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 depit

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

estimeaz ca trendul ascendent pe care ara se afl s

continue i n 2014 cnd PIB se preconizeaz la un nivel

asemntor 3,3% potrivit EIU. 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, a crui

cifra de afaceri a crescut cu 8,3% (12,3% la vnzrile de

produse nealimentare) n perioada similar din 2013. n

consecin, n ianuarie i februarie 2014 att exporturile ct i

importurile au crescut cu 9,2% respectiv 9,4%, n comparaie

cu aceeai perioad din 2013. Totui, sectorul construciilor a

continuat s scad, n principal datorit reducerii numrului de

lucrri de infrastructur. Conform ultimelor rapoarte ale EIU

(Econ Intelligence Unit), se ateapt ca PIB-ul Romniei s

accelereze puternic la 3,8% n 2015.

Rata anual a inflaiei a atins n perioada aprilie 2013 martie

2014 un nivel sczut record 2,3%. Ca o consecin Banca

Naional a Romniei (BNR) a continuat s ajusteze rata

dobnzii de politic monetar, ce a ajuns din februarie la un

nou minim istoric de 3.5% o micare ce urmrete n

continuare ncurajarea creditrii, ce a dat deja semne pozitive

nc de la nceputul anului, dar i stimularea creterii

economice. 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 a fost a patra cea

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

bugetar pentru 2014 este de 2,5% din PIB.

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 din anul 2013. Cea mai mare tranzacie a fost

achiziia de ctre Globalworth 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 din portofoliul RREEF. Globalworth a fost de

asemenea i cumprtorul Tower Center International, un turn

de birouri in CBD-ul din Bucureti pentru suma de 58 de

milioane de Euro. Piaa spatiilor 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 de la nceputul anului 2011.

Volumul tranzacionat n primele 3 luni ale anului s-a axat pe

piaa de birouri ce a reprezentat 80% din ntreaga activitate.

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

Romnia s-a ntors ca o zon important pe harta marilor

investitori. Activitatea nregistrat a fost dominat de tranzacii

derivate din restructurri, dar, cu un numr important de cldiri

de calitate disponibile pe pia, se atept ca volumele s

creasc puternic n acest an. Mai mult, un numr mai mare i

divers de cumprtori este de ateptat, un lucru important

pentru felul in care investitorii percep lichiditatea la momentul

vnzrii Cerea poate fi alimentat de asemenea i de un apetit

din ce in ce mai crescut al bncilor pentru a oferi finanare.

Chiar dac condiiile oferite n Romnia nc reflect riscul de

ar perceput, simplul fapt c numrul de bnci ce ofer

finanri imobiliare s-a ameliorat reprezint o important

mbuntire ce va facilita o lichiditate mai crescut.

Datorit creterii economice puternice dar i interesului tot mai

acut artat de ctre investitori 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

Thou

sand

s m

Total Stock (left) Vacancy Rate (right)

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014F

Euro

/m2 /m

onth



Piaa spaiilor de birouri

Oferta & rata de neocupare

Dou cldiri de birouri importante au fost livrate n primele tei

luni ale lui 2014, Hermes Business Campus al lui Atenor Group

i o extensie a Metropolis Center al lui Soravia, ce mpreun au

adugat o suprafa 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 m2. Pentru restul anului se

estimeaz a fi finalizai nc 120.000 m2. Patru proiecte majore

vor reprezenta 70% din ntregul stoc ce va fi finalizat n 2014

(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 n care vor fi livrate proiecte n 2014

i 2015 sunt Floreasca Barbu Vcrescu, Center West,

Dimitrie Pompeiu i South. Piaa Center West, n mod

particular, se dezvolt rapid n o zon cheie pentru piaa de

birouri din Bucureti n ciuda mrimii sale nc reduse. Zona se

bucur de mai multe avantaje precum o excelent

accesibilitate fie prin intermediul transportului public sau privat,

apropierea de Universitatea Politehnic, de cele mai mari

campusuri universitare din ora dar i de 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 este estimat la 14,7%. Aceasta

reprezint o uoar cretere, de 0,3% fa de trimestrul

anterior, i se ateapt ca trendul s continue s fie ascendent

i n trimestrele urmtoare n mare parte datorit dezvoltrilor

recente i viitoare. Rata de neocupare este foarte diferit ntre

sub-piee, pornind de la sub 5% n Center West i West i

ajungnd la 35% n Bneasa i Pipera Nord, lucru ce se

reflect i n evoluia chiriilor.

Cererea

n trimestrul 1 din 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. Cele mai mari tranzacii din primele

trei luni ale anului trecut 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

Center West. 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 producie i

industrial.

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 al anului 2014.

Previziuni

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

se estimeaz 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, nceputul lui 2015, dup ce va nregistra o uoar

cretere n trimestrul urmtor. Prerea noastr este c chiriile

contractuale 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

Euro

/m2/

mon

th



Piaa spaiilor comerciale

Oferta

Stocul de spaii comerciale moderne a rmas neschimbat la

aproape 1,66 milioane de m2 n Romnia dup ce nici un

centru comercial nu a fost inaugurat n primul trimestru din

2014, dar dup un trimestru patru din 2013 bogat n livrri

atunci cnd 95.000 m2 au fost finalizai. Din acetia mai mult de

890.000 m2 se afla n Bucureti.

