Real estate transactions soared by 150% in 2007 compared to the previous year, making the country the most booming property market in the Balkans.

Romania’s real estate business was worth more than €2 billion last year, with the most significant transactions involving the sale of office space in Bucharest and the country’s cities, local news agency Mediafax reported.

Analysts say the Romanian real estate market will continue to sustain its upward trend, at least in the short term.

“Romania’s mortgage market could double reaching €8 billion by 2009″, says Ana Cernat, the mortgage loans division manager at the country’s Bancpost bank.

But even if that happens, mortgage loans in Romania will still be very low in relation to the country’s Gross Domestic Product, especially in comparison to most western European countries, Cernat added.

Mortgage loans stood at 3.4 percent of the GDP at the end of November 2007.

The campaign to put up a tourism brand for Romania saw a 2 million euro budget approved on Wednesday by the Government. Other 9 million euro will be spent on promoting Romania in Spain and Italy, also using state funds. At least four attempts to create such a brand took place in the past few years, proving each time to be completely worthless.

Tourism Ministry state secretary Lucia Morariu claims that Romania has 75 million euro allocated for promoting tourism projects, within the Regional Operational Program, but the state has to pay for the projects first, then the discount from EU funds can be made. According to Morariu, the new branding initiative has nothing to do with the previous attempts: “In case the brand we create is successful, this will also influence the country brand”.

“The Eternal and  fascinating Romania” project cost 6 million euro, while the “Romania - always surprising” was another 1.7 million dollars. Another project in 2007, Romania - Simply Surprising, was cancelled because it didn’t communicate the essence of Romania for any potential visitor.�

An international airport with an annual capacity of one million passengers will be constructed in two years, at the most, in the central locality of Ghimbav, close to the city of Brasov. The investment will total 100m euros. The registration act of the company International Airport Brasov Ghimbav was signed last week at the Brasov County Council. The works are likely to start in 2007 and will take 18 months. “The airport, having a capacity of one million passengers a year, is designed for the landing and take-off of medium size aircraft,” said Ioan Toma, representative of the Canadian company
“Intelcan,” holder of 64.3 per cent of the airport’s administration company. Both the passenger and the cargo terminals will have a modular structure, allowing further extension in the coming years. The airport will cover 65 hectares that were made available by the purchased of the lands placed at the Canadian Company Intelcan Technosystems Inc. disposal. This one is also the majority shareholder of the company that will administer the Brasov-Ghimbav International Airport, holding 64.3 percent of the shares. Other stakeholders include Brasov County (20 percent), the city of Brasov (10 percent), and Covasna and Harghita counties as well as the city of Ghimbav, which each hold a five percent stake.
According to a decision of the Brasov County Council, Intelcan is responsible for implementing the project for a fixed cost of 76 million euros within 18 months from the time works begin. Moreover, the Canadian company is responsible for obtaining the necessary financing. Intelcan will operate the future airport together with Ottawa International Airport. Local authorities from the three counties will coordinate infrastructure and utilities works for the airport. The airport location was chosen due to the local economic development and the need for companies to ship export goods by air.

Moreover, the distance from Brasov to other international airports in Romania is relatively far.
Intelcan is a world leader in air traffic management systems and has clients in 60 countries. On Monday, 14th November 2005, the papers were signed for the turning up of the administration society for the new Airport in Brasov. A delegation of IntelCan Company, managed by its president, Mr. Roland Weinsberger, arrived in Brasov on 14th November in order to sign up the papers for turning up the administration society for the Airport in Brasov. For the 1st phase, the Canadians will
own 51% and the District Council will own 49%. The president of DC Brasov, Aristotel Cancescu announced that, after a while, they will make over part of the stocks to the District Council from Harghita and Covasna or to the Local Council Ghimbav. Cancescu also underlined that, at the moment, Brasov needs a medium airport, the costs being estimated at 100 million dollars. Mr. Cancescu affirmed that they would lend the necessary money without governmental, district or
local guarantees. The expectations are to start the works for the airport by the end of his mandate and to be over by 2009, as the Canadians say.

The Rothschild banking family officially entered the domestic housing market last week in a deal worth 104 million euros for a 60 percent stake in three housing projects, which are controlled by the Israeli owners of Euro Habitat, the developer of Planorama project in Colentina.

The three projects are located in Ploiesti, Brasov and Bucharest’s Colentina district, and will include approximately 8,000 houses, in the wake of investments expected to amount to almost one billion euros.

“The deal, valued at 104 million euros, was sealed on Monday evening, in Piraeus bank’s Carol Boulevard headquarters. The three projects will be developed under a different brand, which will be made public next year, when works begin and the projects are launched,” Haim Zemer Tov, CEO at Euro Habitat and a stakeholder in the three projects.

