Real estate developers in Romania plan to deliver a record area of new commercial projects of over 700,000 sqm next year. The total investments in these projects are over €800 million, according to a report by real estate consultancy firm JLL.
Investments in office buildings remain the most popular among real estate developers, followed by retail projects, and logistics and industrial projects. This shows that investors have become more confident in Romania’s potential to produce returns. However, this also means that the buildings’ vacancy rates will go up and rents will go down, as the market will balance in favour of the tenants, according to JLL.
In 2015, the vacancy rate on the office market has dropped to about 13.1 percent and the level of rents has stayed the same.
The six biggest office projects expected to be delivered next year in Bucharest total a leasable area of almost 220,000 sqm. These include Globalworth’s Bucharest One tower, with a gross leasable area (GLA) of 50,000 sqm, which required a €95 million investment, Atenor’s Hermes Business Campus 2&3, with a GLA of 45,700 sqm, and Portland Trust’s Oregon Park, with a GLA of 45,000 sqm. All three are located in the Barbu Vacarescu – Pipera area, Bucharest’s busiest office area.
On the shopping centre segment, the openings programmed for next year are split between Bucharest and other cities. The capital has two new malls in the pipeline, the Park Lake Plaza mall, and Veranda Mall. Park Lake Plaza is by far the biggest investment to be opened next year, worth some €180 million. The opening of the 67,000 sqm mall developed by Sonae Sierra and Caellum Development in eastern Bucharest will be delayed, however, by some six months, due to permit issues, according to local news site Wall-Street.ro.
South-African fund NEPI, the biggest mall owner in Romania, also has three openings programmed for next year, all of them outside Bucharest. The biggest is the Shopping City Timisoara, a 55,700 sqm mall, in which NEPI has invested some €81 million.
The malls to be opened next year will add over 237,000 sqm of new retail space to the current stock, which is estimated at some 2.8 million sqm.
In the industrial and logistic segment, new deliveries programmed for next year are estimated at 195,000 sqm, with Czech groups P3 and CTP, and Austrian group Immofinanz among the biggest investors in this segment.