According to the latest market report published by JLL, Bucharest City Report, over 215,000 square meters were delivered on the Romanian industrial market between January and September, of which 187,000 sqm in Bucharest alone. The remaining 28,100 sqm are located in the central area of Romania. The total stock in Romania exceeded 2.9 million sqm at the end of September.
By the end of the year, projects totaling 120,500 sqm are expected to be delivered in Bucharest, Timisoara and Roman, with the modern stock in Romania exceeding the 3 million sqm.
On the Bucharest office market, developers delivered projects with a total area of 114,200 sqm in the first nine months. The center-west area benefited from the largest office area delivered this year, with 64,200 sqm in two projects, and the completion of the first phase of New Times Square (33,000 sqm). The southern area is second receiver of the new stock in the first nine months.
The office stock in Bucharest increased to 2.5 million sqm, the reports showed.
In the last quarter of this year, a single large-scale project will be delivered in Bucharest, of 29,000 sqm, Globalworth Campus Phase 1, in the Dimitrie Pompeiu area.
The first nine months of 2017 were very poor in deliveries of retail projects, with only 11,000 sqm in the expansion of Sun Plaza Shopping Center.
However, by the end of the year, the modern retail stock will grow by 60,000 sqm in three projects, all developed by NEPI. One is a new project – Ramnicu Valcea Mall (28,000 sqm), and two extensions of existing shopping centers in Galati and Sibiu.
The stock of modern commercial spaces in Romania is estimated at 3.05 million sqm, of which 1.11 million sqm in Bucharest.
For the first nine months of 2017, the property investment volume for Romania is estimated at EUR610 million, nearly 44% higher compared with the same period last year (EUR423 million). The number of transactions increased, with the average deal size standing at approximately EUR25.3 million.
On the property investment market, the retail sector was the star, cumulating 60% of the volume traded in the first nine months. The sector was driven by the acquisition of 50% of the retail and office portfolio of Iulius Group (Iulius Mall Cluj-Napoca, Iulius Mall Iasi, Iulius Mall Timisoara and Iulius Mall Suceava and three office buildings) by the South African Atterbury Group. This is the first investment of the South African fund in Romania.
Deals involving office buildings neared 25%, while the remainder was represented by industrial and hotel assets.
The most notable office transaction was the acquisition of Coresi Business Park by Immochan from Ascenta Management for around €50 million. This marked the entrance on the office market of the investor/developer which previously was focusing on retail projects.
The largest deal in the first half of the year was the acquisition Renault Warehouse Oarja by Globalworth, for approximately EUR42 million.
“According to investment plans announced by developers, 2018 will be a richer year in new deliveries than 2017, especially in the office and retail sectors. If all the announced projects are completed, the office stock in Bucharest will grow by over 300,000 sqm and the retail stock in Romania will be richer by 200,000 sqm. On the industrial segment construction advances faster than for office buildings or shopping centers, so even though 120,000 sqm have been announced, we estimate new deliveries will be much higher,” said Andrei Drosu, Research Department consultant at JLL Romania.