The laws regulating real estate and construction have been amended no less than 320 times, not to mention the structural changes introduced to the Civil Code a decade ago, which also had a material impact on the sector.

In this context, staying flexible has always been vital for all market players. The economic crisis of 2008 further strengthened the need for adaptability, while also introducing a more cautious approach from investors. And then 2020 came, bringing new challenges which have put the market resilience to a test.

At a first glance, as the economic effects of the COVID-19 pandemic were beginning to unfold, a demarcation seemed to take shape between the "winners" (logistics) and "losers" (office) created by the healthcare crisis in the real estate market, while in retail the faith of stand-alone stores seemed incomparably better than that of the spaces located in shopping centres.

And indeed, logistics appears to have been the less affected sector in the real estate market, also given the shortening of supply chains across the globe, generated by the pandemic. With one of the most dynamic developments in the European market, Romania’s stock of modern industrial and logistics space grew threefold between 2015 and 2020 and amid last year's challenges, the vacancy rates have continued to be low and rents for prime spaces remained unaltered.

At the opposite pole, the hit to the office sector was clear and continued to be felt even after the lifting of the lockdown, as working from home became a widely-used solution. Lawyers faced waves of questions regarding the immediate and long-term impact on lease agreements from landlords and tenants, and force majeure or hardship were the words of the day.

It remains to be seen if and how the new realities will impact investments and leases in the medium and long run. This is also true of the legal concepts that we will have to creatively employ in the future to protect clients involved in real estate transactions from the unpredictable.

What is clear is that the Romanian real estate market is sending positive signals that it is mature enough and has been tested enough times to deserve the title of "adaptable in the face of change".

Note: The regional law firm Schoenherr recently launched the 15th edition of roadmap, a yearly publication that includes articles on legal and tax matters from all the firm's jurisdictions, as well as opinions from clients or experts. This material is an excerpt from a dialogue between Sebastian Guțiu (managing partner Schoenherr și Asociații SCA, head of Schoenherr's real estate practice in the Central and Eastern Europe/ South-Eastern Europe ) and Horațiu Florescu (Chairman & CEO of Knight Frank Hungary & Romania), published in the 2021 edition of roadmap. The publication is available online on the Schoenherr website (www.schoenherr.eu).