Avison Young in Bucharest
Avison Young is a global real estate advisor built to create real economic, social, and environmental value, powered by – and for, people. We believe there is a vital role for our sector in creating healthy, productive workplaces for employees; cities that are centres of prosperity for its citizens and; built spaces and places that create a net benefit to the economy, the environment and the community. Our people organize around our clients’ opportunities and work as colleagues to focus on their success.
Bucharest, the capital of Romania, is the 4th largest city in the European Union and the largest in the CEE region, with approx. 2.1 million inhabitants. The city accounts for more than 22% of the country’s GDP and around 25% of its industrial production. It is the most developed city in Romania and the 1st university center in the country, with over 172,000 students. Having an outstanding internet speed connection, Bucharest has recently been recognized as the best city in the world for gaming. Offering a highly skilled multicultural labor force and competitive costs, the region has become a key destination for Computers High-Tech & Communication and BPO companies such as Oracle, HP, Microsoft, IBM, Ericsson, Luxoft, Vodafone, Orange, Genpact or Stefanini. The country’s post-recession economic stability has had a positive impact on all asset classes, positioning Romania as one of the most vibrant commercial real estate markets in the CEE region.
Class A and B office space in Bucharest exceeds 3 million sq. m and is divided between eleven submarkets, the largest areas in terms of office stock being Pipera South, Barbu Vacarescu - Floreasca and Central West. While the first modern office buildings were completed in the early 2000s, most of the office stock has been developed in the last fifteen years. Being one of the most attractive office locations in the CEE region due to a series of factors such as competitive occupational costs, skilled labor force, high internet speed connection and an affordable cost of living, demand for office space has been strong, with net take-up exceeding 1.2 million sq. m in the last five years. Computers High Tech & Communication and Outsourcing services companies have been the most active office occupiers. Overall, office investment is dominated by institutional players, with some portfolios exceeding €1 billion in assets.
As a NATO and an EU member state, having a strategic location being situated at the crossroads of Central, Eastern and Southeastern Europe, Romania has become a key destination for large production companies such as Renault, Continental, Ford, Daimler AG, Dräxlmaier, Bosch, Procter & Gamble or Unilever. Overall, the Romanian industrial and logistics market has witnessed constant growth in recent years, both in terms of demand and supply. The modern industrial and logistic stock developed on a very fast pace starting 2016 and currently exceeds 4.5 million sq. m. Bucharest accounts for 50% and is the most important industrial and commercial hub in the country. Being well developed in terms of infrastructure, the city offers a very good connectivity with all the other Romanian regions and has attracted a series of private investments, represented mainly by production and logistics facilities. In general, demand for industrial and logistics spaces in Bucharest comes from retail and logistics/ distribution companies, that are occupying most of the existing stock and continue to be the main driver for development.
Romania receives strong interest from international investors seeking alternatives to the low returns offered by mature Western European markets and the high risks associated with Eastern European countries that are not part of the European Union. The total real estate investment volume recorded in the last ten years amounts over 7.1 billion euros, with Bucharest attracting more than 50%. Office and retail properties have been the most traded assets, while industrial and logistics facilities have started to catch investors’ interest beginning 2014.
Bucharest accounts for ~ 30% of Romania’s retail stock, with around 1.2 million sq. m of modern retail spaces. The first shopping center in the country has been delivered here and the city is the favored location for retailers looking to open their first store in Romania. With existing supply comprising of shopping centers, retail parks and commercial galleries, Bucharest’s modern retail space density is of 550 sq. m per 1,000 inhabitants. Overall, dominant shopping centers have a yearly footfall between 14 and 20 million visitors, while their occupancy rate is close to 100%. The retail warehouse sector has also a significant presence in Bucharest, with diverse occupiers that include national and international DIY chains, discounters and hypermarkets, along with furniture, fashion, sport, shoes, cash and carry operators, outlet centers and other big-box retailers. Although currently Romania is lacking a well-established high street destination, Bucharest is the only city that offers alternatives for shoppers looking to acquire luxury products.