Bucharest City Report Q1 2014

Bucharest City Report

Q1 2014 / T1 2014

R Q1

Bucharest City Report Q1 2014

COPYRIGHT JONES LANG LASALLE IP, INC. 2014. All Rights Reserved 2

Economy/Investment

Economic Climate

After a strong 2013, in which the Romanian economy

outperformed expectations with a GDP growth of 3.5%, the

country is likely to continue its ascendant trend in 2014, when

GDP is projected to increase by 3.3%, according to EIU. In the

first three months of 2014, growth was driven not only by the

industrial sector, as was the case in the previous quarters, but

also by retail sales that increased by 8.3% y-o-y (12.3% in the

non-food category). Consequently, in January and February,

exports were up by 9.2% and imports up by 9.4% when

compared to the same period in 2013. However, the

construction sector continued to struggle mainly because of the

decrease in infrastructure works. According to the latest EIU

reports GDP growth is expected to accelerate in 2015 to 3.8%,

with all sectors of the economy having a positive contribution.

GDP Growth (%) / Cretere PIB (%)

Source/Surs: INS & EIU, April 2014

Annual average HICP inflation rate (April 2013 March 2014)

decreased to a historic low level of 2.3%. As a result, the

monetary policy rate of the National Bank of Romania reached

yet another historic low, 3.5% starting from February 2014, a

move aimed at further encouraging the credit market, which

showed positive signs since the beginning of the year, and at

supporting the current economic growth. The exchange rate

remained stable in Q1 2014, oscillating between 4.43 and 4.54

Ron for 1.

Government debt remains low at a level below 39% of GDP,

the fourth lowest in the European Union, while the targeted

government deficit for 2014 is 2.4% of GDP.

The recent events in neighbouring Ukraine have had little

impact on the Romanian economy in Q1 and we expect this will

not change in the following months, unless there will be a major

escalation of the conflict.

Investment Climate

The property investment volume recorded in Q1 2014 is

estimated at a record 337 million, higher than the total volume

in 2013. The largest transaction was the sale of the BOB and

BOC office buildings together with 446 apartments and 25 retail

spaces in an adjacent residential project - Upground Towers,

for 210 million by RREEF to Globalworth. Globalworth was

also the purchaser of Tower Center International, an office

tower in the CBD of Bucharest, for 58 million. The industrial

segment is once again starting to attract the interest of

investors. The acquisition of the 17,000 m Innovation Logistic

Park by Secure Property Development & Investment was the

first significant industrial transaction in Bucharest since the

beginning of 2011.

In Q1, transactional activity in Romania was focused on the

office sector which accounted for 80% of the total volume.

Source/Surs: JLL

The start of 2014 has consistently seen more evidence that

Romania is back on the map of foreign investors. Transaction

activity was dominated by (re)structuring tied deals, but with

several quality assets currently on the market, it is expected

that transaction volumes will grow markedly in 2014. Moreover,

a higher degree of diversity on the buy side can be expected,

which is important for the perceived exit liquidity among

investors. High investor demand is also facilitated by an

increasing appetite of banks to provide debt financing. Even if

conditions offered in Romania still reflect the perceived country

risks, the simple fact that the number of banks offering real

estate financing has increased is an important improvement

that will facilitate more liquidity.

Due to the strong economic growth and the increasing interest

shown by investors towards the Romanian market and the

advantages that it offers (significantly higher yield spread), we

have strong reason to expect that 2014 will set new

benchmarks for the post-recession domestic investment

market.

-2

-1

0

1

2

3

4

2010 2011 2012 2013 2014F 2015F

Yields /

Randamente

Office /

Birouri

Shopping

Centers /

Centre

Comerciale

Industrial /

Industrial

Q1/T1 2014 8.25% 8.25% 10.0-10.5%



Economie / Investiii

Mediul economic

Dup un an 2013 n care economia Romniei a performat

peste ateptri i a nregistrat o cretere a PIB de 3,5%, se

estimeaz c trendul ascendent va continua i n 2014 cnd,

potrivit EIU(The Economist Intelligence Unit), creterea PIB se

va situa la un nivel asemntor 3,3%. n primele trei luni ale

lui 2014, creterea s-a datorat nu doar industriei, cum a fost

cazul n trimestrele anterioare, ci i comerului cu amnuntul,

care a avansat cu 8,3% (12,3% la vnzrile de produse

nealimentare) comparativ cu perioada similar din 2013. n

consecin, n ianuarie i februarie 2014 att exporturile ct i

importurile au crescut cu 9,2% respectiv 9,4%, fa de aceeai

perioad din 2013. Sectorul construciilor a continuat s scad,

n principal datorit reducerii numrului de lucrri de

infrastructur. Conform ultimelor rapoarte ale EIU, PIB-ul

Romniei va accelera puternic la 3,8% n 2015.

