By Andra Beltz
The stock of industrial and logistics spaces in Bucharest has doubled between 2015 and 2020, the capital of Romania being the most dynamic market in the Central and Eastern European region and a logistic regional hub throughout the analyzed period, according to the real estate consulting company Cushman & Wakefield Echinox.
At the beginning of 2019, the stock of logistic spaces surrounding the Capital has exceeded the 2 million square meters threshold, getting close to the Budapest level of 2.3 million square meters which increased by approximately 23% over the last five years.
The area of modern logistics spaces in Bucharest is above the level of Bratislava (1.3 million square meters), but still remains below the level of Prague (3.2 million square meters) and Warsaw (4.3 million square meters), these being the most developed logistics markets in the region.
Given that developers are building new spaces with a leasable area of over 150,000 square meters, the Bucharest logistics market will continue to grow during this year, in order to meet the demand from online retailers and FMCG, two areas that have been less affected by the restrictive measures taken by authorities to limit the spread of the Covid-19 virus.
However, we notice a more cautious attitude of developers, who focus almost exclusively on built-to-suit projects or those with a significant degree of pre-lease, thus seeking to reduce the vacancy risk.
Rodica Târcavu, Partner Industrial Agency Cushman & Wakefield Echinox: “We observe the continuity of projects that started in 2019, both from the perspective of developers and companies generating requests for storage spaces. The most represented sectors are those of general goods, the pharmaceutical industry and the complementary sectors, the logistics and transport companies that provide services for these companies. The dynamics of the logistics and industrial market reflects accurately the fact that the economy operates even in the most difficult periods, the final consumer being the engine of this development. In addition to the approximately 90,000 square meters leased in the first quarter, we estimate for this year transactions exceeding the total of 350,000 square meters, with over 50% of them concentrated around Bucharest, the top pole of this market.”
At a national level, the logistics and industrial markets reach over 4 million square meters, with important industrial development poles in Timişoara, Cluj or Ploieşti, cities that are well-positioned to attract new investment, as the tendency is to shorten supply chains and encourage local production for certain categories of products considered essential or strategic.
Andrei Brînzea, Partner Land & Industrial, Cushman & Wakefield Echinox: “On the industrial segment, the demand for logistics spaces for couriers in Bucharest and in the country have evolved directly proportional to the increased volume of online commerce in the last period. Retailers who have adapted very quickly to the higher online demand are now looking for storage space for these much stronger divisions. The industrial sector remains active, with a healthy evolution in various business segments. We estimate an increase in demand for spaces between 3,000 and 5,000 square meters inside the major cities, which makes the in-city logistics segment increasingly important for the new business model generated by the Covid-19 pandemic.”
Cushman & Wakefield Echinox, the exclusive affiliate of Cushman & Wakefield in Romania, owned and operated independently, has a team of over 60 professionals and collaborators offering a full range of services to investors, developers, owners and tenants. For more information, visit www.cwechinox.com
Cushman & Wakefield, one of the global leaders in commercial real estate services, with 53,000 employees in over 60 countries and € 8.8 billion in revenue, provides asset and investment management consulting services, capital markets, leasing, administration properties, tenant representation, design and evaluation services. For more information, visit www.cushmanwakefield.com
By Andra Beltz