“2021 is off to a promising start for the industrial property market in Romania, as 2020 proved to be a record year with over 930,000 sqm traded. Developers are investing in different areas of the country: from the well-known area of Timis to Brașov and Bacau, which are beginning to attract growing interest, benefiting from land with potential for development and available labour”, stated Razvan Iorgu, Managing Director, CBRE Romania.
CBRE has recently brokered the extension of the lease contract for a space of approximately 85,000 square meters occupied by Carrefour Group within the P3 Bucharest A1 industrial park located in western Bucharest. The extension of the lease contract for Carrefour’s 85,000 sqm warehouse is one of the largest transactions ever concluded on the Romanian logistics market. Some of the largest transactions concluded in 2020 include: Ikea (70,000 sqm within CTPark Bucharest West) and Profi (58,500 sqm and 57,000 sqm, respectively, within WDP Timisoara and WDP Craiova).
Across Romania, some 400,000 sqm of industrial spaces are currently under construction, with an area of over 60% being pre-leased already, per CBRE data. In 2020, the industrial space stock in Romania increased by over 570,000 sqm. Therefore, after the industrial space stock in Romania increased by over 570,000 sqm in 2020, the development activity continues to be intense this year as well, driven by the degree of vacancy of only 8% countrywide.
With an existing stock of 2.3 million sqm, Bucharest and its surroundings, respectively Ilfov County, continues to attract the largest volume of new developments, with over 140,000 sqm under construction. Romania’s northern and north-western region, which includes Timisoara, Arad and Cluj-Napoca, comes next with a stock of 1.2 million sqm. In this area, real estate developers have approximately 130,000 sqm under construction, of which over 100,000 sqm are in Timis County, according to the Romania Industrial Destinations report.
“Timisoara and Arad continue to attract companies in need of logistics space, enjoying developed infrastructure and easy access to Bucharest and to the northern and north-western borders of the country. We are discussing with many companies, including in the retail industry and related fields, which are interested in expanding or moving their storage facilities in this area”, said Daniela Gavril, Head of Research, CBRE Romania.
Central Romania, which includes the towns and cities of Deva, Sibiu, Targu-Mures and Brasov, is another dynamic region in terms of new projects, boasting a stock of approximately 670,000 sqm that is expected to grow 10% in 2021 alone, of which approximately 15,000 sqm are under construction in Brasov.
The eastern and north-eastern regions of Romania, with destinations such as Bacau and Iasi, have recently appeared on the radar of investors in the industrial sector, with benefits such as low labour costs, limited competition and a steady supply of land available for developments, as specified by the report.
Romania has seen a fast-paced development of the industrial market in the last five years, with the stock doubling its volume during this period. Nevertheless, with only 260 sqm of industrial space per one thousand inhabitants, Romania is below the regional average. In contrast, Poland has an average of 510 sqm per one thousand inhabitants and the Czech Republic, 840 sqm per one thousand inhabitants. In the next 5 years, CBRE data indicate an increase in the industrial space stock by over 50%, up to 8 million sqm. Currently, real estate developers have almost 400,000 sqm of industrial space under construction.
Investments on the Romanian real estate market grew 32% to over EUR805 million in 2020, with the largest land transactions exceeding EUR220 million. The office space segment expects over 230,000 new square meters in 2021, the industrial sector saw a 60% surge in leases and the residential sector saw a 20% rise in luxury home prices, per data from Crosspoint Real Estate.