The expansion of logistics companies sustained the demand for warehouse spaces in Romania, a demand which totalled more than 330,000 sqm in Q1 2023, a 10 percent increase compared with the same period of last year, according to the Cushman & Wakefield Echinox.
Romania and Hungary are the only countries in Central and Eastern Europe where the take-up had a positive evolution in Q1, with decreases ranging between 20 percent and 50 percent being recorded in Poland, the Czech Republic and Slovakia.
Logistics operators accounted for approximately 50 percent of the Q1 2023 demand in Romania, with a significant activity also coming from manufacturing and FMCG companies. Net take-up (excluding renewals) amounted to around 200,000 sqm, with more than 50 percent of it being related to projects which are due to be delivered in 2024.
Andrei Brînzea, Partner Land & Industrial Agency Cushman & Wakefield Echinox, commented “The demand for industrial and logistics spaces remained relatively strong at the beginning of the year, even in a context characterized by high inflation and interest rates, decelerating consumer demand and overall economic uncertainly. Moreover, Romania continues to be a relevant market in the region, attracting companies which aim to strengthen or expand their presence in the CEE, offering some of the most competitive conditions when it comes to costs (including occupancy costs) and to the quality of the spaces built by developers”.
The demand was mainly concentrated around the major logistics hubs in the country, namely Bucharest (32 percent of the total volume) and Timisoara (25 percent), while tenants also showed interest towards Pitesti or Slatina.
In terms of supply, a slowdown of investments was observed in Q1, given that developers have taken a more cautious approach due to the economic uncertainties and also to the fact that fewer speculative projects are currently being developed. Therefore, nearly 100,000 sqm of new spaces were completed in Q1, below the Q1 average of the last two years, an average of 180,000 sqm respectively. The industrial and logistics stock reached 6.66 million sqm, with vacancy rates of 5.1 percent in Bucharest and 6.6 percent at the regional level.
The warehouse market in Romania still lags significantly behind the Czech Republic (11 million sqm), with Poland being the indisputable leader in the region, with a stock of nearly 29 million sqm.
WDP, VGP and Globalworth – Global Vision were the most active developers at the beginning of this year, as they expanded their portfolios with new projects in Bucharest, Brasov, and Targu Mures.
Developers plan to complete new projects with a total leasable area of 400,000 sqm across the country by the end of 2023, as Bucharest remains the preferred destination, with around 50 percent of the projects to be delivered being located near the capital city, while Brasov, Timisoara, Slatina, Arad and Sibiu will also benefit from new spaces in the coming period.
