Cushman & Wakefield Echinox: 2017, the record level of new industrial sites in Romania

By Emea Riga

The industrial and logistics sector in Romania will record a record level of deliveries of about 480,000 square meters this year, while in the retail market the deliveries of new spaces will be at a historical minimum of the last 14 years, with a level of About 70,000 square meters, according to an analysis by Cushman & Wakefield Echinox real estate consultant.

In the first semester of this year, new commercial spaces with a surface of only 9,000 square meters were delivered in Romania, the first stage of the Prima Shops project in Oradea and the expansion of the commercial gallery owned by Carrefour in Brasov. In the first half of 2016 commercial spaces of 69,000 sqm (Shopping City Timisoara, Mercury Craiova and Satu Mare Shopping Plaza) were delivered to Romania, so the decrease was 87%.

In the second half of the year it is announced the delivery of new retail spaces with a cumulated surface of about 60,000 sqm (Ramnicu Valcea Mall, the expansion of the Galati Shopping City and AFI Palace Cotroceni projects as well as the second phase of the project First Shops in Oradea), so that the total level of deliveries of commercial spaces in 2017 will be around 70,000 square meters. In 2016, new modern retail spaces with an area of 237,000 sqm were delivered in Romania. The stock of modern retail space will reach the level of 3.4 million square meters by the end of 2017.

As far as the industrial sector is concerned, deliveries in the first half of the year have decreased by 64% to 80,000 sq m compared to 175,000 sq m in S1 2016. The share of Bucharest in total deliveries remained constant at about 60% . Unlike the retail sector, the industrial market will recover in the second half of the year, when new spaces with a cumulated area of approximately 400,000 square meters are scheduled to be delivered in all areas of the country. Thus, with deliveries of about 480,000 square meters, 2017 is announced to be the best year for the industrial sector in terms of offering new spaces. As a result of this evolution, the stock of industrial and logistic spaces will exceed the 3 million square meters threshold at the end of the year.

Cristi Moga - Research Consultant C & W Echinox: "The local real estate market traverses a very good period, with a stable rent level, a slight increase, and a better occupancy rate in all segments of activity. For the next few years, we expect a resumption of development activity in the retail segment in Bucharest, where several pre-development stages are several projects in the north and east of the city, while the industrial sector will continue to expand around the cities that benefit Of a developed infrastructure that can attract the workforce from other parts of the country. (rbj/24.03.2017)

CEE Investment Market report: €5.6 billion invested into CEE property in H1 2017

>>>Romania attracted almost 10% of the total volume transacted

By Andra Beltz

At ca. €5.6billion, H1 2017 represented an almost 10% increase over the same period of 2016 and is just short of the highest first half year regional investment volume which was recorded in 2007 (€5.7 billion), according to JLL’s CEE Investment Market report.

We have again recorded continued appetite from investors for product across the entire region.

The first half year breakdown saw the Czech Republic pull in an impressive H1 volume to bring its share to 37%, followed by Poland (29%), Hungary (13%), SEE (other CEE) markets (9%), Romania (9%) and Slovakia (3%).

With a strong H2 pipeline, we expect another record year. Our forecast for the full year could see CEE regional volumes reach ca. €13.0billion which would mean a new record over 2016 which holds the current record at €12.56 billion.

The H1 2017 property investment volume for Romania is estimated at €485 million, a value almost 43% higher than the one registered in the same period of 2016 (€337 million). The number of transactions increased, with the average deal size standing at approximately €25.5 million.

Bucharest accounted for just over 25% of the total investment volume, less than in the same period of 2016, showing that liquidity in secondary cities has improved significantly.

Market volumes were dominated by retail transactions (70%), while industrial, office and hotels accounted for over 13%, 11% and 6% respectively.

