Real Estate Regional Hubs

Cluj-Napoca: the IT&C hub in the heart of Transylvania.
Cluj-Napoca: the IT&C hub in the heart of Transylvania. 1200 800 ROMANIA PROPERTY CLUB

In the North-Western part of the country, Cluj-Napoca is one of the most important regional cities, gathering an impressive modern stock in terms of office, logistics and retail developments. With a county population of 740.020 inhabitants, out of which 325.179 are in Cluj – Napoca, the area is a magnet for investors from various domains. The value of the average month salary is 934 EUR, the unemployment rate standing at 2.1%.

According to CBRE, the office stock in Cluj-Napoca accounts for 353,300 sqm with prime rents at 15.50 EUR and a vacancy of 8%. The total leasing activity amounted to 2,700 sqm for the first semester of 2022, with the prime yield at 8.00%. The pipeline for 2022-2023 is estimated at 55,000 sqm.  Cluj – Napoca is one of the most prestigious academic, cultural, industrial, and business centres in Romania. Among other relevant institutions, it hosts one of the largest universities in the country, the Babeş – Bolyai University.

RECORD PARK CLUJ-NAPOCA

The modern retail stock accounts for 157,600 sqm, while the retail stock density (SQM/1,000 Inhabitants) reached the level of 485. The dominant projects in the city are VIVO! with 61,000 sqm and Iulius Mall, with 57,000 sqm, part of Iulius Group. Iulius Group announced earlier in 2022 a large mixed-use scheme, on the former Carbochim platform. The project will comprise among numerous functions and facilities the largest retail area in the country (115,000 sqm). It also proposes to become a model of integrated approach to green spaces, connecting the urban garden spanning on 4-plus hectares with the adjacent parks and a complete reconfiguration of the road and pedestrian infrastructure.

IULIUS CARBOCHIM CLUJ-NAPOCA

In terms of logistics & industrial, Cluj-Napoca is part of the West/Northwest Region, an area which collects 21% of the total 5,9 million sqm national stock. The local modern logistics stock in Cluj-county is 423,000 sqm, with a vacancy rate of 6.1% and a prime rent of 4.10 EUR. Cluj is an important industrial hub, connecting Romania’s western borders with the center region, creating a great logistic pole.

LOGISTICS CLUJ-NAPOCA

CREDITS: IULIUS COMPANY / E.ON RECORD PARK / FORTIM STUDY

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Timisoara: Romania’s gateway to Europe.
Timisoara: Romania’s gateway to Europe. 1200 800 ROMANIA PROPERTY CLUB

Located in the Western part of the country, Timis county is part of Romania’s main regional development hubs.

The county population gathers 760.284 inhabitants, out of which 318,296 are in Timisoara. The county’s GDP for 2021 stands at 12.4 billion EUR. The place to go through when exiting the country towards the Western Europe and the link with the Capital City through A1 highway pinpoints Timisoara as Romania’s gate to Western Europe, with excellent connectivity with Pan European corridors. Both national and international developers found Timisoara’s location, infrastructure development and the skilled labor force as great advantages for their future projects.

With a convenient location, near Hungary and Serbia borders, Timisoara benefits of good road connectivity and is Romania’s Southwestern university hub. The local office stock stands at 294,000 sqm, with prime rent at 14.5 EUR and a vacancy of 15%, according to data from CBRE Romania. Some of the key leasing transactions in H1 2022 include Atos, Access Group and Amazon at UBC 0 and 1 by Iulius.

UBC TIMISOARA

The modern retail stock accounts for 199,500 sqm, while the retail stock density (SQM/1,000 Inhabitants) reached the level of 607, as indicates data from CBRE. The city’s dominant retail projects are Iulius Mall with 93,000 sqm, part of Iulius Town mixed use scheme, in the portfolio of Iulius Group and Shopping City Timisoara with 56,900 sqm, part of NEPI Rockcastle portfolio.

IULIUS TOWN TIMISOARA

The logistic & industrial stock comprises 548,100 sqm, prime rent level is 3.85 EUR, while the vacancy rate stands at 7.4%. Timis county claims the largest share of modern industrial stock from the West & Northwestern region, hosting numerous production, logistics and storage facilities. VGP has a presence of over ten years in Timisoara, with one of the most modern industrial parks in Western Romania. The site offers six modern industrial buildings with an area of 155,000 sqm hosting tenants such as Quehenberger Logistics, Ericsson Continental, Hafele or Kathrein.

VGP TIMISOARA
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Iasi: “the tech darling” in North-East of Romania.
Iasi: “the tech darling” in North-East of Romania. 1200 800 ROMANIA PROPERTY CLUB

A strong university center, with two prestigious educational institutions – Alexandru Ioan Cuza University and Gheorghe Asachi Technical University – which together enroll around 40,000 students annually, Iasi has benefited from the well-trained workforce and attracted numerous investments from IT, BPO & SSC and auto industries. Subsequently, the local real estate market had a dynamic evolution, especially on the office & residential sectors. With a county population of 975,586, of which 391,024 are in Iasi, the annual GDP stands at 8 billion EUR.

