73,000 sqm industrial and modern logistics areas have been rented in the first quarter of 2018, with two thirds in Bucharest and one third in western country.
According to a study conducted by Colliers International Romania, the most attractive area for storage space market, apart from the Capital city, is the western region of the country, in terms of demand, distance from the customs offices and the existing industrial parks.
The survey pointed out that although the leasing activity for modern storage spaces nearly halved in 1Q18 relative to 1Q17, 73,000 sqm, it is still considered a strong market.
30 cities have been surveyed in the study, both on their attractiveness for storage and production activities. „Bucharest as a criterion in itself was not considered – since the capital generates about a quarter of total consumption in the whole country, it is the single biggest magnet for warehouse spaces in Romania and would be the number one pick by far in our ranking if we had considered this element. The same could be said for Cluj-Napoca, which is the economic heart of Transylvania, thereby gaining special bonus points as the largest regional hub,” say the study’s authors.
The ranking for warehouse attractiveness takes into account the distance to major customs (55% weight in overall index), various labour market indicators (25% weight in total), local infrastructure quality (20% weight in total).
So, the top five best performing cities/regions based on these factors were:
Arad, Timisoara, Alba Iulia, Oradea, Sibiu ( in terms of distance to the customs), Iasi, Suceava, Craiova, Bacau, Galati (according to the labour market index), Bucharest – Ilfov, Timisoara, Arad, Pitesti, Suceava ( on local transport quality) and Ploiesti, Cluj-Napoca, Brasov, Oradea, Sibiu, in terms of industrial parks.
Out of the total rented area in the Q1, the largest demand has been reported in Bucharest (66%), 34% in Cluj-Napoca (22%), and Timișoara (12%).
So, despite a decline of the modern storage spaces as against the last year, the Colliers transactions’ pipeline suggests a material acceleration can be expected by the end of the year due to some factors:
„Persistently low vacancy rates, good tenant demand, rising materials/workforce costs by over 10% are placing upside pressures on rents (currently starting from c.4 EUR/sqm in Bucharest area). Growing appetence for developments in central and western parts of the country. Ongoing trend from classic tenants (mostly retailers, including e-commerce) to self-develop own storage spaces, with some surfaces subleased thereafter.”