Digitalization and the green transition are reshaping the real estate sector

In another exclusive interview, part of Business Review’s Top Industries to Watch in 2025 series, we explore the main opportunities and challenges in the office market but also the sustained demand for housing in urban and suburban areas with Didier Balcaen – CEO and Jan Demeyere – Architect, Co-Founders of SPEEDWELL. Taking into consideration the transition to hybrid work models, but also the lack of a long-term urban development plan for Bucharest, the two have shared insights on how the industry can stay competitive, adapt to economic uncertainties, and position itself for long-term growth.

What are the main opportunities and challenges in the office market in 2025 in Bucharest, Romania? 

Didier Balcaen: The office market in Bucharest is at a critical juncture in 2025, balancing significant opportunities with equally substantial challenges. On the opportunity side, there is increasing demand for high-quality, sustainable, and tech-enabled office spaces. Companies are more focused than ever on creating work environments that foster employee well-being and productivity. At SPEEDWELL, we’ve embraced this with projects like QUEENS District, which offers state-of-the-art office spaces with absolutely no carbon emissions integrated into a vibrant mixed-use community in Aviatiei District Bucharest, an area that has great growth potential and a lack of new office spaces deliveries. These offices prioritize energy efficiency, employee-friendly designs, and smart technologies that cater to modern tenants.

That said, there are persistent challenges. A key issue is the lack of a long-term urban development plan for Bucharest. As I’ve highlighted before, a city cannot thrive without cohesive urban planning. Developers like us are often left to bridge the gaps caused by inconsistent policies and inadequate infrastructure. For example, approvals and permits for new projects are not only delayed but have not even been considered by the authorities in the last five years, which increases costs and creates uncertainty for investors and tenants.

nother pressing issue is the transition to hybrid work models, which has reduced the demand for traditional large-scale office spaces. Tenants are seeking flexibility in their leases and design, meaning office developers must rethink layouts and prioritize shared and modular spaces. The consequences of failing to address these challenges are clear: older office stock that doesn’t meet modern expectations risks high vacancy rates.

What are the main opportunities and challenges in the residential market in 2025 in Romania? 

Jan Demeyere: Romania’s residential market remains one of the most dynamic sectors in 2025. Urbanization, growing disposable incomes, and changing buyer preferences are driving demand for modern, energy-efficient homes. In this context, our projects like Glenwood Estate in Corbeanca and The Meadows near Grivița Lake exemplify how we’re addressing these needs. Glenwood Estate focuses on spacious, high-quality villas with ample green spaces, while The Meadows is designed for families looking for a modern lifestyle close to nature, both gated future to be communities for safety and intimacy.

That said, the road isn’t without its bumps – challenges in the residential sector are equally pronounced. One of the biggest issues is the bureaucratic process surrounding building permits. In 2024, over 33,000 residential building permits were issued nationwide, representing a slight increase, but Bucharest has lagged due to regulatory bottlenecks. These delays not only slow down development but also create uncertainty for buyers eager to move into new homes.

Furthermore, rising construction costs, driven by inflation, global supply chain disruptions and now the government measures, are putting pressure on both developers and buyers. Maintaining affordability without compromising on quality is a delicate balancing act. To address these challenges, SPEEDWELL is focusing on sustainable construction methods and leveraging economies of scale to keep costs under control.

Another trend worth noting is the increasing preference for suburban and satellite areas, as buyers prioritize larger homes and greener environments post-pandemic. Suburbs like Pipera and Băneasa in Bucharest, or Florești in Cluj, are becoming hotspots for development. However, this trend underscores the need for infrastructure upgrades to support these growing communities.

From which sector (office, residential, logistics) will most projects come from in 2025? 

DB: In 2025, the residential sector will likely dominate in terms of the number of projects, driven by sustained demand for housing in urban and suburban areas. However, the logistics sector is rapidly emerging as a key growth area, thanks to the rise of e-commerce and Romania’s strategic position in Eastern Europe.

At SPEEDWELL, we’ve entered this sector with SpacePlus, a logistics solution designed for SMEs. SpacePlus provides modular, flexible spaces that cater to smaller enterprises needing units between 500 and 5,000 square meters. Our first SpacePlus project is fully leased, demonstrating strong demand for this type of product, and the second project will be completed by the end of 2025.

SMEs are the backbone of Romania’s economy, and many are seeking high-quality logistics solutions as they grow. By offering modern infrastructure and flexible leases, SpacePlus supports these businesses while addressing a significant gap in the market. While residential will see the most activity in 2025, logistics, has remarkable growth potential.

How does 2025 look from the perspective of the challenges the real estate sector will face this year? 

