In Q3 2023, the total leasing activity in Romania slowed down compared with the previous quarter, with the gross take-up totaling around 169,000 sq. m, corresponding to a 20% q-o-q decrease, while Bucharest saw a sharper decline of 26%. As a result, the YTD transactional volume was 716,000 sq. m, resulting in a 22% y-o-y drop. The new demand continues to be the main driver of the leasing market, with a share of over 70% of the gross take-up registered in Q3 2023 and also in the first 9 months of 2023.
The largest transaction closed in Q3 pertained to a 22,200 sq. m renewal signed by Gebruder Weiss within P3 Bucharest A1, followed by a 20,700 sq. m new lease contract signed by SFC Solutions Automotive Romania (WDP acquired the industrial park operated by the automotive company in Mioveni in a sale and lease back transaction) and by a pre-lease of 12,500 sq. m concluded by Huennebeck within ELI Park Ploiesti.
The YTD new supply consists of 252,000 sq.m across the country, with only 70,000 sq. m completed in Q3, bringing the total modern industrial & logistics stock in Romania to 6.84 million sq.m at the end of September. The total yearly development activity in 2023 will be lower compared with 2022 (821,000 sq. m), as the Q4 new supply is estimated at around 183,000 sq. m. The overall national vacancy rate increased to a level of 5.7%, as a result of the high number of pre-lease agreements signed during 2023, a demand that will be mainly accommodated in projects planned to be delivered in 2024. Moreover, the construction of new projects on a speculative basis continues to slow down, as 60% of the 2024 pipeline of 372,000 sq m is already pre-leased.
The prime headline rents in Bucharest and in the main industrial & logistics destinations in Romania slightly increased at levels ranging between €4.25 – €4.65 / sq. m / month in Q3 2023, an upward trend which is expected to continue going forward, albeit at a slower pace, given the limited pipeline of speculative projects. As the economic uncertainty continues to affect the tenants’ expansion plans, developers may adopt more cautious approaches when it comes to commencing new investments in industrial & logistic facilities on the short term at least.
