The vacancy rate on the industrial and logistics market is nearing 0. The reasons, JLL Romania argues, are the small number of deliveries of new projects and a sustainable demand in the first trimester of the year.
According to JLL Romania, in Q1 there were delivered only 27,000 square meters of industrial spaces, while net demand was almost 7 times bigger, reaching approximately 180,000 sqm.
The stock of modern logistics and industrial spaces stood at around 2.5 million square metersm resulting in a density of 128 square meters for 1,000 inhabitants, below the levels recorded in other Central and Eastern European countries. Over 1.2 million sqm are build around Bucharest, with 75 percent being built alongside A1 highway.
“The vacancy rate at the end of 2016 was estimated at below 5 percent in Bucharest and of less than 10 percent in the rest of the country. But given that there were traded spaces almost seven times bigger than the new offer, the vacancy rate is nearing zero. Currently, it is very difficult to find spaces than the new demand. That is why, we see an increase in the volume of spaces developers are starting to build speculatively, without a secure rental contract. These spaces are contracted by tenants as soon as they go on the market,” said Costin Banica, Head of Industrial Agency JLL Romania.
From the point of view of demand, compared to the first semester of last year we see an advance of over 40 percent, with the entire surface representing net request, represented by new and biilt to suit contracts.
The structure of demand shows that 70,000 square meters, representing 40 percent of the total represents spaces rented by logistics companies, while retailers signed deals for 53,000 square meters, representing 30 percent of the total.
More than two thirds of the demand in the first quarter, over 97,000 sqm was directed at the Bucharest market. Timisoara, Ploiesti, Cluj and Roman also attracted companies for industrial and logistics spaces.
For the remainder of 2017, developers announced a record level of 400,000 sqm of new projects, developed to repond to the reduced vacancy rate and record demand. If all projects announced will be completed, this year the new offer will exceed that of 2016, when projects of around 300,000 square meters were delivered.
„The sustainable evolution of the industrial and logistics market in the past years raised the appetite of banks for funding this kind of projects,” Banica said.