DB: The real estate sector in 2025 faces several significant challenges. First and foremost is economic uncertainty. Rising inflation, fluctuating interest rates, and global economic instability are affecting both developers and buyers. These factors make it harder to secure financing and could dampen demand in some market segments.

Another major challenge is the fragmented approach to urban planning, particularly in Bucharest. As I’ve mentioned in previous interviews, Bucharest lacks a clear long-term development plan. This has led to uncoordinated growth, traffic congestion, and inadequate infrastructure. Without a cohesive strategy, the city risks missing out on its full potential.

Environmental sustainability is another critical issue. Developers are under increasing pressure to meet green building standards, but this often comes with higher upfront costs. At SPEEDWELL, we’ve embraced this challenge by integrating sustainability into every project, from energy-efficient designs to green certifications. Projects like PALTIM, our residential development in Timișoara, or Record Park in Cluj-Napoca are great examples of how we’re blending sustainability with high-quality urban living.

Lastly, the regulatory environment continues to be a stumbling block. Lengthy and complex approval processes for new developments delay projects and discourage foreign investment. As an industry, we need to work more closely with authorities to streamline these processes. We’re actively engaging with policymakers and stakeholders to advocate for more developer-friendly regulations.

Despite these challenges, I remain optimistic about the future. The real estate market in Romania has proven resilient, and there are abundant opportunities for those willing to innovate and adapt.Interviewer:How much do digitalization and the transition to a green economy influence the real estate sector?

JD: Digitalization and the green transition aren’t just influencing real estate—they’re reshaping it entirely. At SPEEDWELL, we see these trends as opportunities to create projects that truly align with modern lifestyles. Our residential developments, like Glenwood Estate and The Meadows, incorporate smart home technologies that let residents control energy usage, heating, and lighting with ease. It’s about blending convenience with sustainability.

Our work on the QUEENS District takes this commitment even further. This will be our first zero-carbon-emissions project, integrating renewable energy, high-performance insulation, and smart waste management systems. These are meaningful steps toward reducing environmental impact, and we’re proud to lead by example.

Of course, implementing these innovations requires upfront investment. However, the long-term benefits, from lower operational costs to increased property value, make it worth every effort. More importantly, combining digitalization and sustainability helps us meet the expectations of today’s consumers, who value both functionality and environmental responsibility.

The same principles apply to SpacePlus, where we provide energy-efficient logistics spaces designed with SMEs necessities in mind. It’s exciting to see how technology and sustainability can drive innovation, and I believe this dual focus will define the future of real estate.

How does 2025 look from the perspective of the challenges the real estate sector will face this year? 

DB: 2025 is shaping up to be a pivotal year for the real estate sector in Romania, with both exciting opportunities and complex challenges. The challenges are multifaceted, spanning economic pressures, regulatory bottlenecks, and the evolving demands of tenants and buyers.

Economic uncertainties remain a top concern. Inflation, fluctuating interest rates, and global market instability are making it more difficult for developers to manage costs and for buyers to secure financing. For many, this creates a cautious market environment. However, it also pushes the industry to innovate and adapt.

Regulatory issues are another major hurdle, particularly in Bucharest. As I’ve said before, the city’s lack of a cohesive, long-term urban development plan is holding it back. The permitting process remains cumbersome and unpredictable, delaying projects and increasing costs. This impacts not just developers but the entire ecosystem—investors, tenants, owners, and communities alike. As developers, we need to work more closely with authorities to streamline these processes and advocate for clear, consistent policies that support sustainable growth.

The transition to sustainability is both a challenge and an opportunity. Meeting green building standards and reducing carbon footprints require significant upfront investments. Yet, the long-term benefits—operational savings, higher property values, and environmental impact—make it a necessary shift. Projects like QUEENS District, which will be a zero-carbon-emissions development, demonstrate that these goals are achievable with the right planning and commitment.

Shifting consumer expectations also demands adaptability. Buyers now prioritize energy-efficient homes, smart technologies, and community-oriented spaces. Similarly, office tenants are seeking flexible, health-focused environments. These preferences require a new approach to design and functionality, as we’re doing with mixed-use projects like QUEENS District and Record Park, or residential ensembles like The Meadows or Glenwood Estate, which integrate sustainability, technology, and livability into every aspect.

Despite these challenges, I’m optimistic about 2025. Romania’s real estate market has proven its resilience time and time again. By embracing digitalization, sustainability, and innovation, we can address these hurdles head-on and continue to deliver projects that add value to our cities and communities. At SPEEDWELL, we remain committed to setting the standard for quality and sustainability, navigating the complexities of today’s market while shaping the future of real estate.