The largest transaction registered in first half of 2017 was the acquisition of 50% of Iulius Group’s retail and office portfolio (Iulius Mall Cluj-Napoca, Iulius Mall Iasi, Iulius Mall Timisoara and Iulius Mall Suceava and 3 office buildings) by South African group Atterbury. This is the first acquisition of the fund in Romania, buying shares in one of the largest retail owners in the country.

The most notable office transaction was the acquisition of ART BC 7 by HILI Properties from a company owned by a local entrepreneur for approximately of €30 million.

In industrial, the largest deal in the first half of the year was the acquisition Renault Warehouse Oarja by Globalworth, for approximately €42 million.

The first half of 2017 marked the entry of several new names on the Romanian real estate market, either through the purchase of regional platforms or individual assets. Among them Atterbury, who already invested in the region in Serbia, U City Public from Thailand and Hili Properties.

Market fundamentals remain robust. The macro-economic forecast for Romania is positive. The country was the EU’s top performer in the first quarter of 2017(with GDP growth estimated at 5.7%) and is expected to hold this position throughout the rest of the year. Occupier demand remains high across all market segments and is close to the record high levels registered in 2016. Availability of quality product is increasing and there is still significant yield spread between Romania and Poland or the Czech Republic. (rbj/04.08.2017)

Bucharest office market: Demand exceeded the new offer over 4 times

By rbj

Net take-up of office spaces in Bucharest amounted almost 80,000 sqm in the first half of the year, which means an additional 10,000 jobs, considering that companies usually allocate for each employee 8 square meters.

In total, gross take-up reached in this period of time 185,000 sqm, a small decrease when compared to first 6 month of last year (192,000 sqm).

Development activity remains low, with only 43,000 sqm of new office spaces delivered in Q1 and Q2 of 2017, out of 140,000 sqm that developers have planned to finalise by the end of the year. Total demand exceeded the new offer over 4 times.

The largest project delivered this year was Timpuri Noi Square, developed by Vastint in the South part of Bucharest, with an area of 33,000 sqm.

The current modern stock is of over 2.43 million sqm, and due to continued strong take-up and limited new supply, the H1 vacancy rate decreased to 9%, the lower level after the financial crises.

”Romania continues to be attractive for the investors - existing and new comers – which are planning to expand their businesses in Bucharest and also in the largest cities in the country. In the first half of this year, over 60 companies have leased new spaces for their businesses in Bucharest and other 40 have renewed their leasing contracts. This true of the confidence that investors have in the local market”, comments Marius Șcuta, Head of Office Agency and Tenant Representation JLL Romania.

Depending on the area, a quarter of the leasing contract signed in this period was for the offices located in Floreasca-Barbu Vacarescu area, followed by CBD (Piața Victoriei – Piața Charles de Gaulles) and West and Center-West areas.(rbj/18.07.2017)

Novo Park Businss Park leases additional 2.377 sqm to HP Inc. Romania

By rbj

Novo Park Business Park located in Pipera area and owned by Genesis Property, signs the extent of HP Inc. Romania with additional 2.377 sqm, in building A.

„Leasing the additional 2.377 sqm in building A of Novo Park Business Park to the american company HP Inc Romania proves once again how strong the partnership we started 15 years ago is today. With a total 29.000 sqm leased space, we can say that Novo Park represents an avanpost of the american giant HP. We were, we are and we remain fully dedicated to support our tenants in any development phase of their growing businesses.”, explained Liviu Tudor, the president and founder of Genesis Property. The contract with HP Inc. is valid as of 15th of June and expires on the 1st of November 2024.

Novo Park is one of the biggest business parks in Bucharest, developed by Genesis Property and a refference point in Pipera office area. The park consist of 7 buildings, having a total leasable area of 75.000 sqm superior Class A office spaces. Top international companies have chosen Novo Park due to it’s excellent position (in the northern area of Bucharest) and closeness to Pipera Subway station.

Novo Park hosts international companies such as HP Inc Romania, Hewlett Packard Enterprise, DXC Technologies, Infineon, Yokogawa, Luxoft, Sodexo, Garanti Bank and Unicredit Integrated Business Services Romania, being in the present 100% occupied.

