re:FOCUS on Retail & Logistics: Unlocking Romania's Industrial and Logistics Potential

In the latest discussion panel of re:FOCUS on Retail, Couriers & Logistics 2024, titled “Industrial & Logistics Developments Panel,” prominent figures from the industry provided valuable insights into the changing landscape of the Romanian market. Their collective vision underscored Romania’s potential as a competitive force in the regional market, emphasizing innovation, strategic planning, and adaptability as key drivers for future success.

Laurentiu Duica, Managing Partner at Winstone Real Estate:

“Discussions are ongoing, but from what I understand, Romania’s project is not yet finalized, unlike the first major productions in the last 10 years in Romania, especially in Oradea, where Varta is trying to start something in the western region. There were also talks about Craiova. This new government institution has taken over the function of accessing funds and support. We greatly desire support and wanted to simplify the procedure because we want to invest simply: invest 100 million, receive 5 million in state aid, create 2000 jobs, or 1000 and get an additional 3 million in state aid. It’s not that complicated, but we tend to complicate things ourselves more than anyone else could.

The market is growing and fragmented, held by various developers, local or regional. The potential is significant, and in the near future, not necessarily due to delivery pressure since couriers, greatly facilitated by a large number of easyboxes, can handle it, offering rapid deliveries. The showroom market is growing, and I see them being placed in cities. I don’t understand the authorities’ reluctance to authorize such spaces. They don’t pollute, don’t require large trucks, are used as mini assembly showrooms and storage near transport facilities.”

Cristina Pop, Head of Asset Management at P3 Romania:

“It’s only a matter of time until either owners will relocate because they have no choice, or the respective owners will upgrade those buildings to current standards. Given recent events and the standard of warehouses currently being built for logistics or production activities, these need ISU (Emergency Situations Inspectorate) approvals to meet European standards.

Managing clients of 300-400 sqm is more intense than tenants of 5000 sqm or more. However, these smaller tenants today might grow to medium or large sizes in a few years. It greatly depends on the type of investor willing to undertake this, and regarding power, yes, it’s limited in our country. Specifically for our park, having an existing power supply was a decisive factor in choosing P3 as the future production space for a company that relocated to a central city location in the west zone of the park. Indeed, otherwise, it would take at least 6 months to a year to supplement with an extra megawatt or two.

Looking at spaces with areas of 300-500 sqm, we’ll see many are owned by local rather than institutional investors, who hold the maximum percentage of the total industrial and logistics spaces.”

Lucian Opris, Director, Tenant Services, Office 360 & Industrial at Colliers:

“At Colliers, we like statistics, and we looked into consumption. We consume goods and services about 80% of the European average; we indeed buy them cheaper than most Europeans. But in terms of volume and the need for storage, they are roughly the same. This is in the context where the Class A stock in other countries is up to seven times larger than what we have, specifically the 7 million square meters reached today in Romania. Let’s make a small comparison with the Netherlands. In the Netherlands, there are 2 square meters per inhabitant of Class A storage. We’re not comparing ourselves to the Netherlands yet, but I believe that the 0.3 m² per person we have in Romania is very little at the moment, and we can compare more objectively and closer to home by noting that the Czechs have three times the stock per capita, and we’re not that far from the Czech Republic. So, this statistic doesn’t do us justice; we need Class A spaces in Romania.”

Daniel Cateliu, Director Industrial & Logistics at CBRE Romania:

“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.”

Serban Juverdeanu, Head of Business Development at Globalvision:

“Târgu Mureș has a very advantageous position; it is located in the center of the country and is well connected to all historical regions. We started the project in the same way we developed most of them, with an initial anchor. However, we built 16,000 square meters in one location. The first tenant had 6,000 square meters, and the rest was leased last year to a second tenant for production. However, not only Târgu Mureș, but I am speaking specifically about Târgu Mureș, has a clear deficit of industrial and logistics spaces. There are large companies operating in unhealthy, old spaces without any decent conditions. Here, especially in a city like Târgu Mureș, a speculative development of approximately 20-25,000 square meters with expansion options would be worthwhile, and we are considering doing this. There is a consistent pipeline, a multitude of tenants who can no longer be accommodated anywhere. There is also available land with approved urban planning, with very good connectivity to national roads and highways. The same goes for Constanța. We have a potential first tenant, also for 5,000 square meters, but because there are many interested in spaces, we need to find a solution. It’s a bit complicated because the market has changed, and investors’ expectations are much higher. Unfortunately, we’re not able to control construction material costs very well; instead, we are looking for alternative options, such as mixed structures, that would allow us to address a type of supplier that could enter the market with a different solution.”

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