Dunwell: Over 500,000 sqm of new industrial and logistic spaces to be delivered in 2018

The market of industrial and logistic spaces in Romania will continue the positive 2017 trend, with over 500,000 sqm of new industrial and logistic spaces expected to be delivered this year, Dunwell said. 

This development comes against the background of a 2017 with record performances in terms of logistic and industrial spaces, when approximately 350.000 sqm of new spaces were added to the existing ones, up by 13 pct compared to 2016.

“Right now the vacancy rates of logistic and industrial spaces is under 5 percent, with pressure on the offer. Our forecasts are that this growth trend will continue not only in 2018, when we expect around 500,000 square meters on new logistic and industrial projects, but through to 2020. The main trends we notice for 2020 are connected to the development of industrial parks, as well as to the way of approaching this development,” Daniel Cautis, Dunwell managing partner, said.

“The growth will also come from parks located outside of the capital. We will see in Bucharest an initial orientation towards inner city logistics and, not least, as a solution to diminish the workforce problem, developers will also build hostels as part of logistic parks,” Cautis added.

The surface estimated for the new spaces to be delivered, of 500,000 is made up of all deliveries of industrial and logistic spaces, including those developed in 2017 and delivered this year.

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“Responsible for this growing trend are the increase of consumption and expenses, due to tax cuts and salary increases, as well as the production sectors, which recorded an 8 percent increase year-on-year.” Moreover, relocations of tenants from old spaces to spaces with security and fire permits was an important factor. The real estate market was fuelled by these developments,” Cautis said.

The forecasts took into account several factors, among which the most important are : the history of all deposit lending transactions over the past 5 years; the surface of logistics and industrial premises built and delivered by developers in 2017, the number of industrial land transactions in 2016 and 2017 and those that received industrial PUZ or construction permits, in the last quarter as well as 3PL market customers’ demand from the end of 2017, currently pending, and which would be resumed in 2018, are the other factors that have influenced the estimates. Also, the 3PL tenants’ extension requirements, which aim at annual increases of at least 10 percent, and class B deposits (not taken into account) in class A deposits, had a significant share in the calculation.