With a well-educated workforce, Iasi attracted important employers, Amazon hosting here an important R&D center. The facility plays a major role in the city’s tech industry, employing skilled experts who are inventing new technologies in the fields of Cloud Computing, Information Security, Machine Learning and Data Analysis. Besides Amazon, Cognizant, Conduent, CRF Health, Almaviva, HCL, Basware, HCL, Basware, Accenture, E.ON, Harte Hanks are the major occupiers in the city. The office stock stands at 205,000 sqm, with a vacancy of 8% and a prime rent of 15 EUR, as indicates data from CBRE.

PALAS CAMPUS IASI

The modern retail stock reached 156,100 sqm, while the retail stock density (SQM/1,000 inhabitants) reached the level of 410. The city’s major retail schemes are Palas Mall (57,000 sqm) and Iulius Mall (25,000 sqm), both from the portfolio of Iulius Group and Mall Moldova (41,000 sqm) in the portfolio of Prime Kapital.

PALAS IASI

The logistic potential of Iasi is still untapped, considering the less developed infrastructure in the area and the city`s access to the Eastern routes of the country, which is less appealing for the institutional investors. Yet, several investors have started to show interest in the region in the recent years, most notably retailer Kaufland that works at its 3rd national logistic center in Miroslava.

LOGISTICS IASI
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Brasov: airport to open new real estate opportunities.
Brasov: airport to open new real estate opportunities. 1200 800 ROMANIA PROPERTY CLUB

Benefiting from an excellent location, in the center of Romania and only 180 km from Bucharest, Brasov attracted investments on all segments of real estate market: residential, offices, retail, logistics and hotels. The new airport expected to be inaugurated in 2023 will bring new business opportunities.  A tourist destination in the very heart of the country, Brasov attracted numerous production facilities.

The annual GDP of the county reached 8.3 billion EUR in 2021. Brasov attracted a wide range of high-tech providers and pharma companies.

The modern office stock in Brasov stands at 155,300 sqm with prime rent at 13 EUR and a vacancy rate of 13.7%, as shown by CBRE Romania. Brasov hosts a wide range of high-tech providers, IT&C and pharma companies as well. NTT Data, Sykes, IBM, Cerner, Accenture, Ipsos, Xperi, Jungheinrich, Hiperdia are some of the major office occupiers in Brasov. One of the major mixed-used projects inaugurated here in recent years was AFI Brasov, a shopping mall and a 15,500 sqm office building.

AFI BRASOV

CBRE indicates that the modern retail stock accounts for 175,800 sqm while the retail stock density (SQM/1,000 Inhabitants) is 607. The main retail developments in the city are Coresi Brasov (59,000 sqm) from the portfolio of Nhhod and AFI Palace Brasov (45.000 sqm) from the portfolio of AFI Europe.

CORESI BRASOV

In terms of logistics & industrial, the modern stock is 306,000 sqm with a vacancy rate of 0.5% and a prime rent of 3.85 EUR. The city attracted last year an important international investor. After an active presence in the West part of Romania, Belgian-based VGP chose Brasov for a new development. VGP Brasov is developed on 39-hectare plot of land, the total park being able to host up to 180,000 sqm GLA of class A logistic spaces.

VGP BRASOV

An important touristic destination, Brasov is expected to attract new investors on this sector. JAKOB SONNE Resort will be developed by Certion on a 2 hectare plot in Poiana Brasov and includes 214 apartments. The project wears the signature of the famous Austrian architect Franz Janz.

JAKOB BRASOV
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Constanta: untapped potential on office & logistic sectors.
Constanta: untapped potential on office & logistic sectors. 1200 800 ROMANIA PROPERTY CLUB

Located in the South-Eastern part of Romania, Constanta is a city holding tremendous development potential, due to its opening to the Black Sea and the Danube navigable channel, but which recently reached into the attention of large real estate developers. The modern office segment is not at all represented, the city holding no major office investment.

On the retail sector, the modern stock stands at 183,600 sqm, while the retail stock density (SQM/1,000 Inhabitants) stands at 586, according to CBRE. The city’s dominant retail projects are VIVO! Constanta (51,000 sqm), in the portfolio of Immofinanz and City Park (52,200 sqm) in the portfolio of NEPI Rockcastle.

VIVO! CONSTANTA

On the industrial & logistic sector, the first major modern project, Constanta Business Park, is developed on a plot of 100 hectares, near Constanta port, in partnership between Globalworth and Global Vision.