Rata anual a inflaiei (HICP) a sczut n perioada aprilie 2013

martie 2014 la un nivel record de 2,3%. Banca Naional a

Romniei (BNR) a continuat s ajusteze rata dobnzii de

politic monetar, care a ajuns din februarie la un nou minim

istoric de 3.5%. Aceast micare urmrete stimularea creterii

economice i ncurajarea creditrii, care a dat deja semnale

pozitive de la nceputul anului. Rata de schimb valutar a fost

relativ stabil n primul trimestru din 2014, cursul oscilnd ntre

4,45 i 4,53 Ron pentru un Euro.

Datoria guvernamental de sub 39% din PIB este a patra cea

mai redus la nivelul Uniunii Europene, iar noua int de deficit

bugetar pentru 2014 este de 2,4% din PIB.

Evenimentele recente din Ucraina au avut un impact

nesemnificativ asupra economiei Romniei n Q1, situaie ce

nu ne ateptm s se schimbe dect n cazul unei escaladri

serioase a conflictului.

Monetary Policy Rate of NBR/ Rata dobnzii de politic monetar a BNR

Source/Surs: BNR

Mediul de investiii

Volumul tranzaciilor imobiliare nregistrat n T1 2014 este

estimat la 337 milioane de Euro, mai mare dect ntreaga

activitate investiional din anul 2013. Cea mai mare tranzacie

a fost achiziia de ctre Globalworth de la RREEF a cldirilor

de birouri BOB i BOC, dar i a 446 de apartamente i 25 de

spaii comerciale n proiectului rezidenial alturat, Upground

Towers, pentru 210 milioane de Euro. Globalworth a fost de

asemenea cumprtorul Tower Center International, un turn de

birouri n CBD-ul din Bucureti pentru suma de 58 de milioane

de Euro. Piaa spaiilor industriale ncepe s atrag din ce n ce

mai mult interesul investitorilor. Achiziia Innovation Logistic

Park de 17.000 m de ctre Secure Property Development &

Investment a fost prima tranzacie considerabil pe acest

segment de la nceputul anului 2011. Tranzaciile din primele

trei luni ale anului s-au axat pe cldiri de birouri, care au

reprezentat 80% din ntregul volum.

nceputul lui 2014 a artat din ce n ce mai multe dovezi c

Romnia s-a ntors n atenia marilor investitori. Activitatea

nregistrat n primul trimestru a fost dominat de tranzacii

derivate din restructurri, dar, avnd n vedere c pe pia sunt

disponibile cldiri de calitate, ne ateptm ca volumele s

creasc puternic n acest an. Mai mult, vedem un numr i o

diversitate mai mare de cumprtori, un lucru important pentru

felul n care investitorii percep lichiditatea la momentul vnzrii.

Cerea n cretere este alimentat de asemenea i de apetitul

ceva mai sporit al bncilor pentru a oferi finanare. Dei

condiiile oferite n Romnia reflect nc percepia asupra

riscului de ar, simplul fapt c numrul bncilor dispuse s

acorde finanri imobiliare s-a ameliorat reprezint o un semnal

pozitiv ce va facilita o cretere a lichiditii.

Datorit creterii economice puternice i interesului

investitorilor pentru piaa imobiliar din Romnia si avantajele

pe care aceasta le ofer (yield-uri mai bune) avem motive

ntemeiate s credem c 2014 va fi un an de referin pentru

piaa imobiliar de dup recesiune.

Annual Inflation Rate/Rata anual a inflaiei

Source/Surs: Eurostat

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2008 2009 2010 2011 2012 2013 Q12014

0%

2%

4%

6%

8%

10%

2008 2009 2010 2011 2012 2013 Q1 2014



Office Market

Supply

Two significant office buildings were completed in Q1 2014:

Hermes Business Campus by Atenor Group and the extension

of Metropolis Center by Soravia, which together added 23,300

m2 of A class offices to the market. The modern office stock in

Bucharest is currently around 2.10 million m2. For the rest of

the year, the pipeline is estimated at roughly another 120,000

m2. Four large projects represent over 70% of the total

remaining pipeline to be delivered in 2014 (AFI Park 2, City

Offices, Green Gate and Green Court).

