C&W Echinox: Developers to deliver around 1.2 million sqm of industrial, retail and office spaces in 2019, a new record for the local market

The local real estate market has entered a new year of development on all its major segments, as investors plan to deliver industrial, retail and office spaces with a cumulated area of ​​1.2 million square meters, a new market record. In comparison, new spaces of around 850,000 square meters were delivered in 2018, according to data from Cushman & Wakefield Echinox.

The positive evolution of the development activity comes from the sustained demand from tenants over the last three to four years, as pre-leasing contracts have been signed for more than half of the new spaces that will be delivered this year.

The total retail stock exceeded 3.7 million square meters at the end of 2018, almost like the office one, while the industrial & logistics stock was of around 3.5 million square meters. It is expected that 600,000 square meters of industrial and logistics space, over 400,000 square meters of office space and 200,000 square meters of retail space will be delivered in 2019. In regard to Bucharest, around 300,000 square meters of industrial space and 300,000 square meters of office space will be delivered, while the Colosseum and Veranda Mall projects will be extended with a cumulated surface of approximately 25,000 square meters.

New retail spaces will be delivered this year in Sibiu, where NEPI Rockcastle will complete the Festival project and the extension of Shopping City Sibiu, and in Timisoara, where Iulius Group and Atterbury will deliver the extension of the Iulius Mall project. Between 2015 and 2018, the local retail market increased by almost 40% while the dominant shopping centers constantly had an occupancy rate of almost 100%.

In Bucharest, new office buildings with an area of ​​about 500,000 square meters are currently under construction, while office projects with a cumulated GLA of 300,000 square meters are expected to be delivered by the end of 2019. The most active developers in terms of deliveries will be Portland Trust (63,000 sqm in Expo Business Park and Oregon Park), Vastint (62,000 sqm in Business Garden and Timpuri Noi Square), Globalworth (42,000 sqm in Renault Business Connected) and River Development (38,000 sqm in The Light and Sema Offices).

The office buildings sector is developing in other major university centers, such as Timisoara, Cluj-Napoca, Brasov and Iasi, as new buildings with a total area of around 130,000 square meters will be delivered this year.

After a stagnation period of six years (2009 – 2014), the industrial & logistics sector has resumed its growth in 2015 and will reach a peak this year, when developers are planning to build new warehouses with a GLA of ​​around 600,000 square meters. The most active investors will still be CTP and WDP, which have been the market leaders in recent years, followed by developers such as VGP, P3, Global Vision or Transilvania Constructii.