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Real Estate: Romanian industrial and logistics take-up increased by 15 pct to new record level in 2017
Romanian industrial and logistics gross take-up increased in 2017 by almost 15 percent to over 525,000 square meters, registering a new record level, business-review.eu reports.
Most of the demand came from logistics, transport and distribution companies, which leased a total of 290,000 sqm, or more than 55 percent of the total. The retailers were also among the most active companies last year, with area contracted of over 110,000 sqm, 22 percent of the total volume rented in 2017.
Approximately 100,000 sqm have been leased for production activities, but it is worth to mention that these companies usually own the production facilities. For this reason, the share of rentals of such spaces does not reflect the dynamics of this sector.
Another positive element of the market is the fact that 430,000 sqm, almost 80 percent of the total surface rented in 2017, represents net demand – new lease agreements, extensions and pre-lettings, the rest being contract renewals and relocations.
“2017 showed very well at the level of macroeconomic indicators: foreign direct investment has increased to a record level, GDP has had an unexpected upward trend, driven by consumption (2017 is the second year with an increase of over 10 percent in consumption). This picture has encouraged market development even more than we anticipated earlier last year,” said Costin Banica, associate director, head of Industrial Agency JLL Romania.
The regional structure of demand shows that Bucharest is in the top of the preferences, with 275,000 sqm (53 percent of the total). On the second position is placed Timisoara – 76,200 sqm, followed by Pitesti – 50,000 sqm. In Roman, the traded area has accumulated 32,000 sqm, in Cluj 25,250 sqm, and in Ploiesti 24,700 sqm.
“The market is still captive in several areas of the country – Bucharest, West and Center. With a few exceptions, the demand and the new offer have focused last year on the locations that are already development poles. From this point of view, there is an imbalance in the market, which will be maintained as long as the problems related to the availability of labor and infrastructure”, added Banica.
In 2017, the developers delivered projects amounted almost 360,000 sqm, out of which 242,000 sqm (67 percent of the total) were built in Bucharest and Ilfov. About 40,000 sqm were delivered in Cluj, and 34,000 sqm in Timisoara. Roman recorded the first development of modern space after WdP completed Profi warehouse, with an area of 33,500 sqm..
“The Romanian market will maintain this year in the attention of the tenants. The sentiment of the investors remain positive, which makes us believe that in 2018, the industrial and logistics market will have an another remarkable performance,” concluded Banica.