The most active sub-markets, considering the projects planned

for 2014 and 2015, are Floreasca Barbu Vacarescu, Center

West, Dimitrie Pompeiu and South. The Center West market

in particular is rapidly emerging as a key office location of the

city, despite its current smaller size. The area enjoys a number

of advantages such as the excellent accessibility by car and

public transport, proximity to the Polytechnic University, the

main student campuses in the city, and some of the most

densely populated residential neighbourhoods. It has mainly

attracted the attention of IT companies and the vacancy rates

here are among the lowest in the city.

The overall vacancy rate in Bucharest is estimated at 14.7%,

which represents a quarter-on-quarter increase of almost 30

basis points. This increase is due to the new supply and is

expected to continue in the next quarter, given the large office

surface planned to be delivered. Vacancy rates continue to be

uneven between the sub-markets of the city, which is reflected

in the evolution of the rental levels. While in Baneasa and

Pipera Nord vacancy is around 35%, in the Center West and

West, vacancy is below 5%.

Office Stock in Bucharest (Class A&B) and Vacancy Rate / Stoc spaii

birouri n Bucureti (clase A&B) i rata de neocupare

Source/Surs: JLL

Demand

In Q1 2014, gross take-up reached almost 61,000 m2, a similar

value to the one recorded in the same period of 2013. New

demand (including new leases, expansions and pre-leases)

accounted for 48,700 m2 of the quarterly leasing activity and

12,200 m2 were renegotiations. The largest transactions in Q1

were the pre-lease of Vodafone in Bucharest One (16,000 m2),

the relocation of Intesa Bank in ART BC 6 (3,500 m2) and the

pre-lease of Schneider Electric in Green Court (3,100 m2). By

geography, Floreasca Barbu Vacarescu was the most active

sub-market with over 43% of the total take-up, mainly due to

the preleases of Vodafone and Schneider Electric, followed by

the CBD and Center West. By industry, IT&C and Telecom

companies were the most active, together generating more

than 50% of the total leasing activity, with professional services

and manufacturing & industrial as runners-up.

Rents

Prime headline rents remained unchanged at 18.5 m2/month

during Q1 2014. Over the last quarter, incentive packages

remained consistent, with landlords usually offering both rent

free periods and fit-out contributions. Incentive packages vary

in value according to the terms of the requirements and

become especially attractive for deals larger than 2-3,000 m2.

Bucharest continues to be a tenants market, which we estimate

will characterise the office sector for the next quarter as well.

Forecast

The supply pipeline for 2015 is expected to be around 110,000

m2. Take-up is forecasted to increase from the level of the

previous years and the overall vacancy rate should start to

decrease towards the end of 2014 - beginning of 2015, after a

temporary rise next quarter. We are of the opinion that prime

rental levels will remain unchanged for the rest of 2014.

Prime Office Headline Rent Evolution / Evoluia chiriei contractuale

prime pentru spaii de birouri

Source/ Surs : JLL

00%

05%

10%

15%

20%

0.00

500.00

1000.00

1500.00

2000.00

2500.00

2008 2009 2010 2011 2012 2013 2014Q1

Tho

usan

ds m

Total Stock (left) Vacancy Rate (right)

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014F

Eur

o/m

2 /m

onth



Piaa spaiilor de birouri

Oferta

Dou cldiri de birouri importante au fost livrate n primele trei

luni ale lui 2014, Hermes Business Campus (Atenor Group) i

extensia Metropolis Center (Soravia), care mpreun au

adugat 23,300 m de spaiu clas A la oferta total iniial.

Stocul modern de spaii de birouri din Bucureti a ajuns n

prezent la 2,10 milioane m. Pentru restul anului estimm c

vor fi finalizai nc 120.000 m din care patru proiecte majore

reprezint 70% (AFI Park 2, City Office, Green Gate i Green

Court).

