Q4 2018
City Report
Campus 6, Bucharest
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
Unemployment rateDecember 2018
GDP Growth
Q1-Q3 2018 y-o-y
Net average wage
November 2018
Retail Sales, 2018 y-o-y
Industrial production, Jan. – Nov. 2018 y-o-y
4.3%
InflationDecember 2018 y-o-y
3.27% 3.8%
€599 5.7% 5.6%
In 2018, the property investment volume for Romania is estimated at ca. €900 million, a value slightly below the one registered in
2017 (€963 million). However, several transactions in different stages of negotiations were postponed and they are most likely to
be concluded during the first half of 2019. The overall number of transactions decreased, although, the average deal size
increased, standing at approximately €31 million.
Bucharest accounted for over 78% of the total investment volume, mainly due to two very large office transactions in the city
which were closed in Q2 and Q3, respectively. Market volumes were dominated by office transactions (50%), while retail
accounted for circa 35%.
The largest transaction registered in 2018 was the acquisition of The Bridge, a 52,000 m² office park in the Center West sub-
market of Bucharest by Romanian Group Dedeman. This marked the entrance on to the real estate market of the group, who
achieved fame as the most succesful DIY retailer in Romania.
The macro-economic forecast for Romania continues to be positive, despite recent concerns. The country was one of the EU’s top
performers in the first 9 months of 2018 (with GDP growth estimated at 4.2%) and is expected to hold this position for 2019 as
well. On the financing side, terms and conditions are getting closer to what can be expected in the core CEE markets.
Consequently, sentiment is strong, and confidence is at one of the highest ever levels, with a total volume for 2019 estimated to
surpass the €1 billion mark.
Retail, office and industrial yields have all compressed by 25 bps over the year with prime retail yields standing at 7.00%, prime
office yields at 7.25% and prime industrial yields are at 8.25%.
Investment Market
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
Prime Yields
Romania Investment Volumes (€ million)
Key Investment Transactions in 2018
IndustrialShopping Centre Office
7.00% 7.25% 8.25%
Sector Property Market Est. Price (€ million) Seller Buyer
Office The Bridge (phase 1&2) Bucharest 145 Forte Partners Dedeman
Office Oregon Park (phase 1&2) Bucharest 110 Portland Trust Lion’s Head Investment
Retail 50% of ParkLake Plaza Bucuresti ConfidentialCaelum
DevelopmentSonae Sierra
Retail Militari Shopping Center Bucharest 95 Atrium Real Estate MAS Real Estate
Office The Landmark Bucharest 62 Piraeus Bank Revetas&Cerberus
Office Campus 6.1 Bucharest 53 Skanska CA Immo
Office Crystal Tower Bucharest 43 Search Corporation PPF Real Estate
0
500
1000
1500
2000
2500
2001 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Office Retail Industrial Mixed Residential Hotels
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
Evolution of Gross Take-up (sq m), 2009-2018F
Bucharest Office Sub-markets
*The updated stock include buildings Class A&B, built after 2000
Sub-market Stock (sq m)Average rent
(Euro/sq m/mth)
1. CBD 247,822 16 – 18.5
2. Center – North 127,303 15 – 17
3. Floreasca – BV 490,415 15 – 16
4. Dimitrie Pompeiu 443,567 12 – 14
5. Center – West 270,870 14 – 16
6. West 205,400 10 – 13
7. Center 203,904 15 – 17
8. East 84,500 12 – 14
9. South 95,303 10 – 12
10. North-Expozitiei 188,690 15 – 17
11. Baneasa - Otopeni 147, 182 11 – 13
12. Pipera North 174,600 10 – 12
TOTAL 2,679,556
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F
CBD
Others
Baneasa
West + Center West
Pipera North
Dimitrie Pompeiu
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
Deliveries in 2018 Key Leasing Transactions in Q4 2018
Property Submarket Size (sq m) Developer
Globalworth Campus Ph.2Dimitrie
Pompeiu28,000 Globalworth
Orhideea Towers Center-West 37,000 CA Immo
Unirii View Center 18,000 Speedwell
Day Tower Center 12,000 Day Construct
Campus 6.1. Center-West 20,000 Skanska
Property Occupier Contract type Deal size
(sq m)
Campus 6.1. Microsoft Consolidation 23,500
The Bridge 3 IBM Relocation 9,900
S-Park SAP Renewal 6,000
Orhideea Towers Thales Relocation 5,313
Grand Offices TEVA Renewal 2,000
Iride Business Park Building 2
Ezugi New demand 1,500
Green Court C Capgemini New demand 1,500
Prime rents (€/sq m/month)
€18.5
Gross take-up 2018 (sq m)
335,000
Net take-up 2018 (sq m)
150,000
Q3 2018 Vacancy
6.6%
Pipeline 2019
Property Submarket Size (sq m) Developer
The Mark CBD 25,500 S Immo
Expo Business ParkNorth-
Expozitiei38,000 Portland
Oregon Park C Floreasca-BV 24,500 Portland
Business Garden Bucharest Center-West 41,000 Vastint
The Bridge 2 Center-West 21,000 Forte Partners
Equilibrium (phase 1) Floreasca-BV 20,600 Skanska
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
Retail Projects in Bucharest by Size
Shopping Centre Density (sq m) per 1,000 Inhabitants*
Deliveries / Pipeline Romania (sq m)
7%
24%
35%
34%
Small (5,000 - 19,999 sq m) Medium (20,000 - 39,999 sq m) Large (40,000 - 59,999 sq m) Very Large (>60,000 sq m)
2018
30,000
*Including all retail formats
2019
280,0000
100
200
300
400
500
600
700
Total Stock
1,119,238 sq m
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
Schemes Announced for 2019 – 2020 in Romania (>10,000 sq m)
Largest Owners of Retail Space in Romania Prime rents (€/sq m/month)
Shopping centres
65 - 75
Retail Parks
9 – 9.5
High street
60 - 70
*Prime rents relate to a well located 100 sq m unit shop from the fashion and accessories category in leading retail assets in capital city (for retail parks – 2,000 sqm units).
