The modern industrial stock exceeded the 4 mln. sq m during the first semester of 2019, since a new supply of 240,000 sq m was brought on the market and by the end of 2020 approx. 1 mln. sq m are expected to be delivered, according to the latest research report “Romania MarketView H1” of CBRE Romania.
From the total modern stock of 4 mln. sq m industrial spaces, regional cities accommodate 55%, while the capital city alone is responsible for the remaining 45%, almost half of the total analysed schemes being concentrated in the most wanted place to be in Romania by industrial developers.
Industrial developments are scattered in the capital city proximities especially close to the highways, but the Western part concentrates the largest part, respectively 73% from Bucharest’ total modern industrial stock. The Northern part is slowly developing accounting 15% from the total and is contouring as the next industrial hub of the capital.
“By the end of the year another approx. 380,000 sq m are expected to be delivered, most of them located in Bucharest’s outskirts. The under-construction industrial schemes have a very small vacancy, showing once again the developer’s inclination towards built–to–suit projects with a drop of the speculative building in an expansive market”, said Andrei Jerca, Account Director Industrial Advisory & Transaction Services, CBRE Romania.
From the total area to be delivered in regional cities, the Central part of Romania with 55% from the future new supply and the West and North-West part of the country with 25% from the total, obtained the developer’s vote of confidence to invest in nationwide industrial facilities.
A total area of approx. 580,000 sq m is expected to be added by the end of 2020 at the Romanian modern industrial stock considering both under construction and planned industrial projects.
The total leasing activity (TLA) in H1 2019 accounted for 113,000 sq m nationwide, with 33% higher than the leasing activity registered in the first half of the previous year. The share of pre–leases represented 18% of the total leased area. Bucharest attracted 75% of the total leased sq m, while regional cities managed to obtain a quarter from the total.
“The part of Bucharest where most tenants want to locate is the North-Western side as 40% from the TLA is directed in this part, closely followed by the West part of the city with 37%”, added Andrei Jerca.
At the end of H1 2019, the vacancy rate in Romania reached 5.9% indicating a slight upward trend as industry players shifted their focus towards new developments as well as the recent investors’ appetite to develop small-sized semi – speculative projects. The asking headline rent remains constant at a level of EUR 4 sq m/month.
„We estimate prime rent to follow a stable pace by year’s end and built-to-suit projects to remain the main approached strategy by the investors when drawing the expansion plans as they already secured land plots suitable for large – scale developments and are waiting for the first pre-lease in order to start construction works”, concluded Andrei Jerca.