Coffee with Craig Show – daily CRE news covering the CEE region, with Publisher Craig Smith and Winston Norman, Editor and Chief of EuropaProperty.com.
Retail development pipeline strong in Romania
Romania’s retail stock is set to expand by around 90,000 sqm in 2024. However, the development pipeline is strong for the 2025-2028 period, with a few large shopping centres expected to add several hundred thousand of leasable space to the local market, according to Colliers data.
In Cluj-Napoca, Iulius plans to deliver a mall spanning 100,000 sqm, while Prime Kapital and MAS REI will develop in the same city a retail scheme of 70,000 sqm. In Iași, Prime Kapital and MAS REI will also deliver an extension of nearly 60,000 sqm to Moldova Mall by the end of 2025.
“The shift in mindset towards bigger projects shows an increased risk appetite and confidence in the country’s longer-term path. There is still room for such sizable shopping in many big cities, including Bucharest, where the problem has been more one of securing adequate land plots with good infrastructure connectivity,” said Liana Dumitru, Director of Retail Agency at Colliers.
2023 saw tenants eager to sign contracts in Poland’s regional office markets
In 2023, Poland’s largest eight regional office markets delivered 280,000 sqm of space, bringing the sector’s total stock to 6.68 million sqm. The new supply slightly increased the vacancy rate, stabilizing around 17.5 percent at the end of December 2023 reports consulting firm, AXI IMMO, on the situation in Poland’s eight largest regional office markets.
Emilia Trofimiuk, Research Manager, Research Department, AXI IMMO, explains: “The situation in terms of new supply in regional office markets is still very dynamic. The nearly 290,000 sqm planned for delivery in 2024-2025 should be realized as announced by developers.”
Bartosz Oleksak, Associate Director, Office Department, AXI IMMO, adds “The relatively high availability of vacant office space presents an opportunity for new players interested in entering the Polish market.”
Jakub Potocki, Associate Director, Office Department, AXI IMMO, says: “Base rents should remain stable, and a downward trend is possible in effective rates, especially in older buildings.”
Reduced office completions and construction starts for Prague
With no office buildings completed in Prague in Q4 last year, 2023 ended with a new construction volume of 98,400 sqm in 7 projects. Nevertheless, this was the highest result in the past three years. Also, no new construction began during the last quarter of last year, extending the period without office construction to a full 18 months. Although the upcoming shortage of new supply will not become fully apparent until 2025, leasing opportunities are already very limited, this is according to a survey by Colliers.
“Vacancy rates in Prague have long been the lowest compared to other Central and Eastern European capitals, where they are currently in double digits. However, vacancy hangs over Prague like a double-edged sword in the form of lost opportunities. There is space available but still, the market may not have enough leasing opportunities to satisfy all potential incoming foreign investment or existing growth,” comments Josef Stanko, senior analyst at Colliers.
For 2024, Colliers currently expects 84,000 sqm of new office space. Approximately 44 percent of this volume is already pre-leased and the remaining space is expected to be absorbed soon.
SHD to deliver residential project in Prague 9
Rezidence Klíčov, a SHD Real Estate residential project, is moving into the construction phase. Rezidence Klíčov comprises 54 units across three multi-storey buildings. Construction works are expected to be completed at the end of 2025.
“With all necessary permits secured, we are bringing Rezidence Klíčov to life,” says Roger Dunlop, CEO at SHD Real Estate. “Set in a prime Prague location with excellent connectivity, this development will be defined by attractive architecture, great amenities, and a real sense of community. Its combination of modern living, intimacy and location is a rare blend, and we’re proud to open up such an opportunity for home ownership in Prague.”
Based in Prague and carrying out a range of residential projects throughout the Czech Republic, SHD Real Estate is backed by private equity investment groups and private equity fund managers Elstone Limited.
