The leasing activity on the industrial and logistics property market registered another strong quarter in Q2 2023, with a gross take-up of over 215,000 sq. m, bringing the transactional volume for the first half of the year at 547,000 sq. m, corresponding to a slight growth when compared with H1 2022. The new demand continues to be the main driver of the leasing market, with a share of 90% out of the Q2 2023 gross take-up and 72% overall in H1 2023. Moreover, the pre-lease agreements signed in H1 2023 amounted to over 40% of the net take-up, a demand which will be mainly accommodated in the projects planned to be delivered during 2024.
The largest transaction closed in Q2 2023 pertained to a pre-lease of 47,000 sq. m signed by Intercars within VGP Park Brasov, followed by a 25,000 sq. m expansion of the existing space contracted by Maersk – IB Cargo (the freight forwarding and logistics provider which operates the regional IKEA distribution center) in CTPark Bucharest West and by a new lease transaction of 12,600 sq. m concluded by EKR Elektrokontakt within Mures City Logistics.
The total modern stock reached 6.77 million sq. m at the end of June, as developers delivered new projects with a total leasable area of 202,000 sq. m across the country in the H1 2023, with 104,000 sq. m completed in Q2. The total development activity in H1 2023 slowed down when compared with H1 2022, when it accounted for 300,000 sq. m, as we estimate the new supply for the rest of the year at around 250,000 sq. m. The overall vacancy rate slightly decreased at a level of 4.8%, while a further drop is expected by the end of the year as a result of a more cautious approach taken by developers.
PRICING: Rents still under pressure
The prime rents in Bucharest and in the main industrial and logistics destinations in Romania stood at a level between €4.25 – €4.50 / sq. m / month in Q2 2023, with higher benchmarks applied to new projects located near Bucharest. Given the limited supply and the sustained ongoing demand, asking rents are expected to maintain this current upward trend in H2 and also in the first half of 2024.