Annual Office Completions & Pipeline (m2) /

Spaii noi de birouri finalizate anual & proiecte n construcie (m2)

Source/Surs: JLL

Cele mai active sub-piee avnd n vedere proiectele ce vor fi

livrate n 2014 i 2015 sunt Floreasca Barbu Vcrescu,

Centru Vest, Dimitrie Pompeiu i Sud. Piaa Centru Vest, n

mod particular, devine rapid o zon cheie pentru piaa de

birouri din Bucureti n ciuda dimensiunii nc reduse. Zona se

bucur de mai multe avantaje printre care accesibilitatea

excelent prin intermediul transportului public sau cu maina

personal, apropierea de Universitatea Politehnic, de cele mai

mari campusuri universitare din ora, dar i de unele dintre

cele mai dens populate cartiere rezideniale bucuretene. Zona

a atras n principal chiriai din domeniul IT, iar rata medie de

neocupare aici este una din cele mai mici din ora.

Rata medie de neocupare n Bucureti este estimat la 14,7%,

ceea ce reprezint o uoar cretere, de 0,3%, fa de

trimestrul anterior. Ne ateptm ca trendul ascendent s

continue i n trimestrul 2 datorit cldirilor noi ce urmeaz a fi

livrate. Rata de neocupare este foarte diferit ntre sub-piee,

pornind de la sub 5% n Centru Vest i Vest i ajungnd la n

jur de 35% n Bneasa i Pipera Nord, ceea ce se reflect n

evoluia chiriilor.

Cererea

n T1 2014, preluarea total de spaii de birouri a fost de

aproximativ 61.000 m2, o valoare similar cu cea nregistrat in

aceeai perioad din 2013. Cererea nou de spaii (incluznd

contractele noi, extinderile i pre-nchirierile) a fost de peste

48.700 m2, n vreme ce renegocierile au reprezentat 12.200

m2. Cele mai mari tranzacii din primele trei luni ale anului au

fost pre-nchirierea Vodafone n Bucharest One (16.000 m2),

relocarea Intesa Bank n ART BC 6 (3,500 m) i pre-

nchirierea Schneider Electric in Green Court (3.100 m2). n

funcie de zona geografic, Floreasca Barbu Vcrescu a

fost cea mai dinamic sub-pia, cu peste 43% din totalul

prelurilor, n mare parte datorit pre-nchirierilor Vodafone i

Schneider Electric, urmat de CBD i Centru Vest. n funcie

de domeniul de activitate, companiile din sectorul IT&C i

telecom au fost de departe cele mai active, fiind implicate n

mai mult de 50% din volumul tranzaciilor, urmate de cele din

servicii i industrie.

Chirii

Chiriile contractuale prime pentru spaii de birouri au rmas

neschimbate n trimestrul 1 din 2014, fiind cotate la 18,5

Euro/m2/lun. Stimulentele financiare au continuat s fie

consistente, proprietarii oferind att luni libere de plat a chiriei,

ct i contribuii pentru amenajarea spaiilor. Pachetele de

stimulente financiare variaz n funcie de tipul de cerere i

devin importante n special pentru suprafee mai mari de 2.000

3.000 m2. Piaa de birouri din Bucureti a continuat s fie una

dominat de chiriai, ceea ce ne ateptm s rmn valabil i

pentru urmtorul trimestru.

Previziuni

Oferta de noi spaii de birouri previzionate a fi finalizate n 2015

este estimat n jurul a 110,000 m. Ne ateptm ca preluarea

total de spaii s creasc fa de nivelul anilor anteriori, iar

rata medie de neocupare s nceap s scad ctre finalul

anului 2014 i nceputul lui 2015, dup ce va nregistra o

uoar cretere n trimestrul urmtor. Suntem de prere c

chiriile prime vor rmne neschimbate pe parcursul lui 2014.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2008 2009 2010 2011 2012 2013 2014F



Retail Market

Supply

The modern retail stock remained unchanged at 1.66 million m2

in Romania as no retail projects were inaugurated in Q1 2014.

The previous quarter (Q4 2013) was rich in supply, when

95,000 m2 were added to the market. The stock in Bucharest is

estimated at almost 890,000 m2.

Two new shopping centers are planned to be delivered by the

end of the year, both developed by the South-African

investment fund, NEPI: Vulcan Value Center (35,000 m2) in the

south-west of Bucharest and Shopping City Targu Jiu (27,000

m2) in Targu Jiu. Therefore, 2014 retail supply in Romania will

be at the lowest level since 2005.

Modern Retail Stock in Bucharest & Pipeline (m2) /

Stocul de spaii comerciale moderne n Bucureti & proiecte (m2)

Source/Surs: JLL

Demand

According to the National Institute of Statistics, after a weak

performance in 2013 (+0.4%), retail sales registered a 8.3% y-

o-y growth in Q1 2014. Non-food sales increased even more

sharply, by an impressive 12.3%. We expect this trend will

continue, supported by the strong economic growth, the revival

of the credit market and increasing consumer confidence. The

recent performance is likely to have a positive influence on

retailers expansion plans.