GLOBAL CONSTANTA

The residential sector attracted the largest share of investments from the entire real estate market. Besides the demand for new, modern units for the inhabitants of the city, the seaside area (Mamaia Navodari & Neptun-Olimp) also is seeing a notable development on the vacation homes sector.

BOREAL CONSTANTA

Some of the major investors include Impact, Gran Via, Certion, Maurer Imobiliare or One United Properties. Olimp resort in the South part of Romania’s coast is in full transformation, through investments of over 700 million euros until 2025. Romanian property developer Certion finalized here VOGH project. The 12-storey VOGH complex totals 173 apartments, out of which 85% have been sold, with a total value of 57.6 million euros.

VOGH CONSTANTA
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PwC: Logistics ranked no. 1 for Investment in Europe
PwC: Logistics ranked no. 1 for Investment in Europe ROMANIA PROPERTY CLUB

PwC: Logistics ranked no.1

for Investment in Europe

General economic outlook is positive, with expectations for profits and headcounts to increase in 2018, according to Emerging Trends in Real Estate®: Europe 2018 survey by PwC & Urban Land Institute, based on 512 respondents from across 22 European countries. The key issues impacting businesses this year are the availability of suitable assets/land and construction costs.

MAIN TRENDS

INDUSTRIAL SECTOR IN THE FOCUS

Given the impact of technology upon real estate, industrial sector is ranked number one for investment and development prospects in 2018, largely on the back of the growth in online retail sales.

“Technological change is clearly playing out in the retail sector, and as retail shrinks, logistics expands, as does the last-mile delivery convenience to the consumer”, says one global capital markets adviser.

RESIDENTIAL HITS TIPPING POINT

Until recently, residential was seen by many institutional players as a niche sector, and for some, too specialist. Today, the industry appears less bothered by the obstacles to investment and increasingly swayed by the opportunities that could emerge from huge housing shortages across Europe. The Emerging Trends Europe survey reveals availability of affordable housing as one of the key social problems facing the industry in 2018 – more of a concern than environmental issues and mass migration.

REDEVELOPMENT INSTEAD OF SPECULATIVE DEVELOPMENT

Redevelopment is the most attractive way to acquire prime assets, thus translating into a low-risk strategy based on astute asset management and refurbishment rather than a hasty return to speculative development.

SMART ASSET MANAGEMENT

The greater importance attached to asset management reinforces the trend by institutional investors towards employing fewer and larger managers. Low returns and a lack of product in a late-cycle market have underlined the importance of “smart asset management”.

“We are not going to be able to generate the returns we want by buying assets and sitting on them,” says one pan-European investment manager. “We have to think about the management of the tenants, refurbishment and re-gearing.”

CO-WORKING TAKES HOLD

The rise of the flexible office sector and co-working stands out in Emerging Trends Europe. They are much more than simply property buzzwords but, as the interviews reveal, a workplace phenomenon whose influence has taken hold of the European industry in a profound way since last year’s report.

“As landlords we have to be more flexible,” says one convert to co-working. “Tenants are asking for shorter leases and break options. It requires a change in mindset and a willingness to take more risk.”
“Not everything is going to be WeWork,” says one value-add investor. “I still think there’s a huge amount of money to be made in traditional offices with larger occupiers. But the proportion of the market will grow for co-working, smaller companies, incubator space. Flexibility within buildings – the ability to sub-divide – becomes increasingly important, which comes back to obsolescence.”

Emerging Trends in Real Estate® Europe 2018 reveals an industry that is becoming more complex, yet more transparent and accessible. Whatever the outcome, it is certain that the industry will need new skill sets, new ways of collaborating outside traditional industry boundaries and new business models to survive and compete in the new real estate ecosystem. You can read more info about the survey here.

TOP 10 OFFICE DEALS, Q2 2018
TOP 10 OFFICE DEALS, Q2 2018 ROMANIA PROPERTY CLUB

TOP 10 OFFICE DEALS, Q2 2018

Co-work takes hold in the second trimester on the office market in Bucharest, with two new international groups announcing their entrance on the local market: Mindspace in Globalworth buildings and Spaces in Campus 6.1 and Unirii View. Another important new entry has been confirmed – London Stock Exchange, thus reinforcing the potential of the Romanian office sector, with a positive signal to institutional foreign investors.

MINDSPACE -GLOBALWORTH – 12,000 SQ. M, PRE-LEASE

Romania became the 7th country in which Mindspace offers its workplace solutions, following a leasing agreement with Globalworth for 12,000 sq. m in Globalworth Campus, City Offices and Bucharest Tower Center. Moreover, as part of their collaboration, Globalworth will become Mindspace’s shareholder by investing USD 10 million in the company. By entering Romanian market, Mindspace is expanding its portfolio to 28 locations in Europe and the United States, being present in 7 countries and 13 cities.