Genesis Property is a Romanian real-estate development company, with over 15 years of experience on the local market. The company has developed Novo Park and West Gate Business Park, totalizing a leasable area of 150.000 sqm Class A. Genesis is also the developed of the first privately owned student campus in Romania, West Gate Studios, that has 925 rentable studios.

The total investments made by Genesis Property (through Genesis Development) in Romania rises over 400 million Euros. (rbj/15.06.2017)

West Gate Business Park, one of the bigest business parks in Bucharest

* Societe Generale European Business Services has leased more than 12 500 m.p. office space in West Gate * West Gate Business Park has a 100% occupancy rate and hosts international companies such as Societe Generale European Business Services, Accenture, Alpha Bank, Carestream, Citi, Dacia-Renault, Ericsson, Siemens, Panasonic and WNS

By rbj

West Gate Business Park, located on the western side of Bucharest and owned by Genesis Development, adds 4000 sqm to the existing lease contract with Societe Generale European Busines Services.

„Taking into consideration that in 2017 the M&A market is estimated to grow with 200.000 sqm additional office space, the fact that a company like Societe Generale chooses to extend it’s office in one of our business parks represents a big plus and confirms our capacity to serve them according to their expectations.” said Liviu Tudor, president and founder of Genesis Development.

The lease contract with Societe Generale European Business Services is valid as of the beginning of 2017. Societe Generale European Business Services uses 12.700 sqm office space, from the total 75.000 sqm rentable space in West Gate Business Park. The lease contract is due to expire at the end of 2021.

„We continue the development of our operations in Romania by extending our offices with an additional 4.000 sqm, within West Gate Business Park, in building H4 and H5. We have decided to extend here, following the quality of the services provided and the support we received for every stage of our company’s development plan.” said Phillipe Garcet, CEO of Societe Generale European Business Services.

Societe Generale European Business Services, owned by the french multinational banking group Societe Generale, serves more than 20 countries (mostly from Europe) for all the major business lines of Societe Generale Group. By optimizing the businesses management and customer care processes, the company wants to become a regional excellent center for Societe Generale Group.

From the beginning, Societe Generale European Business Services has recorded a fast growth rate, setting its target of reaching over 1.000 employees until June 2017. West Gate Business Park is one of the bigest business parks in Bucharest, developed by Genesis Development and located in Militari area, very close to Preciziei subway station. The park has 5 office buildings, having a total leasable area of 75.000 square meters.

Currently, West Gate Business Park has a 100% occupancy rate and hosts international companies such as Societe Generale European Business Services, Accenture, Alpha Bank, Carestream, Citi, Dacia-Renault, Ericsson, Siemens, Panasonic and WNS.

Genesis Development is a real-estate development company, with over 15 years of experience on the local market. The company developed Novo Park and West Gate Business Park, totalizing a leasable area of 150.000 sqm Class A office spaces. Genesis Development is also the develeoper of the first privately owned student campus in Romania, West Gate Studios, that has 925 rentable studios.

The total investment made by Genesis Development in Romania rises over 300 million Euros..

Societe Generale European Business Services was established in 2011 and it’s a service center for Societe Generale Group. The company offers professional quality services for other companies belonging to the same group, in various fields, such as finance / accounting, aquisitions, human resources and IT.(rbj/2017.01.20)

The new demand for office spaces exceeded 400.000 sq m last year

• CBRE Romania has the highest market share on the Bucharest office market

By rbj

More than 200 transactions were closed last year on the office market in Bucharest, according to the latest CBRE Romania reports. The company’s analysis show also that the new demand exceeded in 2016 400.000 sq m, respectively 412.000 sq m, which is the highest level on the local office market. CBRE Romania had in 2016 the highest market share in Bucharest office market, reaching 47% market share on landlord representation, 34% on tenant representation and 38% market share from the total transactions closed by real estate consultants companies in Bucharest.

