock of over 50% ageing apartments in need of a makeover. Regardless of all the challenges mentioned before, the Romanian market is a lot more lenient and welcoming than other countries of CEE.
V.L.: From my point of view, Romania has a fast maturing market that is more than open to savvy investors. At the moment we are curating an incipient legislative project that will impact international real estate industry players – REITs (Real Estate Investment Trusts). This piece of legislation should put Romania on the map alongside other EU countries. Also, green projects are becoming a priority, with dedicated laws for parking spots for electric vehicles, the revitalization of national railways, among many other shifts.
