Bucharest industrial property deliveries to reach seven years high in 2016

Most of it (about 190,000 sqm, 63 percent) will be delivered in Bucharest, followed by Cluj, with 8 percent (25,000 sqm), Brasov, Ploiesti and Sibiu, with 5 percent each (15,000 sqm).

“In 2016 in Bucharest – the largest logistics and industrial market in Romania, new deliveries are expected to reach about 190,000 sqm. It will be the highest level for seven years. At the end of Q4 2016, the stock of industrial and logistics in Bucharest will be 20 percent higher,” stated Mihaela Galatanu, head of DTZ Research.

In 2015 the total trading activity for industrial and logistics spaces stood at 300,000 sqm, which is higher by 44 percent y-o-y, Bucharest accounted for almost half of it, with 137,000 sqm.

The pre-lease activity totaled 188,000 sqm, being 75 percent higher compared to 2014. Bucharest once more took the lead with 73,000 sqm, followed by Sibiu (24,500 sqm) and Cluj (23,000 sqm).

Throughout 2015 rental levels remained relatively stable. Prime rents for Class A units of at least 5,000 sq m was between EUR 3.6 and 3.9 per sqm per month. For units below 5,000 sqm rent were slightly higher. Class B units had rents between EUR 2.5 and 3 per sqm per month.

At the end of 2015, the stock of modern industrial and logistics in Romania surpassed 2 million sqm. Bucharest held 47 percent of these spaces, with a stock of 960,000 sqm. Outside the capital, the largest markets in terms of stock of industrial and logistics are Timisoara – 13 percent, followed by Ploiesti – 11 percent, Cluj – 7 percent and Brasov – 7 percent.

Industrial and logistic deliveries in November totaled 164,000 sqm. About 90 percent of the delivered spaces were built to suit, with most of them concentrating in Timisoara (78,000 sqm), followed by Ploiesti (33,000 sqm) and Braila (16,000 sqm).

When it comes to development outside Bucharest, the high level of demand registered during 2015 led to a series of new projects, not only in Timisoara and Ploiesti, regions that were among the preferences of tenants in recent years. In 2016, industrial and logistics new developments are expected in Cluj, Sibiu, Brasov, Pitesti and Ramnicu Valcea.

Last year Romania posted the largest increase in retail sales across the EU, at 8.9 percent. As a consequence, demand from companies operating in retail and distribution/logistics made a major contribution to the positive results in the leasing market, according to DTZ representatives. Demand for industrial development will follow an upward trend being supported by our country’s consumption growth, and the need for companies in retail, logistics and distribution to expand their operations. (source: business-review.eu)