Property News

The most important event on the local retail market is the redevelopment of the former Era Shopping Park into Moldova Mall.

Prime Kapital leads the transformative effort that will bring the largest hypermarket in the region, more than 200 shops with the most diverse fashion retailers, 30 restaurants, a novel leisure concept, a home design solution, and the flagship IKEA store. The opening of the regional super-mall is expected for Q2 2025.

The development of Silk District triggered important changes in the South side. In addition to the residential and office components, Silk District will bring c.a. 10,000 sq m of commercial spaces to the market. The success of Silk District raised motivation for the owners of the land plots in the area to bring to life residential, commercial, and office concepts.

Dedeman filed for PUZ for a commercial development adjoining Felicia Shopping Center. The development is on 4.6 ha concessioned by the City Hall; while the plot was leased more than 15 years ago, Dedeman chose to develop once the area brought qualitative residential developments. Kaufland is building a large 35,000 sq m retail park in the immediate vicinity.

The established retail leader, Iulius Group, has ambitious plans to revamp one of Romania’s best-performing shopping centers – Palas Mall, to accommodate new tenant demand. Over the past year, the group welcomed new fitness and cosmetics retailers across the shopping centers and retail parks the company developed in the region. Through community-oriented events, Iulius Group nurtures a solid relationship with the people of Iasi and generates traffic that is hard to match by other schemes in Romania.

An analysis with the support of imobiliare.ro

Medium asking prices for new residential units stood at 1,712 EUR/sqm in September, making Iasi the most accessible regional center following Cluj-Napoca (3,230 EUR/sqm), Brasov (2,313 EUR/sqm), Bucharest (1,993 EUR/sqm), Constanta (1,926 EUR/sqm) and Timisoara (1,922 EUR/sqm).

The medium asking price for both old and new units was 1,700 EUR/sqm, an increase of 19,8% vs the previous year.

Real estate deals at county level registered an increase of 58% (individual units) in the first three quarters of 2024 as compared to the same period from previous year, as data from ANCPI (National Cadaster Office) shows.

The most sought-after areas in the city were Nicolina, Pacurari and Bucium-Mircea cel Batran for sales, while for lease transactions the biggest demand was for Copou-Sararie, Nicolina and Tudor Vladimirescu.

Regarding the residential building permits, at the county level there were issued 1,488 such authorizations in the first three quarters of 2024, an increase of 14% as compared to the same period from 2023. Looking at the Moldova region (Iasi, Bacau, Botosani, Neamt, Suceava and Vaslui) there are only 2,753 new building permits, a decrease of 22% as compared to the same period from 2023.

Iasi registered a slower office market dynamic during the first half of 2024, following a strong 2023. While no new leases were officially registered in H1, the third quarter revitalized the perspectives for the end of the year. Levi9 opened its office in Silk District, whereas Coca-Cola announced a regional office at the same location. Regus, the worldwide leader in serviced offices, signed a partnership to offer flexible space to companies looking to test the local market and ramp up hiring before committing to longer leases. Despite the slower take-up and the 20% vacancy rate, prime rent jumped to 17 EUR/sq m, one of the highest asking rents for a regional city.

Following Iulius Group’s successful leasing of the newly delivered Palas Campus and the subsequent new entries (Expleo), expansions (BRD Societe Generale Service Center), and renewals (Conduent), one of the most important events is the delivery of the first phase of Silk District. This mixed-use development kick-started the gentrification process of the former industrial platforms south of Iasi. Prime Kapital recently announced the start of the Phase III development, outlining the huge success of the residential component. The developer’s courage to create a hub led to other initiatives in residential and commercial in the immediate vicinity, thus potentially transforming the entire area into a prime urban destination. The office component of Silk District added 23,000 sq m to the total stock, with the potential to build up to 104,000 sq m of Class A workplace infrastructure.

Some developers, such as Evergent Investments, postponed their 100 million EUR office, residential, and commercial mixed-use investment to assess macro and geopolitical risks. As Iasi is closer to the Ukrainian border than other regional leaders, it is natural that some investors have a different risk appetite in comparison to the developers with strong experience in the local market.

Should the local talent pool continue to upskill, the local office market shall grow as well. The rise in wages makes the city less appealing to BPO/SSC operators, presently considering tertiary markets to meet their profitability margin. Recent initiatives, such as Launch’s debate over the transition to a product market, are much welcomed.

While the stock in the broader North East region represents merely 3% of the total modern Class A industrial & logistics infrastructure, during the first half of the year, the total new deliveries represented 16% of the pipeline. This is in anticipation of the opportunities brought by the A7 highway and a reflection of a vibrant local business environment.

