Built-to-suit and relocations to dominate industrial real estate market, report shows

New developments of logistics properties in 2011 will continue to be dominated by build-to-suit schemes, due to financing constraints while also being limited to pre-lets rather than speculative building , according to a recent report by King Sturge. “Rental levels will remain between EUR 4 and EUR 4.25 per sqm per month and the vacancy rate will drop very softly from 15 percent to 14 percent. Besides the pre-let transactions, the trend for take up will be triggered more by relocations and less by expansion purposes. The modern stock in Bucharest will reach one million sqm in 2011,” said Irina Iliescu, senior industrial negotiator for King Sturge Romania. The demand on the market will come from a few new market entries, most of them coming from the automotive and electronics industry, together with their suppliers and third party logistics. Also, among buyers there will be those who want to buy industrial land on the A1 highway and in the Bucharest proximity. Several manufacturers which have recently entered the Romanian market are expected to deliver their production facilities: Lufkin Industries and Toro in Ploiesti, Plexus in Oradea, Valeo near Timisoara, Rochling-Automotive in Oarja, Pitesti. This is seen as a recovery for the Romanian industrial market. Alex Camburu, alex.camburu@romania-insider.com