The number of shopping centres outside Bucharest has doubled this year from 9 to 18, and is expected to double again next year, as another 15 or 16 mall-type projects are scheduled for delivery outside Bucharest in 2008.

In comparison, only four shopping centres were delivered elsewhere in Romania last year: in Sibiu, Ramnicu-Valcea, Constanta and Brasov.

The impact of these malls, which put around 250,000 new retail spaces on the market, will affect both the consumption habits of Romanians and the labour market.

According to these figures, the number of mall visitors has increased by nearly 200,000 people a day. In addition, the malls opened this year total around 1,600 shops, which employ about 15,000 people, taking into account a 150 square metre surface area per store. With a significant number of retail spaces opening in malls, the business of the small street front shops could be affected.

The largest network of shopping centres completed so far on the market is held by Iasi-based businessman Iulian Dascalu, who finished the third Iulius-branded mall in Cluj-Napoca this year.

Completed projects - eight in total, became more concentrated towards the end of the year, after only one mall was delivered in the first half (Euromall Pitesti). “November and December are the best months for shopping, as retailers usually see their business double or even triple at this time of the year,” Moraru explains.

Some cities like Bacau and Pitesti witnessed the launch of their first ever malls (Arena Mall and Euromall), whilst in cities like Brasov and Iasi the latest projects delivered - Unirea Shopping Center and Felicia Shopping City, became the third players on their respective markets. On the other hand, while cities like Galati and Craiova still have no large shopping centres available, Cluj-Napoca and Targu Mures both saw two projects delivered this year - Iulius Mall and Polus Center and European Retail Park and Mures Mall respectively.

The end of the year has not seen any new shopping centres delivered onto the Bucharest market, although already established malls (Bucuresti Mall and Plaza Romania) conducted expansion projects. Developers have blueprints and shopping centre models on their desks that will help take this market to around 100 such centres over the next few years, and intend to cover all the big cities in Romania.

Nanette Real Estate Group NV has bought a 31,000-square meter lot in northern Bucharest. The company plans to build a 900-unit residential complex on the site for €78 million, and expects €123 million in total sales proceeds.This is Nanette’s third project in Bucharest and its fifth in Romania. The company expects that Lehman Brothers private equity fund Lehman Brothers Real Estate Partners II will acquire half of this project, as it has already done with other company projects. The two companies collaborate through a joint company, Robyg SA.

Ford is buying a majority share in a car plant at Craiova, Romania. The plant is expected to become one of its biggest plants in the European Union. The factory was previously operated by Daewoo of Korea.

John Fleming, president of Ford of Europe, said last week that its due diligence had been completed and a price agreed

The factory, which started life making versions of Citroën cars and was taken over by Daewoo in 1994, has a capacity of 300,000 cars a year and the attraction for Ford is that it can make engines and transmissions as well as cars and has a fully trained workforce.

The size of the bid has not been declared but Ford is expected to invest €675m (£457m) in the factory.

Fleming said it would take 12 to 15 months from completion of the sales agreement to adapt the plant to produce a series of Ford models.

Carmakers are flocking to Romania to take advantage of labour rates.

Lufthansa’s passengers in the UK will have a choice of three destinations in Romania from 1 September 2007, with the start of a new service to Sibiu. The German flag carrier will serve the Romanian city five times a week (increasing to a daily service from 28th October) with quick and easy connections through its Munich hub.

The addition of Sibiu, Lufthansa’s third Romanian destination after Bucharest and Timisoara, will increase the number of weekly flights to Romania from 66 to 71 (73 as of 28th October) and will further enhance the airline’s Central & Eastern Europe schedule, which will then comprise of 360 flights per week to 22 destinations.

“Sibiu is one of the fastest growing markets in Romania. For UK business travellers in particular, Lufthansa is thus offering yet another flight connection to an important growth region in Central & Eastern Europe,” commented Marianne Sammann, Lufthansa’s General Manager, UK & Ireland.

With its extended catchment area, the Transylvanian city of Sibiu has a population of more than five million. Since Romania joined the European Union in 2007, its economy has expanded significantly and the country conducts most of its foreign trade with the European Union.

Numerous firms in the engineering and plant manufacturing sector, the textile industry, the construction industry as well as the chemical and pharmaceutical sector are now established in the Transylvanian region.

Furthermore, Sibiu is also a major tourist attraction: the mediaeval city in the foothills of the Southern Carpathian Mountains is one of the two European Capitals of Culture in 2007.