ROMANIA Market OVERVIEW Q1–Q3 2017
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ROMANIA MARKET OVERVIEW COLORING INSIGHTS Q1– Q3 2017 ROMANIA MarkET OVERVIEW Q1–Q3 2017 CONTENTS 04 OFFICE MARKET 08 INVESTMENT MARKET It is my pleasure to invite you to read the highlights of the Romanian real-estate market 10 RETAIL MARKET in Q1–Q3 of 2017, especially that we are experiencing growth and an ever-maturing industry, which makes me particularly thrilled. 12 LAND MARKET As we are approaching the end of the year, many numbers might seem easy to predict, but future is difficult to prepare in a world where the surprising routinely occurs. 14 INDUSTRIAL & LOGISTICS MARKET We, at Knight Frank Romania, experience everyday demands and discussions in which quality has become a trending concept 16 RESIDENTIAL MARKET and principle. Holidays are approaching and it’s the time of the year when we make plans, we prepare 18 PROJECT MANAGEMENT for an end and a new beginning, we might be tired because it is ending or excited for what’s coming, whatever the case, I invite you to take off a few minutes and feel free to take stress off your shoulders while coloring our report. Create your own shades of reality, in an already grounded one! As the world’s largest independent property consultancy, our pledge to clients is to remain a constant in an unpredictable world and to provide you with expert advice and exceptional service. Please feel free to reach out to us in case you would like to discuss property matters. We will be delighted to help you! HORATIU FLORESCU Chairman & CEO Knight Frank Romania 3 ROMANIA MarKET OVERVIEW Q1–Q3 2017 Henri Coandă International Airport u c s e n i MAP 1 m E i r a o h l i i t M Class A&B office buildings ș OFFICE MARKET e a r HIGHLIGHTS d u a c r u Q1– Q3 2017 t S B a e l a C The first nine months of 2017 Overview Supply saw a take-up for class A & B offices of over 225,000 sq m, Bucharest’s office sector witnessed First nine months of 2017 welcomed 41,550 sq m new office space, few in very close to the same period a strong performance in the last Ș number compared to last year’s record o i se t months, proved by the vigorous take-up au ș e last year, but the average a B i o an l a P tu – i deliveries, but it’s interesting to follow t lu ș standing already at 70% of the entire i e r transaction grew from around Ș u o c se u a B the maturing rhythm of the market: new u a a last year level. B u i u a c r 1,600 sq m to 1,900 sq m. e ni u a r s ce n i e o ș rz deliveries in new office sub-markets of t Ș u U i – T i– T Baneasa – șt a a re rg r u o e uc v p B The most sought after submarkets in i i a ș P the city, where tenants pay more for a u te a Ș a e o s s u o e a Ș a u e a s Prime rent level remains stable Q1-Q3 2017 were Calea Floreasca/ B o premium location (NEPI’s 7,250 sq m Ș an a tu lu at €18.5/sq m/month. Barbu Vacarescu and CBD (Central Aviatorilor 8 building) with additional i Ș Baneasa o s B e - i a Ș d t B- Airport u ș du amenities or even go to a completely o u l A a Business District) with an impressive s e l i e e B r Pipera d a o og e u l a u ă C c P r e Ch u ii n it r i– t il e t u new area for offices (Timpuri Noi ei ș ș i r leased area of 85,000 sq m, representing e t ă i r n i u a N Total stock on the Bucharest c c i o u r t a i B n e i Square of Vastint, 32,000 sq m). a t P n almost 40% of the total transactions. u le Ș a a o o e a i C office market reached se r pe d s a au e Dimitrieom a u a o ip P r a e t e Ch Ș aua P tri s Another project delivered, in CBD, in it Presei Libere Șose mi S o ile DiPompeiu Ș If we compare these facts with the i S t r 2,51 mil sq m at the end of the Square a ră d u a 2017 was Dorobantilor 33 of Downtown t Calea n B e same period of last year, we can notice C ar e Floreascab first nine months of 2017 of class d u a - u V Center (2,300 sq m). a /Barbu ă e s c o ă the difference in the areas that were Ș r Vacarescue Ș a A & B office buildings. s C o c u a B c l -d s e u e C as a l a a e I r l o u e r G n o a i o a l e in high demand: over 76,500 sq m in l In terms of stock by submarkets, at r i D T M l i r v K F u a i o c iț hal i o a n s r a t L i e o l e e t a u a l i c l i b -d n e a h v a B e f l e f n C A o Center-West and over 40,000 sq m in the end of Q3 2017, Calea Floreasca/ ț CBD il C o a r u ași a râng e lea C s Dimitrie Pompeiu. Barbu Vacareascu stays on top with Ca l Iancu de Hunedoara o B-du Ș ei l Biruinț C B-du a C l a total modern office stock of approx. al e ea a G r i r V t iv B-dul D lo i ș iț i B a i i e c ci As expected, the IT&C sector still covers e i - a ș ț t v o d o u ă r t i u M 430,000 sq m, followed closely by CBD z e ir l ui o i a ul Ș M Ianc ose V r e ua au a a l Șose Pant G a e a a lim g on u C most of the demand on the market, a bei Vodă Știr h a u e e a r with almost 400,000 sq m and Dimitrie s e u o arol I Ș C os l B-du Ș occupying approximately 125,000 sq B-d abia u r eta r l Iul a Elisab a B Pompeiu with approx. 350,000 sq m. iu Ma iu Maniu o B-dul Regin B East as niu B-dul Iul l l B - iu Maniu r -du B-dul Iul B d roi ă ul E t St l i ra an d u a Ș N In m (56% of the entire take up of the o -d du u s s B-dul CenterNaț i tr Center-West e B iunilor Unite c iilo au o r a l P a a e n B-dul Un d ia irii G u r D analized period), compared to the 40% S r a r t i i r i g a M m d a o n S West a i i r p g t e P e r a s r R i i e o e ri g l u c b u l u of Q1–Q3 in 2016. r d C em e - U t a p su B B- Se n n du l i u l C 3 u t 1 r v a i e i m Demand i a m i r l R B e i s r s ai u h encea i l Gh M B-du i a e u v a Total take-up of Q1–Q3 of 2017 in cea o se Ghen h o ngirea a Ș B- Prelu R dul T a heod le or P a allad C y Bucharest reached 225,000 sq m for i t ș Ș o e South r Sp s ă la scu e iul Șoseaua Tudor Vladimire c a Un ă i u rii class A & B office space. This volume V a a d e e l a a C ri e nd C is very close to the total take up of the n xa i FIGURE 1 FIGURE 2 t le plaiul Uniri u A S r ua ă ea Șos Șo se Demand by leased area Demand by type of transaction same period in 2016, of 232,000 sq m, au a O lt en Q1– Q3 2017 Q1– Q3 2017 ițe but the average transaction grew from i 1,600 sq m in 2016 to 1,900 sq m in the Ș o analized period. se a u a O l ia te r ni d ui n l ț a u e x i i le g In terms of the size, larger transactions r A u a i u G a e a s u o of over 5,000 sq m were again dominant, a Ș e s o their total area accounting for a 46% share TABLE 1 TABȘ LE 2 Vacancy rates Prime headline rents of the take-up, a slight increase from the ră u nt Ce e Șo d sea a previous record year (40% in 2016).