Real estate investments still high with rising interest in industrial space
Over recent years, Romania has become one of Central and Eastern Europe’s most attractive regions in which to start operations. According to research by JLL, by the end of 2020 the country is expected to be the second largest economy in CEE and it continues to attract investors from all over the world – not only from Europe, but also South Africa, the USA and China.
Romania: Industrial & Logistics Barometer Spring 2019
The Romanian industrial and logistics market ended a less than stellar first quarter, with total leasing transactions of storage spaces more than halving in 1Q19.
Still, robust private consumption fueling demand for warehouses and our own pipeline suggest that the second part of the year should be more dynamic; indeed, last year’s fourth quarter alone accounted for half of 2018’s activity.
As a special theme for this quarter, we analyzed the regional intensity of national freight transport operations based on the quantity of goods loaded and the results underscore big discrepancies. Indeed, the most active 7 regions (including Bucharest) add up to one third of the total quantity of transported goods each year, whereas the 7 least active counties scrape together just about 6% of the total market. We expect these regional hubs to continue expanding nicely over the longer term and also expect at least one strong center to emerge in the region of Moldova over time.
Romania Industrial Market Overview 2019
Romania’s industrial stock currently stands at around 3.75million sqm, with another 400,000sqm planned to be delivered by the end of 2019. Thus, 2018 has marked a new record on the industrial market, with approximately 455,000sqm delivered in a single year. Bucharest continues to be the largest market, with a 2.2million sqm stock at the end of 2018.
Industrial Market – South Region 2019
The Q1 2019 property investment volume for Romania is estimated at circa €119.5 million, a value almost three times the one registered in the same period of 2018 (€44 million). Moreover, there are a number of transactions in different stages of negotiations that will most likely be concluded during the remainder of 2019. In comparison with Q1 2018, the number of transactions decreased, however, the average deal size increased, standing at approximately €40 million. Bucharest accounted for less than 4% of the total investment volume, mainly due to a very large retail portfolio transaction that closed during Q1 in various regional cities. Market volumes were dominated by retail transactions (almost 95%), while office accounted for less than4%.