At Business Review’s recent re:FOCUS on Retail, Couriers & Logistics, Daniel Cateliu, Director at CBRE Romania, offered profound insights into the evolving landscape of Romania’s industrial real estate market. Daniel perceives a shifting dynamic, particularly in the southern regions, where discussions primarily revolve around the production aspect. Despite existing demands, Daniel notes a prevailing sentiment of conservatism among clients, a stark contrast to the flexibility witnessed in previous years. He attributes this cautious approach to escalating financing and construction costs, which exert significant pressure on developers’ decision-making processes.
“Both on the retail and logistical sides, and especially on the production side, we’re mainly discussing the Southern aspect. We’re in a quite complicated period that still functions; we see demands, but we’re all having discussions with our clients and noticing a sentiment of conservatism that we didn’t see two years ago. Developers were much more flexible back then; now we see caution, and financing costs, construction costs are the main factors pushing developers to make decisions. Speculative building is not the big issue I see in the market; it’s in the secondary city areas that have become very important, especially for manufacturers. However, we encounter significant skepticism from major developers, and I believe it can be an opportunity for local developers with Romanian capital who can penetrate. If a manufacturer decides to set up shop in a secondary city like Pașcani tomorrow, we’ll probably have a small number of very large developers willing to invest in such a location. But I think it’s an opportunity for developers with Romanian capital who see the potential a bit differently.
We have a very good example in Global Vision, which was the first to bet on Constanța, took a speculative approach, and it’s a successful project despite Constanța still being a major city. I mean, it’s very important there. I believe there’s growth opportunity and entry because we see manufacturers following the workforce. Clearly, infrastructure paves the way, but manufacturers follow the workforce. We also see a lot of interest in small spaces. There’s a European trend, and we see many startups on LinkedIn and various platforms; these startups will clearly generate demand for small spaces. Besides, as companies grow, they’ll need good spaces. Another important aspect is if we’ll have a longer economic correction. During the last crisis, tenants with spaces of 2000-3000 m² downsized, and another very important argument for the small space market is e-commerce, which needs to be very close to end-users and tenants, and delivery needs to be very rapid. I believe developers focusing on small spaces are in a market that will grow significantly in the coming years.”