Dou centre comerciale sunt previzionate 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. n consecin 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, a

nregistrat o cretere modest de doar 0,4%, cifra de afaceri n

comerul cu amnuntul a crescut puternic n primul trimestru

din 2014, cu 8,3% n comparaie cu aceeai perioad anul

trecut. Vnzarea produselor non-alimentare a fost ns cea

care a impresionant cu o cretere de 12,3%. Ne ateptm ca

acest trend s continue, susinut de creterea economic

puternic, resuscitarea pieei creditelor i ncrederea din ce n

ce mai mare consumatorilor. Este probabil ca performanele

recente vor avea 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.

Muli retaileri internaionali evalueaz posibilitatea intrrii pe

piaa din Romnia dar i preluarea reelelor de magazine sub

franciz locale, ncurajai de creterea vnzrilor. Jysk, lanul

de retail danez, specializat n comerul cu mobila si decoraiun

i va deschide n aprilie un nou concept de magazin in

Coloseum Retail Gallery, dup ce au preluat toate francizele

din ar.

Carrefour au anunat noul concept hard discount pe care l vor

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

proaspete i cu suprafee de 1.000 2.000 m2.

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

trimestru din 2014. Kingfisher a reuit s rebranduiasc dou

dintre cele 15 uniti pe care le-au achiziionat anul trecut.

Operaiunile locale 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 ieirea din Romnia, fie prin vnzarea

magazinelor ori prin nchiderea acestora.

Chirii

Nivelul chiriilor prime, a crescut la 60-70 Euro/m2/lun

demonstrnd primele semne ale redresrii pieei Bucuretene

de retail. Cele mai mari chirii sunt obinute n AFI Palace

Cotroceni i Bneasa Shopping City, considerate a fi centrele

comerciale dominante din Romnia.

Previziuni

Volumul livrrilor pentru 2015 va ajunge pn la 150,000 m2 n

Bucureti, n special n zonele n care nu existau centre

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

mari orae din tar fr o schem de retail dominant.

Prime Shopping Center Rent Evolution /

Evoluia chiriei prime n centrele comerciale

Source/Surs: JLL

50

60

70

80

90

100

110

120

Q42008

Q42009

Q42010

Q42011

Q42012

Q42013

Q12014

Euro

/m2/

mon

th

Min Max



Industrial Market

Supply

Two speculative 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. VGP added 7,200

m to their industrial park in Timisoara. 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. 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. Almost half of this is net take-up, while the other

half is renegotiations and renewals. Activity was recorded in:

Bucharest, Deva, Arad and Timisoara. In the first three months

of the year, Bucharests gross take-up is estimated at almost

19,000 m, 40% of the entire demand in Q1. 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 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 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

Euro

/m2 /m

onth

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

4546474849505152535455

Q42008

Q42009

Q42010

Q42011

Q42012

Q42013

Q12014

Annual rents Yields



Piaa spaiilor industriale

Oferta

Dou proiecte industriale speculative 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 n Lecani, lng Iai. VGP a finalizat nc 7.200

m2 n Timioara. Jones Lang LaSalle a raportat de asemenea

finalizarea n trimestrul 4 din 2013 construciilor depozitului de

11.000 m2 dezvoltat n Ploieti West Park i depozitului de

10.000 m2 inaugurat de VGP n Timioara, ambele acum

ocupate integral.

Un numr de proiecte importante sunt n construcie i se

preconizeaz a fi finalizate pn la finalul anului. Bosch va

inaugura in 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.

TRW Automotive Holdings Corp. plnuiete sa inaugureze o

unitate de producie de airbaguri destinate autovehiculelor, de

4.000 m2 n Roman. n Timioara, VGP au planificat extinderea

proiectelor 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 din total fiind localizai n proiectele din

Bucureti i zonele nvecinate.

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 i Timioara. n Bucureti, n aceeai perioad,

suprafaa total de spaii industriale nchiriate a fost de

aproximativ 19.000 m2, 40% din ntreaga suprafa total

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 fi semnificativ, n special pentru suprafee mari i

durate lungi.

Previziuni

Industria automotiv ncepe s devine cel mai important sector

de activitate al industriei romneti. Noi uniti de producie vor

continua s se deschid, n special in partea de vest a rii

datorit avantajelor clare pe care le are i anume apropierea

de Europa Central si de Vest cea mai important pia de

export a Romniei, infrastructura prezent i plnuit i

disponibilitatea unei fore de munc bine pregtit. Ne

ateptm ca, datorit previziunilor extrem de pozitive ale

comerului cu amnuntul, companii de 3PL vor deveni din ce n

ce mai interesate de spaii unde se vor putea dezvolta. Datorit

accesul 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%

West Bucharest

North Bucharest

North-westBucharestSouth Bucharest

North-eastBucharestEast Bucharest



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

Bucharest City Report Q1 2014 OnPoint reports from Jones Lang LaSalle include quarterly and annual highlights of real estate activity, performance and specialised surveys and forecasts that uncover emerging trends

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.

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Bucharest

+40 21 302 3400

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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]

Documents

Bucharest City Report Q1 2014