The first nine months of 2023 look good for the industrial and logistic real estate sector, with total leasing demand of 550,000 square meters during this period being higher than last year’s level.
The total supply should near 7 million square meters this year, up from 6.2 million square meters at end-2022. With another half a million square meters that should be added in the following quarters in various regions of Romania, it is obvious the focus is shifting from Bucharest to other cities.
Bucharest (36%), Timisoara (26%), Brasov (12%) and Slatina (10%) concentrate the largest part of industrial and logistic leasing deals sealed in Romania in the first three quarters, confirming the tendency of deals outside the capital cities overshooting those of Bucharest.
“This focus shift is largely accounted for by several factors, including the stronger expansion of retailers in various regions of the country where they previously had limited exposure, a tendency of increased industrial operations, workforce availability and cos and recent or expected improvements related to infrastructure. Another quite relevant tendency is Romania having become a more visible regional distribution center. Initially, interest in such locations primarily targeted Bucharest, but we’ve noticed many companies also looking at other cities for such hubs. Moreover, amid the more expensive employees of Poland, Czechia and Hungary, Romania is set to become an even more luring proposal as an expanded regional center. Additionally, Romania offers workforce costs comparable to those of China for industrial operations,” explains Victor Cosconel, Head of Leasing, Office & Industrial Agencies at Colliers.
By sectors, a third of overall 2023 leasing contracts were signed by logistic companies, with around 160,000 square meters, followed by the automotive sector, with around 120,000 square meters.
Outlooks remain upbeat for the local industrial and logistic market and there still significant room for growth compared with other ECE countries. Demand for logistic spaces and expansion are expected to remain solid in the future.
Geopolitical changes now occurring globally support the idea that many logistic and production operations will try to move from Asia close to home, meaning west-European producers are likely to prefer bringing at least part of operations closer, and Romania is set to be a main destination.
In conclusion, Romania can host a much bigger stock of I&L spaces, topping 10 million square meters by the end of this decade.
(English version by Catalina Apostoiu)