Production facilities dominated the market, with local, national, and international champions placing bets on the value-add of the region. Catena, All Green, Crescento Packaging, and Dalex Termo Prod are building six new warehouses in Miroslava Industrial Park. German company Gergen Kipper und Fahrzeugbau is adding new facilities in the same park. Belgian producer IGW is building a new gearbox factory in Tomesti. One of the most important investments is a new professional cleaning products factory, built by local champion Misavan in partnership with Quimxel Spania. The 10 million EUR investment shall create 100 new jobs. An interesting project is Chimcomplex’s proposal to invest 2.2 billion EUR in a new biochemistry compound. The company filed a proposal to take over the city’s heating system, as a by-product of the cogeneration plant. Thus, the company pledges to contribute to the country’s reindustrialization policy.

Antibiotice Iaşi, the largest producer of medicines with Romanian capital, has a total investment plan of 850 million RON between 2023 and 2030, to reach a turnover of 1 billion RON at the end of this period. The company has already started investing in the industrial platform in Iasi, opened a new production unit for creams, gels, put into operation a power plant with photovoltaic panels, and the manufacturer’s representatives are still looking for new growth opportunities. The plan is already established, but depending on what comes new, the company’s strategy adapts. “The emphasis will be on the modernization of existing manufacturing sites, the development of new production flows as well as investments in research. In addition, we plan investments to strengthen our production infrastructure, modernize the water and energy management systems, strengthen energy independence, as well as improve the logistics capacity of the platform”, said Ioan Nani, general director of Antibiotice Iaşi. The funding sources are multiple and include both state aid from the Ministry of Finance, a loan from the European Investment Bank (EIB), as well as own funding sources

On the professional developer’s side, Oresa Industra and ELI Parks are the funds that placed their trust on the Eastern front. ELI Parks secured a landmark lease of 12,000 sq m with Dr Max, the leading pharmaceutical chain. Oresa Industra is looking to extend its Iasi park by 40,000 sq m. Subject to demand, other top industrial & logistics investors might develop a presence in the East region once A7 is functional, starting in 2026.

Meanwhile, the local authorities are setting up new industrial parks to support the local production economy. The County Council allocated funds for new industrial parks in Letcani, Pascani, and Holboca.

The region of Moldova, guided by Iasi, will have a series of opportunities in the coming years, from infrastructure projects for the A7 and A8 highways, to the development of new hubs.

The North-Eastern region of Romania continues its development, investors are targeting locations for production facilities while major infrastructure developments will easily connect the region with the rest of the country.

The A7 highway is in the advanced stages of execution, with an expectation for handover in 2025 and 2026 for the portion leading to Siret. A7 will connect the entire Modova region with Bucharest, quite literally paving the way toward new production and logistics facilities.

Considering the region’s high unemployment rate and low salaries, new investments will markedly change the standard of living for the people in Moldova.

However, Iasi is vocal about prioritizing A8, the highway that connects the city to the western market routes across the Carpathian mountains. Works started towards the west side of the highway (Targu Mures end), with various lots under planning, bidding, or execution. Another important point of A8 is the bridge across the Prut river, at Ungheni, which will enhance the economic, logistics, and cultural exchanges with Republica Moldova, a country timidly making a move towards European integration.

However, considering the complexity and cost of crossing the mountains, the final delivery of A8 might be pushed towards the end of the decade.

Iasi remains one of the most underdeveloped hotel markets in Romania, with branded hotels representing just 12% of total rooms capacity.

In 2023 Iasi airport represented the third busiest airport from Romanian following Bucharest and Cluj-Napoca with an annual traffic of 2,3 million passengers. The trend maintained in the first semester of 2024, when data from National Statistic Institute shows a total traffic of 1,056,000 passengers.  The airport has 4 terminals, with passenger operations taking place in the main terminal T4 (which is used for all domestic and Schengen flights) as well as T3 (used for non-Schengen flights). Terminal T4 was opened in March 2024, following an investment of around 100 million EUR. The old T1 terminal now functions as office, administrative and storage space, while the former T2 terminal is to be converted into a cargo terminal.

The arrivals in “Rooms and apartments for rent” from Iasi City was relatively stable throughout the last 3 years.  Although for 2023 it was a decrease in overnights of 12% compared to 2022, in the first 9 months of 2024 there is a growth of 16.0% compared to 2023.

The average length of stay in hotels and apartments for rent is in the range of 1.5-1-6 nights. However, for apartments we have noticed resilience as opposed to hotels where there is a decrease y-o-y in the last 6 years (i.e.: 1.73 nights in 2018 and 1.67 nights in 2024).

There is no branded hotel in the pipeline, with a small offer of only 193 rooms, in two hotels, 3* classified. There are no 4* or 5* branded hotels in Iasi.

In terms of tourist arrivals in hotels, Iasi city registered a positive increase of 1.5% in 2023 as compared to 2022 but a negative growth of almost 1% for overnights. The negative trend from 2023 continued in 2024 and both indicators are below 2023 with around 12%.

Mircea Draghici, Managing Partner, Est Hospitality:

“We have noticed a shift in demand from hotel rooms to apartments for rent in the market. This is a trend that we see in other cities as well in the last two years. It also shows that Iasi city has a big growth potential for full-service hotels (ie 4-star).”