Given the lack of new projects, those who consider opening

new units are mainly looking at existing shopping centers with

proven good performance. The gap between demand for

prime and secondary stock continues to be significant.

International retailers are assessing the possibility of entering

the Romanian market or, taking over the local operations of

franchise partners, encouraged by the growing retail sales.

Jysk, the Danish retail chain specialized in selling furniture,

decorations and mattresses, is opening a new concept store in

April in the Coloseum Retail Gallery, after taking over their

Romanian stores, formerly operated by a franchisee.

Carrefour announced the new concept that they will introduce

in Romania, the hard discounter Superco, focus on fresh

products, with surface of 1,000 to 2,000 m2.

The Romanian DIY market has been very eventful during Q1

2014. Kingfisher rebranded two of the fifteen stores they

acquired last year into Brico Depot. The local operation of

Praktiker comprising 27 units was taken over by Turkish owned

Search Chemicals, but will continue to operate under the same

brand. Baumax announced it will exit Romania, either by selling

or by closing down their stores.

Rents

Rental levels for prime shopping centres grew to 60-70

m2/month, showing the first signs of recovery of the Bucharest

retail market. The highest rents are achieved in Baneasa

Shopping City and AFI Palace Cotroceni, which are considered

the two most dominant retail schemes in Romania. Rental

levels for prime high street units remained at 55-65 m2/month.

Prime Shopping Center Rents in CEE capitals /

Nivelul chiriei prime n centre comerciale n capitalele din CEE

Source/Surs: JLL

Forecast

The pipeline in Bucharest for 2015 is likely to increase to up to

150,000 m2, in areas that are currently lacking major shopping

centers, and to 45,000 m2 in Brasov, one of the largest cities in

the country that does not yet have a dominant retail scheme.

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2007 2008 2009 2010 2011 2012 2013 2014F

0

20

40

60

80

100

120

Budapest Bucharest Prague Warsaw

Eur

o/m

2/m

onth



Piaa spaiilor comerciale

Oferta

Stocul de spaii comerciale moderne din Romnia a rmas

neschimbat la aproape 1,66 milioane de m2 dup ce nici un

centru comercial nu a fost inaugurat n primul trimestru din

2014. Trimestrul patru din 2013 a fost bogat n livrri, cu

95.000 m2 finalizai. Stocul de spaii comerciale moderne din

Bucureti este de peste 890.000 m2.

Dou noi centre comerciale urmeaz a fi inaugurate pn la

finalul anului, ambele dezvoltate de ctre fondul de investiii

sud-african NEPI: Vulcan Value Center (35.000 m2) n partea

de sud-vest a Bucuretiului i Shopping City Trgu Jiu (27.000

m2) n Trgu Jiu. Prin urmare, oferta ce va fi livrat n 2014 n

Romnia va atinge cel mai sczut nivel de dup 2005.

Cererea

Conform Institutului Naional de Statistic, dup ce n 2013

cifra de afaceri n comerul cu amnuntul a nregistrat o

cretere modest de doar 0,4%, aceasta a crescut puternic n

primul trimestru din 2014, cu 8,3% n comparaie cu aceeai

perioad anul trecut. Vnzarea produselor non-alimentare a

urcat chiar mai mult, cu 12,3%. Ne ateptm ca acest trend s

continue, susinut de creterea economic puternic, de

resuscitarea pieei creditelor i de ncrederea din ce n ce mai

mare a consumatorilor. Performanele recente vor avea

probabil o influen pozitiv asupra planurilor de expansiune

ale retailerilor.

Avnd n vedere numrul redus de proiecte noi, retailerii

interesai s deschid magazine noi analizeaz n special

centrele comerciale performante deja existente. Distana dintre

cererea pentru centrele comerciale prime i cele secundare

continu s fie semnificativ.

Mai muli retaileri internaionali evalueaz posibilitatea intrrii

pe piaa din Romnia sau preluarea reelelor locale de

magazine operate de ctre francizori, ncurajai de creterea

vnzrilor. Jysk, lanul de retail danez, specializat n comerul

cu mobil i decoraiuni, va deschide n aprilie un nou concept

store in Coloseum Retail Gallery, dup ce au preluat reeaua

de magazine din ar.

