Real estate consultants believe the logistic sector will be thefirst sector of the real estate market to unfreeze as demand forindustrial space rises. Investments will be this way resumed, withinvestors being lured by the higher yields compared with retail orhousing ones, reads BUSINESS CONSTRUCT magazine.
Real estate experts believe the logistic real estate market willunfreeze starting next year, at least in terms of transactions, asdemand catches up with supply, and the rebound will be a rapid onegiven the short development period. However, project financing andthe uncertain business environment will still be the main problemnext year.
"As regards the deal-making level, we expect 2010 to be somewhatbetter than 2009, and many companies have delayed their projectsbecause of the uncertain business environment," says Viorel Opait,manager of the industrial department of ColliersInternational.
Rodica Tarcavu, heading the industrial department of DTZ Echinox isof the same opinion and expects the logistic sector to unfreezenext year.
As regards deliveries of logistic space, around 80,000 squaremetres were put to use this year, with more than half inBucharest.
No further deliveries are announced by yearend, with the supplydecline gradually leading to rising rental prices.
At present, the logistic space inventory amounts to over 900,000square metres in Bucharest and another 500,000 square metres in thecountry. The total volume of logistic spaces under various stagesof execution tops, though, two million square metres. Still, forthis year Opait believes no more logistic projects will bedelivered by yearend, with investors being somewhat more interestedin retail and office space during this period.
Amid the shrinking demand, owners of logistic space are willing tonegotiate rents downwards, with small tenants benefiting themost.
As regards prices, rents range between 4 and 5 euros per squaremetre now, but the following months' the trend largely depends onthe market's development in the last quarter. Still, rents areexpected to rise as logistic spaces get filled and the supply willremain constant.
Consultants believe investors will still focus on logistic spacedevelopment next year, mainly in Bucharest, but in the followingyears they will also take to the rest of the country.
Despite recent developments, Bucharest still has a two times lowerlogistic space stock compared with Warsaw and Budapest.
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