Property Format Developer Size (sq m)
AFI Palace Brasov New Project AFI Europe 45,000
Iulius Mall Timisoara (Openville) Extension Iulius Grup 47,000
Festival Shopping Center New project NEPI Rockcastle 42,000
Shopping City Targu Mures New Project NEPI Rockcastle 33,000
Colosseum Retail Park Extension Nova Imobiliare 15,000
Shopping City Satu Mare New Project NEPI Rockcastle 28,700
Baneasa Shopping City Extension Baneasa Developments 25,000
NEPI23%
Iulius Group8%
Immofinanz5%
Others64%
Total Stock
3,136,000 sq m
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
Deliveries and stock in 2018 in Romania:
Total Stock Evolution - Romania (sq m) Demand in 2018
Net take-up (sq m) Renewals / Renegotiations
West & North-WestStock: 713,800 sq mCompletions: 100,000 sqm
South-WestStock: 36,600 sq mCompletions: 8,000 sqm
CenterStock: 560,000 sq mCompletions: 43,000sq m
East Stock: 51,000 sq mCompletions: 5,000 sq m
SouthStock: 497,500 sq mCompletions: 117,000 sqm
Bucharest & Ilfov County Stock: 1,943,700 sq mCompletions: 308,000 sqm
South – EastStock: 18,000 sq mCompletions: 3,000 sq m
306,000 sq m
208,000
sq m
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2011 2012 2013 2014 2015 2016 2017 2018
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
Rents by Region
Key Transactions in 2018 Pipeline 2019 (Selection)
Tenant PropertySize
(sq m)Deal Type
Sector
Auchan WdP Stefanesti 77,500 Consolidation Retail
Metro WDP Stefanesti 56,500 New lease Retail
Carrefour WdP Deva 44,000 Pre-lease Retail
Carrefour WdP Brazi 32,500Sale-lease
back/preleaseRetail
P&G WdP Tmisoara 30,100Renewal+extansio
nFMCG
LPP Romania Fashion
WDP Stefanesti 22,100 New lease Retail
Pepsi Hellios Phoenix 16,619 New lease FMCG
Van MoerCTP Bucharest
West15,000 Extansion Logistics
NOD CTP Bucharest 14,000 New lease Logistics
PirelliP3 Bucharest
Park10,000 New lease Automotive
Sarantis WDP Bucharest 9,800 Pre-lease Logistics
Frankische CTPark Turda 7,000 Extansion Production
Project Location Size (sq m) Type
Eli Park 1 Chitila Bucharest 20,000 New Project
WDP Buzau Buzau 20,000 New Project
CTPark Bucharest West Bucharest 45,000 New Project
CTPark Bucharest West Bucharest 22,000 New Project
CTPark Bucharest West Bucharest 100,000 New Project
WDP Stefanesti 24,500 Extension
WDP Stefanesti 35,500 Extension
Southern Industrial Park Craiova 30,000 New Project
West & North-WestRents: 3.2 – 4.0 €/sq m/month
South-WestRent: 3.0 – 3.7 €/sq m/month
CenterRents: 3.5 – 4.1 €/sq m/ month
East Rents: 3.3 – 3.6 €/sq m /month
SouthRents: 3.2 – 4.0 €/sq m/month
Bucharest & Ilfov County Rents: 3.6 – 4.1 €/sq m/month
South – EastRents: 3.3 – 3.6 €/sq m/month
Bucharest City Report Q4 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2019
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Meet the teamSilviana Petre BadeaManaging [email protected]
Capital Markets
Andrei VăcaruHead of Capital [email protected]
Office Department & TenantRepresentation
Marius Șcuta, MRICSHead of Office Department & Tenant [email protected]
Maria FloreaHead of Office [email protected]
Industrial Agency
Costin BănicăHead of Industrial [email protected]
Retail Agency
Corina StamateCenter [email protected]
Property Management
Mariana StamateHead of Property [email protected]
Development & Land
Attila PeliHead of Development & [email protected]
Business Development
Viorel OpaițBusiness Development [email protected]
Valuation
Alina Cojocaru, MRICSHead of Valuation [email protected]
Project & Development Services
Cezar FloreaLEED Green Associate &BREEM International AssessorHead of Project&Development [email protected]
Research & Consultancy
Andrei DrosuSenior [email protected]
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