29.11.2023

• Iasi

Iulius Group pioneered modern retail in Iasi when it developed the first shopping center outside Bucharest – Iulius Mall, in 2000. Initially a 19,000 sqm development, the retail scheme doubled GLA through subsequent expansions. Today, it hosts over 180 shops, a cinema, a Carrefour hypermarket, and a food court.

However, the primary shopping destination for Iasi and the broader Northeast region is Palas Iasi, developed by the same visionary investor. Palas Iasi is part of Romania’s most significant urban regeneration projects. It features the renovation of the iconic Palace of Culture, seven United Business Center office buildings, a hotel, an events expo, an open-air theatre, and a 62,000 sqm shopping center. Probably the crown jewel of the Northeast region, the total investment in Palas Iasi stood at 310 million EUR and served as essential infrastructure for the overall economic development. Increasing living standards by offering modern retail, office, and entertainment options, Iasi attracted the second youngest workforce after Bucharest. In addition, a steady number of multinational companies provided training and an increased average income, making Iasi a desirable destination not just for university studies but for permanent living.

Iulius Group brought two other concepts to the market. The first one is Family Market, two strip centers located in Iasi’s most dynamic suburban areas (Miroslava and Bucium). The second is the 6,000 sqm commercial area in Palas Campus, a destination for F&B and services to serve the 5,000 employees in the business center.

Other retail schemes in Iasi include Era Shopping Park, a 50,000 sqm retail park located towards the exit to Bucharest. Inaugurated in 2008, Era Shopping Park is anchored by key retailers such as Carrefour, Mobexpert, Rovere Mobili, Brico Depot, Altex, Decathlon, JYSK, Sportisimo, Pepco, Kenvelo, etc. Shopping Park Iasi, opened in 2014 by Square 7, spans 11,000 sqm leased by Flanco, MaxiPet, JYSK, and Kik. In addition, the 10,000 sqm commercial area in the Silk District that developed in five subsequent phases shall enrich the modern retail offering of the city.

Thus, the total stock of modern retail surpasses the 170,000 sqm threshold. The c.a. 20,000 sqm of modern retail expected on the market should increase the retail density  (retail space to 1,000 inhabitants) to 650, an indicator lower than in most other cities in Romania — the number signals room for growth, pending continuous economic development and wage increase. Iasi’s prime shopping center rent is 55 Eur/sqm, whereas retail park rent ranges between 7 to 12 Eur /sqm.

However, there is encouraging news that places faith in the city’s economic prospects. IKEA most recently announced a 24,000 sqm store, its fourth in Romania, opening in Era Shopping Park in 2024. This step confirms that there is a critical mass of young families looking to buy or update property, with an income level matching Western standard.

27.11.2023

• Iasi

The vision of building the first modern office building in Iasi was the crux of the city’s development. Traditionally, blue-collar jobs set the premises for developing more sophisticated services that require modern infrastructure. However, in the case of Iasi, the pioneering led by the Iulius Group set the premise for the city’s economic development. The group transformed the central area through one of the most significant mixed-use urban regeneration projects in Romania.

Following the bold vision of “build, and they shall come,” Iulius developed the first class A office building in Iasi, United Business Center I – a shy 7,000 sqm in 2010, 15 years later than the first modern Class A office buildings delivered in Bucharest. Fast-forward a decade plus later, Iulius developed 130,000 sqm, representing 50% of the total office stock in Iasi and more than two-thirds of the Class A stock. Its most recent portfolio addition is Palas Campus, a 120 million EUR investment spanning over 54,000 sqm of offices and 6,000 sqm of commercial areas. It is home to Amazon, Microsoft, Cognizant, Expeleo, AMD, Hella, and many others. These reputable companies joined a group of over 70 multinationals that decided to capitalize on the talent pool nurtured by the seven universities in the city.

In addition to the United Business Center and Campus buildings, there are two other notable office developments in Iasi. Moldova Center, the reconversion of a former department store into a functional office building, added 16,000 sqm of GLA in the center of the city. It was fully leased by companies such as Webhelp, Conduent, 3Pillar, and HCL. Tester Group built Ideo Centro (later rebranded as Tester Technology Park), a 25,000 sqm business park hosting KPMG, Tata Technologies, Oracle, and Conduent, among others.

In Iasi, the asking rents range from 12 to 15 EUR/sqm, and the vacancy rate is still in the single-digit range, with a preference to work from the office, as the commute is not as burdening as in Bucharest and the workforce requires more in-person time for training and collaboration. Moreover, people enjoy the modern facilities and sense of community provided by the integrated commercial–office schemes and the apprenticeship that comes from shadowing. However, the low vacancy rate and the limited competition of class A office buildings lead to lower tenant incentive packages than in Bucharest.

Prime Kapital is the second prominent investor who took a leap of faith and embarked on a large mixed-use urban regeneration project in Iasi. Silk District is a large-scale residential and office scheme complimented by 10,000 sqm commercial spaces and a 4 ha private park to serve residents and the neighboring area. The first phase of the BREEAM Outstanding office park (c.a. 104,000 sqm at maturity, 5 buildings) is scheduled for delivery in Q4 2023, after a slight delay from its announced target date. Communication concerning the future tenants is pending.

27.11.2023

• Iasi

Public investments of 1.2 billion EUR and private investments in new, modern, real estate projects of half of billion EUR are transforming Iasi in one of the most important cities on Romania’s investment map.

Ongoing public investments:

• 100 million EUR for the expansion of the airport Terminal 4, with the aim of reaching an annual traffic of 3.3 million passengers.
• 670 million EUR for Iasi Emergency Regional Hospital.
• 300 million EUR for Mircesti-Pascani lot from A7 motorway.
• PNRR 175 million EUR for city modernization: trams, schools, and old blocks refurbishments.
• 40 million EUR from EBRD for Dacia tram depot.

Real estate investors such as Iulius, Impact Developer & Contractor, Prime Kapital, plus retailers such as Ikea and Jumbo, also added Iasi to their portfolio.

Iulius finalized this spring a 120 million EUR investment in Palas Campus. Impact obtained the building permit for a major scheme totaling 1,062 apartments on Copou hill. Prime Kapital is developing a mixed-use project on the former Teba industrial platform: 1,549 apartments and 100,000 sqm of class A offices. Jumbo inaugurated a 10,000 sqm unit in October, while Ikea announced Iasi as the third city where it will build a new store in Romania.

The modern office stock counts for 260,000 sqm. The asking rents range from 12 to 15 EUR/sqm and the vacancy rate is still in the single-digit range.

The city is weak in terms of new, modern housing units. Data collected by RPC from imobiliare.ro show that offers for the first three quarters in 2023 total 1,275 apartments, of which the new units listed count for 410, a minus of 18% as compared to the same period of the previous year.

Regarding the retail sector, 20,000 sqm will be added to the existing 170,000 sqm. The broader Northeast region is the least developed in terms of industrial and logistics, representing a mere 2% of the total modern stock.

In the last 10 years, although Iasi hotel tourist arrivals increased by 105% (around 156,000 new tourists), the number of new hotel rooms increased with only 11%. Branded hotels represent only 12% of total rooms capacity and all of them are within “3-star” ranking.  There are no 4* or 5* branded hotels in Iasi.

The county hosts 983,506 people, second only to Bucharest. The metro area of the city of Iasi is where more than half of the county’s population resides. The strong base of an educated workforce attracted dozens of reputable multinational companies, transforming Iasi in Romania’s Silicon Valley.

The proximity to Ukraine and the Republic of Moldova makes Iasi an informal capital for the broader region.