In terms of leasing transactions, the first three months of 2024 have shown reduced activity in the industrial and logistics (I&L) real estate sector, with lease agreements covering approximately 150,000 square meters, a significant decrease from the 270,000 square meters in the same period in 2023, according to Colliers' data, which is based only on public information.

New project deliveries were also limited in the first quarter, with the total modern stock increasing from 7.1 million square meters. However, the second half of the year is expected to be more active, with over half a million square meters estimated to be delivered.

Bucharest accounted for just over half (56%) of the lease transaction area in the first quarter. However, Colliers consultants do not consider this necessarily a new trend, but rather an exception.

Developers and tenants are increasingly focusing on other areas of the country where industrial and logistics spaces are less prevalent but have potential for future infrastructure improvements.

The vacancy rate for top-tier warehouse spaces remained in the single digits, often below 5%, in most submarkets in Romania, including Bucharest. This indicates that for tenants exceeding a certain size, it may be difficult to find the desired space in terms of costs and location.

Nevertheless, an increase in speculative developments could reduce this pressure later in the year. However, there are a considerable number of vacant spaces available within those leased by 3PL players, which could influence the overall situation.

Regarding rents, Colliers consultants observe upward pressure in some submarkets. For top properties in dynamic cities, average rents generally range between 4.5 and 5 euros per square meter, but certain properties have exceeded this range.

From a European perspective, the approximately 20% rent increase in Romania, although significant for the local market, is modest compared to the 50-60% or higher increases observed in countries like the Czech Republic, Germany, or the Netherlands.

Prospects remain optimistic for the local industrial and logistics market, with significant room for growth compared to other Central and Eastern European countries.

With approximately 19 million inhabitants and about 7.1 million square meters of modern warehouses, Romania's warehouse stock per capita is much lower compared to the approximately 31 million square meters in Poland, which has a population of nearly 37 million, or the over 11 million square meters in the Czech Republic, which has a population of less than 11 million.

Regardless of the companies opening production units or regional distribution centers, Colliers consultants believe that Romania's warehouse stock remains underdeveloped to meet the demand of a consumer market of this size.

The Director of Colliers forecasts that, despite the drop in activity in the first three months, 2024 will end with a decent result, comparable to the post-pandemic average, i.e., around 700,000 - 800,000 square meters of I&L spaces leased.

This takes into account that "several larger contracts are already in the works, and our strong internal pipeline supports this forecast, with some room for positive surprises." (Photo: Freepik)