Only two medium sized office buildings were completed in the second quarter of the year in Bucharest, totaling 7,800 sqm, according to Jones Lang LaSalle’s (JLL) most recent Bucharest City Report . The office supply completed in the first half of the year reached about 80,000 sqm.

However, several other projects are expected to be completed in the second half of the year, “among which, Floreasca Park of 37,500 sqm, is the most advanced from a construction point of view,” reads the report. Also, “other projects expected in 2013, may be postponed to 2014 in case of a persistent lack of demand, respectively pre-leases”.

In the second quarter of 2013, total gross take-up reached 59,000 sqm, in 45 contracts, while the total leasing activity in H1 reached 123,000 sqm, similar to first half in 2012, according to JLL. The prime headline rent remained unchanged over the last 12 months, at EUR 18.5 per sqm per month.

The second half of this year’s pipeline has been revised down to 40,000 - 50,000 sqm, according to JLL’s report, while the pipeline for the next two years, namely 2014-2015, is estimated at 180,000 - 200,000 sqm, with some projects estimated to be completed in 2014 but, “due to the large volume, we are of the opinion that delivery may easily slip to 2015”.

On the retail market, no modern shopping center was delivered in Romania in the second quarter of the year. The modern shopping center stock is estimated at 850,000 sqm in Bucharest and at 1.5 million sqm in the rest of the country.

According to JLL’s report, the most notable retail transaction announced in Q2 2013 was the takeover of Bricostore by UK-based Kingfisher group. The stores will be rebranded Brico Depot and Kingfisher plans to increase the network to 50 stores in medium term. Moreover, Roberto Cavali’s flagship store opened in the shopping gallery attached to the JW Marriott 5-star hotel, which “reconfirms the preference of the luxury retailers for shopping galleries attached to up market hotels’ instead of high street retail locations,” reads the report.

However, the rent for both prime shopping centers and prime high street units remained at EUR 55 - EUR 65 per sqm per month.

“Currently, Bucharest’s retail pipeline for 2013 and 2014 is estimated at around 60,000 sqm, consisting of two retail schemes, Promenada Mall and Vulcan Value Center,” reads the report.

On the industrial market, two major production facilities were opened in Romania in Q2 2013. In June, the facility of Lufkin Industries Oil Field Division, was officially opened within Ploiesti West Park, while in the same month, a second project also opened officially in Eurobusiness Industrial Park in Oradea.

In the second quarter of the year, gross take-up in Romania totaled approximately 52,000 sqm, while in the first half of 2013, the gross industrial take-up activity registered a record level of 145,000 sqm, around four times higher over the same period last year.

According to JLL, “Romania is increasing in importance as manufacturing hub, especially attracting automotive related foreign direct investments.”

As at June 2013, Bucharest’s hotel market consisted of 77 hotels with about 9,500 hotel rooms.  “The city’s hotel market is highly corporate led and is therefore well supported by 4-star hotels, which account for 60 percent of the entire hotel room stock,” according to JLL’s report. The 5-star hotels constitute 22 percent, while the 3-star segment 18 percent of the total room stock supply.

Irina Popescu, irina.popescu@romania-insider.com