The COVID-19 pandemic boosts the development of e-commerce: Electro-IT and Home & Deco retailers could expand their logistics spaces by over 50%

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Electro-IT and Home & Deco online retailers take up approximately 370,000 sq m of storage space and this volume could increase by at least 50% in the next two years, due to the development of online commerce, reveals the Romania E-Commerce research report launched by CBRE commercial real estate consultant.

Online retail has grown significantly in the last six years, reaching 4.3 billion euros at the end of last year, four times higher than in 2014, rising by almost 20% compared to 2018. The situation imposed by the COVID-19 pandemic contributed to the development of online commerce after the closing of non-essential stores, while employees had to work from home with children trying to adapt to distance-learning. Electro-IT stores remained open throughout the state of emergency and recorded increased sales both in physical stores and especially in the online sector.

“The online sales of home appliance retailers are growing and therefore we expect a high need for storage space. Currently, these retailers take up an area of 330,000 sq m of logistics space, most of the warehouses being located near Bucharest, in industrial premises owned by international developers such as P3 and CTP. In the next 18-24 months, the logistics area leased by Electro-IT retailers could increase by at least 50%”, explained Andrei Jerca, Head of Industrial Services, CBRE Romania.

Another category of tenants that continues to expand on the industrial space market is that of retailers in the Home & Deco sector, according to the Romania E-commerce report, launched by CBRE.

„With up to 40,000 sq m leased in Bucharest by the end of 2019, Home & Deco retailers are at the beginning of their expansion and investment in logistic spaces Some of them chose Bucharest as their main location for the physical stores, which is why the logistics spaces are also located in this area”, added Andrei Jerca.

Regarding the evolution of e-commerce, CBRE expects new increases, on the one hand as the internet penetration rate continues to rise, this year the threshold of 70% being expected to exceed, and on the other hand as almost 25% of Romania’s population is represented by inhabitants of 15 and 34 years old, respectively generations Y (millennials) and Z (post millennials) known to be tech-savvy, service oriented and speed driven.

“An interesting phenomenon to note during the lockdown period was the fact that retailers with a strong online presence and a clearly defined online strategy performed much better than retailers for whom online presence was secondary to brick & mortar stores. We expect retailers in the Electro-IT and Home & Deco sectors to assign new resources for the development of online sales platforms, while reinventing the shopping experience and consulting services offered in physical stores”, informed Carmen Ravon, Head of Advisory & Transaction, Retail, CBRE Romania.

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