Foreign Direct Investment in Romania, Hungary, Bulgaria & Czech Republic

Foreign Direct Investment Data 2000-2006 - EUR Millions

Country	2000	2001	2002	2003	2004	Total since 2000	2005	2006
Bulgaria	1,086	896	926	1,234	1,500	5,642	2,000	2,000
Hungary	1,785	810	891	2,320	2,500	8,306	2,800	2,500
Romania	1,812	1,312	1,194	1,590	3,500	9,408	3,000	3,000
Czech Republic	4,979	6,114	9,791	2,090	3,650	26,624	5,900	4,900

Source: Creditanstalt / Bank Austria - http://economicresearch-e.ba-ca.com

Romania FDI in 5 year period - 2000-2004 exceeds Hungary by €1.1 billion.

Romania economic engine accelerated hard in 2004 with a 120% jump in Foreign direct investment in 2004.

Major multinational companies that are establishing operations on the Romanian market are detailed in the margins of this page.

Country	Population Millions 2004	GDP Growth % 2004	Unemployment % 2004	FDI - 2004 EUR millions
Bulgaria	7.8	5.6	12.7	1,500
Croatia	4.4	3.7	18.9	850
Poland	38.6	5.5	19.6	3,300
Romania	21.7	8.3	6.8	3,500
Slovakia	5.4	5.2	14.4	540
Czech Republic	10.2	3.6	10.3	3,650
Slovenia	2.0	4.2	6.4	100
Hungary	10.1	3.9	6.0	2,500
Albania	3.2	6.0	14.8	200
Estonia	1.4	6.3	9.8	420
Latvia	2.3	8.7	10.0	445
Lithuania	3.5	6.5	11.5	620
Macedonia	2.0	1.5	35.0	120

The populations of Romania & Poland combine to account for 53.5% of the total population of Central Europe.

GDP Growth in 2004 @ 8.3%is only exceeded by Latvia 8.7%.

Unemployment @ 6.8% is only bettered by Hungary @ 6% & Slovenia @ 6.4%

The Romanian property market is providing opportunities for capital growth that are unmatched throughout Europe in the following market segments.

Residential & Industrial Land investments.
Tourism developments, particularly in the Ski resorts of Poiana Brasov, Predeal & Sinaia.
Industrial Property that has been recently developed for Transnational companies

The country has consistently enhanced its political stability since 2000, and strengthened its relationships with both European and US administrations.

In 2004, HVB Bank Austria reported that Romania recorded a GDP growth of 8.5% just behind Latvia (8.7%) at the top of the CEE league table.

Romania’s economy has recently been upgraded to investment grade by Fitch. The Romanian currency has been appreciating against US Dollar, Euro and Pound, providing additional growth potential for investors in Romanian property assets.

Strategic Geographic Location
As with Bulgaria, Romania has a strategic location between Europe, the Middle East & Asia. The Danube-Rhine corridor carrying increasing amounts of freight following closure of this route during the Balkans war. US Armed forces are relocating significant no. of military and naval bases to the Romania at Kogalniceanu & Constanta.

The explosive growth of the Economy
Romania’s economy is combining steadily increasing levels of GDP and significantly higher levels of Foreign Direct Investment (FDI) than its near neighbours in 2004 – Romania €3.5bn. – Hungary €2.5bn. – Bulgaria €1.5bn. – Slovakia € 0.5bn. Inflation at 9.9% in 2004 has been steadily reduced since 2000. CEE economies compared by Creditanstalt – Bank Austria @ www.factbook.net/ar/cee_report_ca_ba_2005

Real Estate Market
“The real estate market continued its development with an increasing interest from local and international investors and growing prices on all properties. All its segments have seen an energetic development, with the retail and industrial markets being the most dynamic.

The residential market has seen the first signs of interest from professional developers looking for large scale developments that will have an impact on the medium and high end markets.

As residential prices are still low compared to the region, this sector has probably the biggest opportunity in terms of future growth and development. “
Colliers 2005 Property report – www.factbook.net/ar/Romania_Report_2005.pdf

Residential property
Prime residential property in Bucharest is very much dependent upon location.

In March 2005, quality refurbished apartments in the city centre are being retailed for €1,100 - €1,750 per square metre. 1 & 2 bedroom apartments in the central Unirii district fetching €100,000 – €170,000 respectively

House prices for new build range from €65,000 to > €250,000.

Office property
Land for Office Developments - Demand is still focused on the central-northern area, but due to the scarce supply, most developers have also considered the nearby areas such as Pipera and Baneasa.

Demand came from international office developers and even investment funds unable to find finished product and looking to create opportunities in Bucharest.

Prices are 50% higher than 2003 and have reached €1,200 – 1,500 sqm in good locations (Aviatorilor,Victoriei, Dorobanti). Prices for sites in Pipera reached €150–€170/sqm, registering approximately 300% growth compared with 2002’s level. Higher values are achieved if the site has already permits, other building endorsements or a triple A location.