Carrefour a anunat noul concept hard discount pe care l vor

introduce n Romnia, Superco, ce se va axa pe produse

proaspete i va opera pe suprafee de 1.000 2.000 m2.

Piaa de DIY a fost extrem de bogat n evenimente n primul

trimestru din 2014. Kingfisher a finalizat conversia n Brico

Depot a dou dintre cele 15 uniti pe care le-a achiziionat

anul trecut. Operaiunile locale ale Praktiker, ce constau n 27

de magazine, au fost preluate de ctre o companie cu capital

turcesc, Search Chemicals, dar vor continua s funcioneze

sub acelai brand. Baumax i-a anunat intenia de a iei din

Romnia, fie prin vnzarea magazinelor fie prin nchiderea

acestora.

Chirii

Nivelul chiriilor prime din centrele comerciale a crescut la 60-70

Euro/m2/lun, acesta fiind unul din primele semne ale redresrii

pieei de retail din Bucureti. Cele mai mari chirii sunt obinute

n AFI Palace Cotroceni i Bneasa Shopping City, considerate

a fi centrele comerciale dominante din Romnia. Nivelul

chiriilor prime pentru spaiile comerciale stradale s-a meninut

la 55-65 Euro/m2/lun.

Previziuni

Volumul livrrilor din 2015 ar putea ajunge pn la 150,000 m2

n Bucureti, n special n zonele n care nu exist centre

comerciale importante, i la 45,000 m2 n Braov, unul din cele

mai mari orae din ar care nu are un mall dominant.

Prime Shopping Center Rent Evolution /

Evoluia chiriei prime n centrele comerciale

Source/Surs: JLL

80

100

70 65 65

60

90

115

85 80

70 70

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70 65 65

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Q42008

Q42009

Q42010

Q42011

Q42012

Q42013

Q12014

Eur

o/m

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onth

Min Max



Industrial Market

Supply

Two industrial facilities were officially opened in Q1 2014 in

Romania. In March 2014, Lear Corporation inaugurated an

automotive seating plant of 12,000 m in Solo Industrial Park,

located in Letcani, near Iasi and VGP expanded their industrial

park in Timisoara by 7,200 m. In Q4 2013, JLL reported the

completion of a 11,000 m production unit built in Ploiesti West

Park for Coficab and of another 10,000 m delivered by VGP in

Timisoara that are now fully occupied.

Several projects are expected to be finalized by the end of the

year. In May, Bosch will inaugurate a 38,000 m automotive

electronics production facility and research center in Tetarom

III, in Jucu, near Cluj-Napoca. The Cluj County Council, owner

of the Tetarom industrial parks, has also started the

development of Tetarom IV on an 80 hectare plot in Feleacu.

Another 25,000 m are under construction in Ploiesti West Park

for a Belgian production company. TRW Automotive Holdings

Corp. is planning to open a 4,000 m plant in Roman, where

they will manufacture airbags for cars. In Timisoara, VGP is

planning to extend their project by further 10,000 m.

As of Q1 2014, the modern industrial stock is estimated at

approximately 1.8 million m, with more than 1 million m in the

industrial hubs in and around Bucharest.

Prime Rents for Multi-let / Light Industrial in CEE Capitals/

Nivelul chiriei prime n spaii industriale n capitalele din CEE

Source/Surs: JLL

Demand

In Q1 2014, gross take-up in Romania totaled approximately

48,000 m out of which almost half was net take-up, while the

other half was made of renegotiations and renewals. Activity

was recorded in: Bucharest, Deva, Arad, Ploiesti and

Timisoara. In the first three months of the year gross take-up in

Bucharest is estimated at almost 19,000 m, 40% of the entire

demand in Q1 in Romania. The largest transaction in Q1 was

the renewal of Carrefour (20,700 m) in Deva Logistic Center.

Rents

Rents for prime distribution facilities are estimated at 3.6 to

4.0 m2/month. Rents for prime light industrial facilities are

quoted between 3.5 and 4.25 m2/month. Larger distribution

units (exceeding 20,000 m2) record rents of about 3.5

m2/month. However, incentive packages continued to be

significant, especially for large surfaces and long term leases.

Forecast

The automotive sector has become the most important branch

of Romanian industry. New production facilities will continue to

open, especially in the western part of the country due to its

obvious advantages (proximity to Central and Western Europe

Romanias main export market, present and planned

highways and well prepared labour force). Due to the

forecasted increase in retail sales, we expect that 3PL

companies will soon be in search of spaces to develop.

