Tudor Iuga (Simon & Partners) comes at re:FOCUS on eCommerce, Retail & Logistics 2023

Tudor Iuga, Partner, Land Development, Industrial, and Logistics, Simon & Partners Real-Estate Advisors, will be a speaker in the second panel of Business Review’s re:FOCUS on eCommerce, Retail & Logistics 2023. In this session, dedicated to the Romanian Retail, Logistics, and Industrial sectors, Tudor Iuga will explore the key trends & challenges of the industry in 2023, previewing them in an exclusive interview for BR.

What did 2022 mean for the industrial and logistics spaces segment and how do you think this sector will evolve in 2023?

I would define 2022 for Industrial Real Estate Market by one word: record. The stock of modern industrial spaces overpassed 6 mil sq m in the 3rd quarter of the year, with a leasing activity that exceeded for the 1st time in history the born of 1 mil sq m. It was a very strong year also in terms of completed constructions, reaching a level of 800k sqm, with a trend of vacancy decreasing to under 5%. This will lead to a market of the developers in the following 2 years for the entire country. We already feel it in regional towns/counties as Cluj, Brasov or Northern part of Bucharest.

Discussing about 2023, even if all around us we are hearing about the word „recession” we should look for the industrial sector performing better than the other real estate segments, with Romania, a country under development benefitting from strategic position for developing the EU / CEE economy, being favorised of multiple macro-economic factors.

What will be the main obstacles but also the factors favoring the development of the logistics sector in Romania?

Getting deeper into what happens all around us, I would like to remind some threats that will influence the path of Romanian economy and, of course, the Real Estate sector: the war that is neighboring us, which can be looked both as a threat and an opportunity due to the relocations of the companies from Ukraine / Russian Federation. Still low competitiveness of the Romanian national or local authorities grants support, compared with countries from CEE region, like Slovakia, Hungary, Czech Republic or Poland. We have now some positive examples in towns like Oradea, Targu Mures or Arad, hoping that this will become the new norm. Other positives arguments for the Romanian market that deserves to be mentioned are the new investments done through PNRR program in both utilities, roads or rail infrastructure that for sure will increase the level of interest for new investments, as we all know, infrastructure is the key in our field. From investment point of view, our country is positioning as an opportunistic market, due to the yields level of 7-8% compared with neighbouring countries, where a level of 5-6% can be found.

What is happening in terms of trends in the CEE profile markets and which of these trends will translate to Romania?

As a strong connectivity Romania has with both US and EU markets, it’s our duty to remind that their economy trends are present also in our country: Yields decompression, which together with high interest rates, high inflation and raised construction costs will lead to a decreasing of new speculative constructions. These trends will translate into rent level increases for industrial sector. Still, taking into consideration the challenges that Supply Chain met during last two years, both nearshoring and friendshoring are expected to flourish in the following period, finding Romania in a very attractive position due to costs and availability of workforce, by being the 2nd biggest country in CEE, benefitting from a strategical geographical position with respects to EU market. Nowadays, our country benefit from both the EU and national financing programs, which tend to work better and better for new investments.

I would take the courage to conclude that Romania is the new Poland for the EU economy.

DMCA

PROTECTED