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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


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


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


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


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


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


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


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



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


Jones Lang LaSalle Services SRLVictoria Center145 Calea Victoriei, 10th FloorBucharest, RomaniaTel: +40 (0) 21 302 3400

_________________________www.jll.rowww.jll.comwww.officefinder.rowww.cautabirouri.ro

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]

© 2018 Jones Lang LaSalle IP, Inc. 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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