Given the current vacancy rate in Bucharest, situated at

between 13 and 14.5% and the restrictive access to credit,

most future industrial developments will be built-to-suit.

Prime Industrial Rents and Yields /

Chirii spaii industriale i randamente

Source/Surs: JLL

20

30

40

50

60

70

Warsaw Prague Bucharest Budapest

Eur

o/m

2 /ye

ar

8%

9%

9%

10%

10%

11%

11%

45

46

47

48

49

50

51

52

53

54

55

Q42008

Q42009

Q42010

Q42011

Q42012

Q42013

Q12014

Annual rents Yields



Piaa spaiilor industriale

Oferta

Dou proiecte industriale importante au fost inaugurate oficial

n trimestrul 1 din 2014 n Romnia. n martie 2014, Lear

Corporation a deschis o unitate de producie de scaune

destinate industriei auto, de 12.000 de m2 n Solo Industrial

Park din Lecani, n apropiere de Iai, iar VGP si-a extins

parcul din Timioara cu 7.200 m2. JLL a raportat de asemenea

n trimestrul 4 din 2013 finalizarea construciei depozitului de

11.000 m2 dezvoltat n Ploieti West Park pentru Coficab i

depozitului de 10.000 m2 inaugurat de VGP n Timioara, acum

ocupat integral.

Alte cteva proiecte sunt anunate a fi finalizate pn la finalul

anului. Bosch va inaugura n mai o unitate de producie i un

centru de cercetare n Tetarom III n Jucu, lng Cluj-Napoca.

Consiliul Judeean Cluj, proprietarul parcurilor industriale

Tetarom, a nceput de asemenea lucrrile la Tetarom IV pe un

teren de 80 de hectare n Feleacu. Ali 25.000 de m2 vor fi

livrai n Ploieti West Park pentru o companie belgiana. TRW

Automotive Holdings Corp. plnuiete sa inaugureze o unitate

de producie de airbaguri destinate autovehiculelor, de 4.000

m2 n Roman. n Timioara, VGP plnuiete extinderea

proiectului pe care l deine cu nc 10.000 m2.

La finalul primului trimestru din 2013, stocul de spaii industriale

moderne era estimat la aproximativ 1,8 milioane m, cu mai

mult de 1 milion m localizai n proiectele din Bucureti i

zonele din imediata vecintate.

Industrial Take-Up Activity in Romania in 2013 /

Activitatea de nchiriere n Romnia n 2013

Source/Surs: JLL

Cererea

n primul trimestru din 2014, estimm c n Romnia s-au

nchiriat aproximativ 48.000 m2 de spaii industriale. Mai mult

de jumtate din totalul nchirierilor a fost reprezentat de cerea

nou, cu restul fiind reprezentat de renegocieri i nnoiri.

Cererea s-a concretizat n contracte semnate n Bucureti,

Deva, Arad, Ploieti i Timioara. n Bucureti, n aceeai

perioad, suprafaa total de spaii industriale nchiriate a fost

de aproximativ 19.000 m2, 40% din ntreaga suprafa

nchiriat la nivel de ar. Cea mai mare tranzacie din primele

trei luni ale anului a fost nnoirea contractului Carrefour (20,700

m2) n Deva Logistic Center.

Chirii

Chiriile spaiilor de logistic prime sunt cuprinse ntre 3,6-4,0

Euro/m2/lun. Chiriile spaiilor dedicate industriei uoare sunt la

nivelul de 3,5-4,25 Euro/m2/lun. n cazul spaiilor industriale

de mari dimensiuni, de peste 20.000 m2, chiriile sunt mai mici,

n jurul a 3,5 Euro/m2/lun. Volumul stimulentelor financiare a

continuat s fie semnificativ, n special pentru suprafee mari i

durate lungi.

Previziuni

Industria auto a devenit cel mai important sector al industriei

romneti. Noi uniti de producie vor continua s se

deschid, n special in partea de vest a rii datorit avantajelor

pe care le are aceast zon i anume apropierea de Europa

Central si de Vest cea mai important pia de export a

Romniei, infrastructura existent i n construcie i

disponibilitatea unei fore de munc bine pregtit. Ne

ateptm ca, datorit previziunilor pozitive n ceea ce privete

comerului cu amnuntul, companiile 3PL vor deveni din ce n

ce mai interesate de spaii in care s se dezvolte. Din cauza

ratei de neocupare de 13-14.5% n Bucureti i accesului

anevoios la credite, cele mai multe proiecte viitoare vor fi

construite doar n baza unor pre-contracte.

