Realty Forum 2023: Charting the Course for Innovation and Sustainability in Romania’s Industrial & Logistics Sectors

The highly anticipated Realty Forum 2023, organized by Business Review, became a captivating convergence of industry leaders and professionals. The prestigious gathering delved deep into the dynamic landscape of the industrial and logistics sectors. Amidst this esteemed event, Panel 2, titled “Industrial & Logistics Sectors, Trends & Opportunities” and moderated by Daniel Cautis, shone a spotlight on the realms of innovation and sustainability. Their collective aim was to illuminate the path forward, unearthing the emerging trends and boundless opportunities that await Romania on its journey to an even brighter future.

Daniel Cautis, Managing Partner at Dunwell Industrial Brokerage was the moderator of Panel 1 of Realty Forum 2023, titled “Industrial & Logistics sectors Trends & Opportunities”. With a stellar career of 15 years, Daniel Cautis has an impressive background and extensive experience in the industry. Since his appointment as Managing Partner at Dunwell Industrial Brokerage nearly 6 years ago, he has worked closely with global and local developers to help businesses grow their manufacturing or storage capacities.

“In the last 2-3 years, the industrial sector has been the most resilient. There have been few cases where tenants occupied smaller spaces, and there have been many instances, even during the pandemic, where these spaces expanded, especially in e-commerce and do-it-yourself industries. We can observe the ongoing construction of highways in Romania. Currently, we have just under 1000 km of highways, 995 km to be precise, and 678 km are under construction. From my point of view, it is an extraordinary moment, and there will be a significant take-up of highways, around 68%, which will impact us all. This will affect not only developers but also retailers and construction material suppliers.”

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Unlocking New Frontiers: Auchan Retail’s Vision for Logistics and Retail Expansion

Venera Munjev, Asset & Expansion Manager at Auchan Retail, unveils the company’s ambitious endeavors in both the logistics and retail sectors, emphasizing the importance of developer courage in shaping their expansion strategy.

“From a logistical point of view, last year we opened a 20,000 square meters warehouse in Hunedoara. As for retail, it depends a lot on the courage of developers. We didn’t primarily aim to develop the 250,000 square meters segment, which is the supermarket segment, which means we need quite an interesting catchment area, and where developers create residential areas and commercial hubs, we will try to join them. For now, we are trying to use the existing hubs, both the one in Bucharest and the one in the center of the country. We would really like the infrastructure to reach at least the level we can observe in the picture.

We have adjusted the supermarket format, reaching a Gross Leasable Area (GLA) of 2,500 square meters, a large supermarket, as it is not yet covered on the market, and it worked very well for us. Option 1, which happened in Timisoara Buziașului and Turda, has shown us that it is necessary. So, we adapted the ones that are around 3,300 square meters to 2,500 square meters and opened one in Iasi, where we already had a hypermarket implemented. For us, it is very important that when we develop a supermarket, we use hypermarkets as production and supply hubs. We knew the area very well, we already had a hypermarket there, we had a relationship with Iulius Group, which is involved in multiple projects in the country, and we believed in the project. I hope that once our competitor has placed a point on the logistics map at that level, it will be a benchmark.”

Driving Economic Growth: Global Vision’s foresight for Logistic and Industrial Development

Tatiana Pria, Leasing Manager – Industrial at Global Vision, talks about the company’s resolute commitment to ambitious development projects in the logistic and industrial sector. With an unwavering determination to foster growth, Global Vision is all set to redefine the dynamics of logistic and industrial spaces while leaving a profound and lasting impact on the local and regional economy.

“The projects in the pipeline are ambitious and designed to generate a significant economic impact at both regional and local levels. We aim to develop strong business communities – our parks become business hubs hosting players from various industries who want to expand and optimize their operations.

The industrial market in Romania is relatively young, with room for growth and development, and it will transform into a regional center. As a developer of logistics spaces, we will continue to invest in distribution centers, such as the one in Constanta, Chitila, and the ones in our development pipeline, including Otopeni, the only project to be developed near the international airport.

We are focusing on expanding the Constanta park, a mixed-use project with retail, office, industrial, and logistics spaces, along with an intermodal terminal. We have already delivered two buildings of approximately 40,000 sqm and plan to expand with an additional 40,000 sqm out of the planned 120,000 sqm of warehouse space. We rely on its strategic positioning in terms of infrastructure, road access, and rail facilities. The terminal will have an unloading and loading platform of around 70,000 sqm and a storage area of 130,000 sqm. It is an essential component of the park and, along with the multiple functions of the project, will become a strategic center in proximity to the Constanta port.

Global Vision applies an indexing mechanism in line with inflation and recent price increases, and together with our partner, Globalworth, we position ourselves as flexible developers close to the tenant community. All lease contracts include an indexing clause, and we have a diverse range of industries and businesses in our portfolio that also apply this pricing update mechanism. We rely on this portfolio diversity, which supports us in dealing with changes.

