Money Buzz! Europa

Tag: industry romania

  • Developers delivered about 600,000 sq m of industrial space in Romania last year

    Developers delivered about 600,000 sq m of industrial space in Romania last year

    The developers of industrial and logistics spaces completed last year new projects with an area of about 600,000 square meters, thus maintaining the investment plan announced at the beginning of the year, despite the COVID-19 crisis.

    In 2020, most of the projects were developed in Bucharest and the surrounding area, which accumulated almost 80% of the built area, respectively 465,000 square meters.

    New project delivered by areas (2020)  
    AreaNew projects sqm% in total deliveries
    Bucharest (extended area)465,10079.3
    Center67,80011.6
    West – Northe-West25,0004.3
    South-East20,3003.5
    South-West8,4001.4
    South00.0
    East00.0
    Total586,600100

    Thus, the stock of industrial and logistics spaces in Romania exceeded the threshold of 5 million square meters, reaching 5.05 million square meters, from 4.46 million square meters at the end of 2019.

    In regional profile, by far most areas are found in the extended area of ​​Bucharest (over 54% of the national stock), followed by West – North-West (17%), Center (15%), and South (almost 11%).

    The rest of the areas account for only 3% of the total stock but offer opportunities for future growth.

    New investments in 2021

    Despite the pandemic, 2020 was a record year for industrial space transactions. At the national level, over 670,000 square meters of industrial space were leased, increasing by approximately 15% compared to the volume recorded in 2019, in turn, a record year.

    Out of the total demand of 670,000 square meters, the net demand represented over 70%, respectively 478,000 square meters.

  • Logistics and industrial market in Romania is set to exceed 5 million square

    Logistics and industrial market in Romania is set to exceed 5 million square

    Romania’s modern industrial and logistic facilities reached 4.72 million square meters at the end of the first half of the year, up by 5% compared to the corresponding period of 2019.

    This represents over 9% of the stock figure for the biggest 17 CEE economies, and though it could exceed 5 million sqm by the end of 2020, there is still signficant room to grow, according to Colliers International’s exCEEding Borders report.

    Romania’s stock of modern industrial and logistic spaces has grown threefold since 2015, but there is still a significant gap between Romania and other CEE markets.

    In the Czech Republic, modern industrial and logistic spaces are at roughly 9 million square meters, while in Poland are around 19,6 million square meters. This means that on a per capita basis, Romania’s stock of modern storages is 4x below Czechia’s and 2x below Poland’s.

    Around 120.000 square meters in new modern industrial and logistics spaces are estimated to have come online in the first semester of 2020 throughout Romania, which was a decrease compared to the same period of 2019, when developers delivered 300.000 square meters.

    But the second half of the year is seen to be much more active, with nearly 300.000 square meters in new deliveries expected, with more than 60% located in the outskirts of Bucharest.

    The total leasing transaction volume in Romania at the end of June reached 250.000 square meters, new agreements dominated the leasing structure and constituted 81%. Bucharest accounted for 35% or a total of 87,500 square meters of the leased industrial and logistic space, and the most significant share of deals were new agreements and renegotiations, which constituted 55% and 37% respectively.

    Tenant structure in terms of sectors in the Romanian market was dominated by retail/FMCG sector, which generated 50% of all deals, while in Bucharest it was led by 3PL/logistics (35%) and light production/manufacturing (33%).

    Profi’s new logistic facilities in Timișoara and Craiova were the most important developments, covering 115,500 square meters.

    Rents for prime warehouse spaces remained broadly stable this year, between 3,8-3,9 euro per square meter for prime industrial & logistic spaces around Bucharest and around 3,7-3,9 in other hubs around the country.

    For comparison, in the area of ​​Warsaw, Sofia or Budapest the rents amount to 5 euro per square meter. The average lease lengths in Romania are 3-5 years in case of logistics / warehouse premises and 5-7 years in case of production/manufacturing.

  • The demand for industrial spaces maintains its dynamics in 2019

    The demand for industrial spaces maintains its dynamics in 2019

    The demand of industrial and logistics spaces in Romania in 2019 reached a total of about 476.000 square meters, a value comparable to that of 2018, when the transactions amounted a total of 514.000 square meters. 

    Bucharest attracted the largest demand of industrial and logistics spaces in the country, namely nearly 76% (approximately 360.000 square meters), followed by Slatina, with 13% of the demand (62.000 transacted square meters).

    JLL recorded a market share of nearly 42% of the volume of lease transactions for industrial and logistics spaces leased by real estate consultants. The company achieved the largest transaction recorded in 2019, namely the lease of almost 72.000 square meters by the retailer Profi in CTP Bucharest West.

    Other notable transactions in which JLL was involved in 2019 are the lease of 16.000 square meters by Urgent Cargus in the P3 Bucharest A1 Park and the lease of 8.400 square meters by Marelvi Impex in the MLP Bucharest West Park.

    To be noted that of the total number of nation-wide leased spaces over the last year, more than 150.000 square meters (approximately 32%) represented transactions concluded directly between owner and tenants.

    The evolution in 2019 rose to the level of the previous years, when a record number of demands was recorded on the market for industrial spaces.

    “The demand for industrial spaces maintained its positive evolution over the past years. The appearance of new investors and the diversity of the locations in which they develop new projects has brought extra competition on the market, maintaining its dynamics. We follow the evolution of the demand with great interest, bearing in mind the fact that the industrial market reported a record in the demand over the past four years, especially given the expansion of retail and logistics companies”, stated Costin Bănică, Head of Industrial Department JLL.

    JLL noticed an increase in the interest for production and industrial spaces, coming especially from companies operating in the automotive sector. However, these types of projects have longer implementation periods, extending to up to 18-24 months from the date when discussions are initiated. In case of logistics projects, the implementation period is usually of up to one year. 

    In 2019, the stock of modern industrial spaces exceeded 4.3 million square meters, which is double the volume recorded in 2015.

    Another trend for 2019 was the high interest of developers in attracting clients with spaces that are small, but that show great growth potential. Such clients, most of whom are located today in the spaces of former industrial platforms in large cities, will have to migrate to modern industrial spaces in order to provide better work conditions for their employees, but also to comply with the stricter regulations regarding fire safety permits. 

    “We can see an increased interest of new investors in developing modern industrial projects within the city of Bucharest. Here we refer both to projects providing the possibility to lease smaller units of 800-1500 sqm, as well as large units in industrial buildings on several floors. These types of buildings are taken into account in areas in which the price of the land is high and an industrial development would not provide the performance expected by investors. We believe that 2020 will bring in Romania the first industrial projects developed on multiple floors”, Costin Bănică, Head of Industrial Department JLL România, also stated.