Modern Industrial Stock in Bucharest by Location /

Spaii industiale moderne n Bucureti dup locaie

Source/Surs: JLL

Deva, 43%

Bucharest, 39%

Arad, 13%

Timisoara; 5%

WestBucharestNorthBucharestNorth-westBucharestSouthBucharestNorth-eastBucharest



Market Practice

Office market

Lease length: 3-5 years

Payment terms: Rents denominated in Euro, but paid in Ron

Frequency: Monthly or quarterly in advance

Deposit: 3 months

Indexation: Annually, in general Euro CPI

Rent reviews: Optional, not yet a practice

Agency fees: 15-25% from the yearly rent, excluding any incentives offered by

landlord to tenants

Retail market (shopping centers)

Lease length: 5 years, 10-15 years for the larger anchors

Rent: fixed and/or turnover rent

Payment terms: Rents denominated in Euro but paid in Ron

Frequency: Monthly or quarterly in advance

Deposit: 3 months


Rent reviews: rare

Landlords fit-out contribution: available only for larger anchor tenants

Agency fees: 12-15% from the yearly rent, excluding any incentives offered by

landlord to tenants

Industrial market

Lease length: 3-5 years for logistics; 5-7 years for production facilities

Rents: industrial area plus additional handling services

Payment terms: Rents denominated in Euro but paid in Ron

Frequency: Monthly in advance

Deposit: 3 months for logistics; 6 months for production facilities


Rent reviews: rare

Fit-out: on tenants cost

Agency fees: 12-20% from the annual rent

Piaa spaiilor de birouri

Perioad de nchiriere: 3-5 ani

Metode de plat: chiriile exprimate n Euro, dar pltite n moneda local, Ron

Frecvena de plat: n avans, lunar sau trimestrial

Garanie: echivalentul a 3 luni de chirie

Indexare: anual, n general cu inflaia din Zona Euro

Renegocierea chiriei: opional, nu este nc o procedur comun

Comisionul de agenie: 15-25% din chiria anual (nu sunt considerate facilitile

financiare, lunile libere de chirie)

Piaa spaiilor comerciale (centre comerciale)

Perioad de nchiriere: 5 ani, 10-15 ani pentru chiriaii tip ancor

Chiria: fix i/sau chirie n funcie de cifra de afaceri

Metode de plat: chiriile exprimate n Euro, dar pltite n moneda local, Ron

Frecvena de plat: n avans, lunar sau trimestrial

Garanie: echivalentul a 3 luni de chirie

Indexare: anual, de obicei cu inflaia din Zona Euro

Renegocierea chiriei: rar

Contribuia proprietarului pentru amenajarea spaiului: acordat doar chiriailor

care ocup spaii mari

Comisionul de agenie: 12-15% din chiria anual (nu sunt considerate facilitile

financiare, lunile libere de chirie)

Piaa spaiilor logistice

Perioad de nchiriere: 3-5 ani pentru spaii logistice; 5-7 ani pentru spaii de

producie

Chiria: pentru spaiile industriale plus serviciile de manevr

Metode de plat: chiriile exprimate n Euro dar pltite n moneda local, Ron

Frecvena de plat: n avans, lunar

Garanie: echivalentul a 3 luni de chirie pentru spaii logistice; 6 luni pentru spaii de

producie

Indexare: anual, n general cu inflaia Zonei Euro

Renegocierea chiriei: rar

Contribuii pentru amenajarea spaiului: pe costul chiriailor

Comisionul de agenie: 12-20% din chiria anual



Map: Office Buildings



Map: Retail Developments


www.jll.ro

COPYRIGHT JONES LANG LASALLE IP, INC. 2014. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. We would like to be told of any such errors in order to correct them.

Contacts

JLL Offices

Victoria Center

145, Calea Victoriei

10th Floor

Bucharest

Romania

+40 21 302 3400

+40 21 302 3401

Gijs Klomp

Managing Director

Bucharest

+40 21 302 3400

[email protected]

Andrei Vacaru

Head of Research & Consultancy

Bucharest

+40 21 302 3400

[email protected]

Andrei Drosu

Junior Consultant, Research & Consultancy

Bucharest

+40 21 302 3400

[email protected]

Bucharest City Report Q1 2014

Documents

Transcript of Bucharest City Report Q1 2014