The demand for industrial spaces maintains its dynamics in 2019

The demand of industrial and logistics spaces in Romania in 2019 reached a total of about 476.000 square meters, a value comparable to that of 2018, when the transactions amounted a total of 514.000 square meters. 

Bucharest attracted the largest demand of industrial and logistics spaces in the country, namely nearly 76% (approximately 360.000 square meters), followed by Slatina, with 13% of the demand (62.000 transacted square meters).

JLL recorded a market share of nearly 42% of the volume of lease transactions for industrial and logistics spaces leased by real estate consultants. The company achieved the largest transaction recorded in 2019, namely the lease of almost 72.000 square meters by the retailer Profi in CTP Bucharest West.

Other notable transactions in which JLL was involved in 2019 are the lease of 16.000 square meters by Urgent Cargus in the P3 Bucharest A1 Park and the lease of 8.400 square meters by Marelvi Impex in the MLP Bucharest West Park.

To be noted that of the total number of nation-wide leased spaces over the last year, more than 150.000 square meters (approximately 32%) represented transactions concluded directly between owner and tenants.

The evolution in 2019 rose to the level of the previous years, when a record number of demands was recorded on the market for industrial spaces.

“The demand for industrial spaces maintained its positive evolution over the past years. The appearance of new investors and the diversity of the locations in which they develop new projects has brought extra competition on the market, maintaining its dynamics. We follow the evolution of the demand with great interest, bearing in mind the fact that the industrial market reported a record in the demand over the past four years, especially given the expansion of retail and logistics companies”, stated Costin Bănică, Head of Industrial Department JLL.

JLL noticed an increase in the interest for production and industrial spaces, coming especially from companies operating in the automotive sector. However, these types of projects have longer implementation periods, extending to up to 18-24 months from the date when discussions are initiated. In case of logistics projects, the implementation period is usually of up to one year. 

In 2019, the stock of modern industrial spaces exceeded 4.3 million square meters, which is double the volume recorded in 2015.

Another trend for 2019 was the high interest of developers in attracting clients with spaces that are small, but that show great growth potential. Such clients, most of whom are located today in the spaces of former industrial platforms in large cities, will have to migrate to modern industrial spaces in order to provide better work conditions for their employees, but also to comply with the stricter regulations regarding fire safety permits. 

“We can see an increased interest of new investors in developing modern industrial projects within the city of Bucharest. Here we refer both to projects providing the possibility to lease smaller units of 800-1500 sqm, as well as large units in industrial buildings on several floors. These types of buildings are taken into account in areas in which the price of the land is high and an industrial development would not provide the performance expected by investors. We believe that 2020 will bring in Romania the first industrial projects developed on multiple floors”, Costin Bănică, Head of Industrial Department JLL România, also stated.

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