Mureș City Logistics is the pilot project of the City Logistics Last Mile series, a concept launched last year as part of our strategy to develop industrial and logistics projects in close proximity to major cities in all regions of the country, and it was fully leased in a record time, just a few weeks after the project’s delivery. We plan to implement this concept in Craiova as well, in an industrial project that will be developed in construction stages, and we also focus on expanding the Constanta park.

Proximity to a transport hub, including road, rail, air, or port facilities, represents the next challenge for major players in logistics, and we will launch the development of this type of concept in the project near Otopeni airport, in Chitila, next to the existing park, and in Craiova.”

Pioneering Sustainable Solutions: ARISTON GROUP’s take on Energy Efficiency

Daniel Buhazi, Commercial Director at ARISTON GROUP, sheds light on the company’s steadfast commitment to efficient energy solutions and sustainability in recent years. Today, their efforts and foresight are reaping rewards as their ventures materialize and demonstrate the company’s alignment with the right path.

“Our activity in recent years has focused mainly on efficient energy solutions and sustainability. We operate in two main channels: one for domestic applications and the other for commercial purposes, covering office, residential, and industrial areas. Together with the brand Elco, which has been part of our group for about 20 years and is a German manufacturer of high-power boilers, we launched our large-scale applications business approximately 7 years ago. Even back then, we were looking at these projects, anticipating the market’s evolution towards smart solutions, connectivity, energy efficiency, and more. Now, we find ourselves in a fortunate context, as what we have built so far is materializing and showing that we are on the right path. Unfortunate events in recent years have accelerated certain trends and behaviors towards choosing energy-efficient solutions. Investors are highly focused on implementing smart, energy-efficient, and sustainable solutions, and as a manufacturer, we have a significant responsibility in the innovation field. The company puts efforts and work into the area of innovation.

As we know, during the pandemic, the office sector started to decline, while residential, which began with a strong pace, ended up being under-regulated for nearly zero-energy buildings (nZEB). Old central heating systems or individual wall-mounted solutions have started to disappear from significant locations in the country and have been replaced with large boiler solutions in centralized systems with hydraulic modules or heat points. We are talking about heat pumps, which are part of a modern and updated solution that is increasingly being implemented in Romania. It is a new and modern solution compared to Western Europe, where heat pumps have been implemented for several years. In this direction of energy efficiency and sustainability, we are building and moving forward.”

Navigating Industrial Challenges: Insights from ROCA Industry

Ionut Bindea, CEO at ROCA Industry, provides valuable insights into the opportunities and challenges faced by ROCA Industry, highlighting their dedication to staying agile and innovative amidst changing circumstances.

“We are all pleased with this development of highways. From an industrial perspective, we are also pleased to see that at least on paper, there are projects starting to appear for the development of railway transport. We must consider that road transport is like a retail route, but major industrial routes also need railways, and we are looking forward to more projects in the maritime transport area, where we expect the biggest impact.

From the manufacturer’s point of view, we have gone through a period that I would characterize as full of nervousness because there were many elements, especially geopolitical ones, that influenced raw material prices. We had some relief when the logistics chains between China and other countries were unblocked after the pandemic. At the moment, we have a certain stabilization and predictability, and we are in a situation where there is very high demand pressure. We managed to maintain our volumes compared to last year, which, in a declining market, means that our market share has increased for almost all companies in the portfolio. However, there are two other elements that we see: very high margin pressure, as we are sharing this reduced purchasing power with contractors and developers. On the other hand, we are facing a context that shows a significant reduction in the area of quality.”

Driving Investment and Growth: Mihai Diaconescu, Country Manager at Logicor Romania

Mihai Diaconescu’s perspective offers a glimpse into Logicor Romania’s proactive approach to seizing investment opportunities in the thriving logistics sector, promising growth and impact in the Romanian market.

“It is truly encouraging to see what we have on the map in the image, and something we must keep in mind, which I believe we all feel at the operational level. We feel it quite well internally, as we see a competition for investment projects between countries, and this competition also manifests within our group, as we operate in Hungary, Poland, the Czech Republic, as well as Western countries. From this perspective, we are a company with a rather defensive investment profile. However, once we choose a location and validate it for our development, we move forward with great confidence and act decisively to make investments.

Currently, we have started from 160,000 square meters. We have delivered almost 85,000 square meters in the last 24 months, and we have 40,000 square meters under construction in the Bucharest area. We will also start a new project of 26,000 square meters in the Bucharest area. We already have a construction permit obtained in Timisoara. Our focus now is to consolidate in the Bucharest area and in major urban centers in the west, such as Timisoara and/or Cluj.

The logistics area is slightly advantageous, being more located in cities or in the neighboring communes of major cities. In those places, we have seen an extraordinary openness, both from us and our competitors, to move forward with the investments we have. We work to obtain the necessary authorizations and the support needed to develop these projects.”