Growth, Location, and Sustainability Shine

Romania's Industrial and Logistics Sector Emerges as a CEE Powerhouse

The logistics and industrial real estate sector in Romania continues to thrive, demonstrating its resilience and dynamic growth within the Central and Eastern European (CEE) region. According to the latest report from Colliers, titled "ExCEEding Borders: Manufacturing and Warehousing sector in CEE-12,"Romania's modern industrial and logistics facilities reached an impressive 6.3 million square meters in the previous year.

This achievement cements Romania's position as the third-largest player in the I&L market among the 12 leading CEE economies. Furthermore, the report highlights that developers in Romania are actively working on an additional 650,000 square meters of modern industrial and logistics facilities, signaling a robust pipeline of projects to meet the growing demand in the country. One significant driver of this remarkable growth is Romania's strategic location, which positions it as a vital regional distribution hub for companies targeting the Southeastern part of Europe.

Some companies have even established local dealerships to tap into larger areas, demonstrating the nation's increasing importance in the broader European logistics landscape. Additionally, concepts like re-shoring and friend-shoring are contributing to the rising demand for logistics and industrial space in Romania. While Bucharest and other industry-intensive regions such as Transylvania, Prahova, and Dolj account for the majority of Romania's modern industrial and logistics stock, the report highlights the rapid ascent of regional cities.

Favorable labor market dynamics in these areas have fueled increased consumption and, consequently, new opportunities for logistics and industrial development. This growth trend aligns with the broader European market, where the share of capital cities in the total industrial and logistics stock is significantly lower than in Romania. In terms of sector concentration, Romania's manufacturing landscape is dominated by the automotive industry, which accounts for at least a quarter of the country's industrial production. Major car manufacturers like Dacia and Ford operate in Romania, supported by a multitude of car part producers supplying products for vehicles assembled both locally and across Europe.

These production facilities are primarily clustered around cities like Ploiesti, Pitesti, Craiova, and various parts of Transylvania. Notably,Belgium's Avesta Battery and Energy Engineering (ABEE) recently announced a substantial EUR 1.4 billion investment in a battery factory for electricity grids in Galati, marking one of the most significant greenfield investments in Romania's history. Despite the thriving industrial and logistics sector, vacancy rates for prime warehouse spaces in Romania remain at around 6%, slightly above the CEE-12 average. Furthermore, sustainability and energy efficiency have emerged as key focal points for the Romanian industrial and logistics market.

Local participants are keen to enhance energy efficiency, recognizing that the long-term benefits outweigh short-term cost increases. Romania's EU membership status and the presence of large international tenant companies have elevated the market's focus on Environmental, Social, and Governance (ESG) principles. Implementing sustainable practices in warehouses and production facilities is seen as critical for reducing environmental impact, achieving cost savings, ensuring regulatory compliance, enhancing reputation, managing risks, and capitalizing on market opportunities.

In conclusion, Romania's industrial and logistics sector is a shining star within the CEE region, driven by its strategic location, diverse manufacturing landscape, and growing emphasis on sustainability. With robust growth prospects and increasing attention from investors and tenants alike, Romania is poised to continue its ascent as a pivotal player in the European logistics and industrial real estate market.

Are you ready to explore unparalleled opportunities in the heart of Ploiesti's thriving industrial landscape?

Contact us at contact@ploiestiwestdevelopment.ro to learn more about the second-largest business development in Ploiesti.

With exceptional connectivity, a strategic central location, access to a skilled workforce, a business-friendly environment, and continuous infrastructure development, Ploiești is poised to be your gateway to success in the logistics and industrial sectors.

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