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Real Estate: JLL: Vacancy rate of industrial and logistic areas in Bucharest close to zero
The vacancy rate of industrial and logistic areas in Bucharest are close to zero, when demand has exceeded offer of new areas seven times in the first quarter of the year and banks have become interested even in speculative projects, the real estate consulting company JLL Romania announced on Tuesday.
27,000 square meters of industrial areas were delivered in the first quarter, while the net demand was seven times higher, reaching about 180,000 sq.m, according to data centralized by JLL Romania.
“In this context, the stock of modern logistic an industrial areas maintained at 2.5 million sq.m, with a density of 128 sq.m per 1,000 inhabitants, below levels in other Central and East European countries. Over 12 million sq.m are built around Bucharest, and of them 75% along highway A1”, the press release shows.
The vacancy rate at the end of 2016 was estimated to be less than 5% in Bucharest and more than 10% in the rest of the country. Now it is very difficult to find space for new demands in existing projects, according to the director of the industrial department of JLL Romania, Costin Banica.
“That is why we see an increase of the volume of areas in which developers start building speculatively, without a secure renting contract. These areas are contracted by tenants as soon as they come into the market,” Costin Banica declared.
Banks become interested even in projects started speculatively, after attracting the first tenants, Banica considers.
“The sustainable evolution of the industrial and logistic market in the last years led to the return of the appetite banks to finance such projects. Since 2008 banks have not financed any logistic or industrial project. Banks do not finance speculative projects yet, but once construction starts and tenants are attracted, financiers become interested in such projects,” Costin Banica declared.
In point of demand, there is an advance of 40% compared to the same period of 2016, the whole area being net demand, new and built to suit contracts.The structure of demand shows that 70,000 sq.m, that is 40% of total, represent areas rented by logistic companies, while retailers have signed transactions for 53,000 sq.m, that is 30% of total.
“More than two thirds of demand in the first quarter had in view Bucharest - over 97,000 sq.m. Timisoara, Ploiesti, Cluj and Roman are towns which attracted companies for industrial and logistic areas,” the press release shows.
Until the end of the year, developers announced a record level of 400,000 sq.m of the new projects, in the context in which the low vacancy degree and record demand encourages them to expand existing parks or start building new ones. If all announced projects are announced, the new offer will exceed the one in 2016, when projects of 330,000 sq.m were delivered, according to JLL Romania.
Rents requested by owners for distribution facilities, especially those in Bucharest are estimated at 3.5-4.1 euros/sq.m/month, while industrial areas have rents up to 3.3-4.25 euros/sq.m/month.