Colliers estimates industrial stock can still grow rapidly over the next three years, until 2023.
Romanian exports of goods to the UK are nearly two thirds higher than exports of services in terms of absolute value, but services have higher added value as the UK generates around 12% of external demand for IT services, for instance.
On the goods side, the UK is a major destination for the auto industry, textile industry and agriculture. Nearly 9% of Romania’s auto industry exports go to the UK, while on the women’s clothing segment, the UK attracts over 25% of Romania’s exports.
“A hard Brexit scenario could have significant impact on the short term and would also lead to long lasting effects because global production chains have become strongly integrated in recent years and Romania’s biggest export partners interact significant with the UK,” said Laurentiu Duica, Partner, Head of Industrial Agency at Colliers.
Demand for industrial and logistics stock grew nearly 40% on the year in the first nine months of 2019, to 306,300 square meters, but it is nearly 27% lower compared with the same period in 2017. However, 2019 looks like a solid growth year, Colliers estimates.
The Romanian industry is slowing down due to weaker external demand and the auto sector might see its first decline in a decade.
Private consumption remains decent in Romania due to double-digit wage growth and the need for industrial stock for the developing retail sector in Romania should remain a growth driver in 2020, as will online commerce.
Local industrial and logistics stock is seen growing considerably in the next three years if infrastructure projects gain visibility and fiscal policies don’t suffer major changes that would hinder investments in this sector, Colliers noted.