CBRE: The industrial stock surpassed the four million sqm milestone: another one million sqm to be delivered by the end of 2020

The modern industrial stock exceeded the four million sqm during the first semester of 2019, since a new supply of 240,000 sqm was brought on the market and by the end of 2020. Approx. one million sqm are expected to be delivered, according to the latest research report “Romania MarketView H1” of CBRE Romania.

From the total modern stock of 4 million sqm industrial spaces, regional cities accommodate 55 per cent, while the capital city alone is responsible for the remaining 45 per cent, almost half of the total analysed schemes being concentrated in the most wanted place to be in Romania by industrial developers.

Industrial developments are scattered in the capital city proximities especially close to the highways, but the Western part concentrates the largest part, respectively 73 per cent from Bucharest’ total modern industrial stock. The Northern part is slowly developing accounting 15per cent from the total and is contouring as the next industrial hub of the capital.

“By the end of the year another approx. 380,000 sqm are expected to be delivered, most of them located in Bucharest’s outskirts. The under-construction industrial schemes have a very small vacancy, showing once again the developer’s inclination towards built–to–suit projects with a drop of the speculative building in an expansive market”, said Andrei Jerca, Account Director Industrial Advisory & Transaction Services, CBRE Romania.

From the total area to be delivered in regional cities, the Central part of Romania with 55per cent from the future new supply and the West and North-West part of the country with 25per cent from the total, obtained the developer’s vote of confidence to invest in nationwide industrial facilities.

A total area of approx. 580,000 sqm is expected to be added by the end of 2020 at the Romanian modern industrial stock considering both under construction and planned industrial projects.

The total leasing activity (TLA) in H1 2019 accounted for 113,000 sqm nationwide, with 33 per cent higher than the leasing activity registered in the first half of the previous year. The share of pre–leases represented 18 per cent of the total leased area. Bucharest attracted 75 per cent of the total leased sqm, while regional cities managed to obtain a quarter from the total.

At the end of H1 2019, the vacancy rate in Romania reached 5.9 per cent indicating a slight upward trend as industry players shifted their focus towards new developments as well as the recent investors’ appetite to develop small-sized semi – speculative projects. The asking headline rent remains constant at a level of 4 Euro / sqm /month.