Romania is set to unveil new real estate investment opportunities with the implementation of legislation for Real Estate Investment Trusts (REITs). The project is currently in the parliamentary debate phase and has the backing of the government and other decision-makers.
What are REITs?
REITs are a traditional form of real estate investment that allows investors to participate in the real estate market without physically owning properties. These companies use a pooled fund of capital to acquire, develop, and manage a portfolio of income-generating properties, such as apartment buildings, office spaces, retail outlets, and warehouses.
Through REITs, small investors can access the real estate market without having to bear the costs and complexities associated with direct property ownership and management. In this context, the Romanian Real Estate Investors Association (AREI) organized a debate to highlight the importance of regulating REITs within Romanian legislation. The event featured representatives from the government, the Financial Supervisory Authority (ASF), and companies in the real estate sector, underscoring the interest and support for this reform.
“We aim to have an important dialogue with the most relevant public and private sector actors regarding the new legislative framework proposed for certain real estate companies, which is currently under parliamentary debate,” stated Geo Margescu, a board member of AREI and CEO & Co-founder of Forte Partners.
By regulating the REIT mechanism, Romania has significant potential to enhance its attractiveness to international investors and align with best practices from other EU member states, emphasized Tobias Steinmann, Director of Public Affairs at the European Public Real Estate Association (EPRA).
“These years are crucial for the development of the construction and real estate sectors in Romania… We rely on market players to advance the economy through a correct legislative framework. You will have the executive’s support for the rapid implementation of this legislative package,” said Florin Spătaru, State Counselor in the Prime Minister’s Office.
Daniel Fenechiu, PNL Senator and one of the initiators of the legislative proposal for regulating REITs in Romania, highlighted the need for a clear political decision: “We must decide if we want to stimulate real estate investment companies by eliminating double taxation, thus providing the necessary boost for economic development. Our proposal is supported by the relevant economic committees, and we are committed to translating this proposal into a concrete legislative framework.”