HUAWEI- LAKEVIEW– 6,300 SQ. M, RENEWAL

Chinese telecoms equipment maker Huawei has renewed its office lease deal in Lakeview, in a deal brokered by CW Echinox. The property is a landmark building in Bucharest’s most dynamic business hub from Barbu Vacarescu – Floreasca. The building was one of the first developed in this location by AIG Lincoln & Fabian, sold in 2013 to NEPI Group. It has a lettable area of 25,600 sq. m and has an occupancy rate of 98.8%.

THALES – ORHIDEEA TOWERS, 5,300 SQ. M, PRE-LEASE

Industrial group Thales has pre-leased 5,300 sq. m in CA Immo’s Orhideea Towers, which is to be delivered this year. The deal was brokered by JLL. The two towers of the project will have 13 and 17 floors, with surfaces up to 2,700 sq. m per floor and two underground floors each. The property is located in the Center-West sub market, a key location for the Austrian investor, which has acquired earlier this year  Campus 6.1 from Skanska in the area.

SCHLUMBERGER- THE BRIDGE 2, 4,500 SQ.M, PRE-LEASE

Schlumberger, the biggest technology supplier for oil and gas industry, has signed a pre-lease deal with Forte Partners for 4,500 sq. m in the second phase of The Bridge project. The deal was assited by CBRE. Schlumberger will open a shared services center on the premises. The second phase of the The Bridge will be delivered in the first part of 2019. The project located near Basarab overpass, in the Center West submarket was recently sold by Forte Partners to Dedeman in what has became the biggest transaction of 2018.

MEDICOVER- THE BRIDGE 2, 4,500 SQ.M, PRE-LEASE

The fourth place is occupied by two deals in the same building, as Medicover has pre-leased in Q2 4,500 sq.m in The Bridge 2, in order to bring together under the same roof all of its entities: Medicover, Synevo, Synevo Central Lab Clinical Trials and Software Development Competence Center. The company will open a clinic on an 840 sq. m area at the ground-floor of the building, while the rest of 3,700 sq.m will host the management and operational teams of the company’s group.

SPACES – CAMPUS 6.1, 3,100 SQ.M, PRE-LEASE

Spaces, part of International Workspace Group which also owns Regus, pre-leased a 3,100 sq.m in Campus 6.1, the office project developed by Skanska, near the Politehnic University in Bucharest. The Spaces’ concept features collaborative areas, team rooms, co-working spaces, fully-equipped meeting rooms, furnished private offices and a café.

LONDON STOCK EXCHANGE – CAMPUS 6.1, 3,000 SQ.M, PRE-LEASE

CBRE advised London Stock Exchange Group (LSEG) in the leasing transaction of 3,000 sq. m office space for a new Business Services Centre in Bucharest. The center will open later this year in Skanska’s Campus 6.1. The building is located in the Central-West area of Bucharest, near the Polytechnic University, a strategic location chosen by the British company. LSEG will initially employ 200 people across a range of roles.

“We are pleased to announce the opening of our new shared services center in Romania. Romania offers LSEG a highly-skilled workforce, a strong education system and good infrastructure”, said James Nunn, Head of Group Property, London Stock Exchange Group

SPACES – UNIRII VIEW, 3,000 SQ.M, PRE-LEASE

Spaces leased 3,000 square meters of office space in Unirii View and will open in the autumn of 2018 its first business hub located in the central area of Bucharest. The deal was brokered by CBRE. Spaces is characterized by a modern and creative design, materialized in unique working environments that enhance the entrepreneurial spirit.

“It is a very good sign for the Romanian economy when such an important player like Spaces chooses to enter this market and to expand massively”, pointed out Răzvan Iorgu, Managing Director of CBRE Romania.

CAMPUS 6.1, 2.200 SQ. M, PRE-LEASE

The Center-West submarket is the star of the Top 10 Deals in Q2, gathering a total of six deals. CBRE assited a company active in the computers & ti-tech sector for a 2,200 sq. m deal at Campus 6.1.

Campus 6 includes four office buildings with a total leasing area of 81,000 sq. m, the first building foolowing to be opened in Q3 2018. The project will include 7,000 sq. m of green areas, an amphitheater to gather social & business meetings, restaurants and coffee shops, as well as a running track on the roof.

DELPHI – GLOBALWORTH CAMPUS II, 2,1500 SQ.M, PRE-LEASE

The team of CW Echinox has assisted Delphi in pre-lease transaction of 2,150 sq. m in Globalworth Campus II. The business park will comprise three main office towers offering 88,000 sq. m. of GLA and 760 parking spaces.

One of the main tenants in the project is Amazon. Globalworth has became the leading office investor on the local market, with a portfolio exceeding 1 billion EUR.

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