CBRE reports point that 71% of total office demand in 2016 was for A class offices while new leases counted 69% from TLA. Also, 47,5% from all the office spaces transacted by CBRE were pre-leases, 30.9% renegotiations and 15.9% were new demand or extensions.

“We are happy for all these figures and achievements but the most important thing is that they have echoes on the labor market. Due to the new leases and extensions we closed last year, 1800 new jobs were created in Bucharest”, says Razvan Iorgu, Managing Director, CBRE Romania. Bucharest West – 36% from TLA and Pipera – 25% - were the most wanted areas for companies in 2016, which was also the year of the biggest transaction on the Romanian real estate market, respectively 47500 sq m, where CBRE has represented the tenant.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting.(rbj/2017.01.19)

Opus Land Development, Cosmopolis residential complex’s developer aims to sell 540 new homes this year

By rbj

Opus Land Development, the developer of Cosmopolis, the biggest residential complex located in the north area of Bucharest, aims to sell this year 540 new homes and to continue the infrastructure’s development within the complex.

At this moment, in Cosmopolis are completed 2,300 apartments and villas, counting over 4.500 residents. Due to the stage reached, it may be considered one of the largest communities within a local residential project.

Ahmet Buyukhanli, CEO OPUS LAND DEVELOPMENT said: “Our goal for 2017 is to maintain the sales like the year before with a slight increase and to reach 540 sold units. Last year we sold 470 units, with a total value of 30 million euros and we recorded a sales increase of 10% compared to 2015. This year we will keep investing in general development and infrastructure of Cosmopolis.”

In addition, last year, inside the residential complex was built the strip mall, Cosmopolis Plaza, after an investment of 2.2 million euros. It already has opened stores like the ones dedicated to children, a pharmacy, a dry cleaning, a pet-shop, clothing stores, a supermarket, a cafeteria, an interior design store, a natural food shop, a beauty salon and other spaces for services. The strip mall also has a parking lot. Other stores will open in 2017, the occupancy rate reaching 90% in April. Besides strip mall, the residents of Cosmopolis benefit from a range of facilities that includes a kindergarten, primary school, a park, a private beach by the lake near the buildings, seven outdoor pools, outdoor basketball, football and tennis courts, a restaurant and several children playgrounds. In addition, residents have provided transport to subway stations Aurel Vlaicu and Pipera by minibus lines which run continuously every half hour.

The selling price of a residential unit in Cosmopolis starts at 35,000 euros and it could reach 150,000 euros, excluding custom villas.

Of the total units for sale last year, studios and apartments with two rooms were best received among buyers, with 58% rate, followed by villas (27%) and three-room apartments having 15% rate of total sales.

Cosmopolis is one of the largest real estate investment made in Romania, located in the north-east of Bucharest. Since 2007, the building project was developed gradually turning into a true European city with a community that has over 4,500 residents and has many facilities right inside the complex. At this point, Cosmopolis covers an area of 800,000 sq. m having completed over 2,300 apartments and villas. The investments in Cosmopolis residential complex amounted to approximately 280 million-euro, budget allocated for buildings, infrastructure, commercial and green spaces. Future plans include the construction of at least 7,000 new homes and the continued development of infrastructure and facilities offered.

Cosmopolis manager and exclusive agent is Coldwell Banker Romania, one of the largest real estate consulting companies in Romania after the latest financial official results. This is the company with the strongest activity in the residential segment, the manager and agent for over 15 exclusive residential projects in Bucharest and around the country. The company sold in 2016, directly from the developer, more than 1,500 new housing only in Bucharest.(rbj/2017/01.19)

Contact
The Romanian Business Journal
Constantin Radut
Editor in Chief
031726 Bucharest, Romania

+40 725 511 887 office.rbjournal@gmail.com www.rbj.ucoz.ro
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