Briefing Bucharest: Logistics in Romania set to ‘explode’

The logistics sector is already doing well in Romania but e-commerce will make it ‘explode’ as the infrastructure improves, experts agreed at Real Asset Media’s CEE Outlook Investment Briefing, which was held in Bucharest last week.

‘There has been significant take-up in the last three years despite the challenges, but with a little help from more infrastructure it could really explode’, said Ana Dumitrache, Romania, Country Head, CTP. 

E-commerce has been growing at rate of 25% a year off a very low base, said Laurentiu Lazar, Managing Partner, Romania, Colliers International, and the retail market is growing fast as well, so there is a lot of room for logistics to develop.  It is only lack of infrastructure holding it back.

Outlook 2019 CEE panel, Bucharest, February 2019

‘We have had a 40% increase in logistics stock,’ he said. ‘In the last two years the stock has increased from 3 mln m2 to 4.5 mln m2 without any significant investment in infrastructure, so if that comes the development could really take off’.

‘There is a lot of potential for e-commerce to grow, we are just beginning to catch up with the rest of Europe,’ said Dumitrache. ‘I was talking to a couple of big retailers who dominate the market in Romania but they do very little e-commerce because of the difficulties in getting things to customers. We cannot have e-commerce without the roads to deliver the goods’.

E-commerce will take off in Romania as it has done elsewhere, it is only a matter of time, saidDavid Hay, Partner, ADD Value Management: ‘Millennials will only want to buy online, so my prediction is that the dominant shopping centres will survive, but the smaller smalls will disappear’.

Most developments have been crowded in the Western part of Romania, Dumitrache pointed out, because the new highway has brought a much-needed link to Western Europe. 

The positive ripple effect is already evident, she said: ‘I have seen a shift in demand from pure logistics or speculative investments towards manufacturing. In January and February we have had many enquiries related to potential investments on the Western side and the main trigger has been infrastructure availability’.

Many more investments in roads and similar infrastructure are needed and an expected halt to recent increases in construction costs will help.

‘Construction costs have been rising because of the increase in prices of all materials and the decrease in the availability of skilled labour,’ said Klaus Bleckenwegner, CEO, PORR Construct Srl. ‘But now workers are coming back, thanks to factors like Brexit, a slowdown in Germany and higher salaries in Romania, so we expect a stabilisation of construction prices in the next 12-18 months’.

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