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Real estate: Analysis: Industrial investments migrate to South-Eastern Romania

November 24, 2021

Industrial constructions register a 6% drop at national level and there is an investment migration toward South-Eastern Romania, probably because of the labor force available in that area, according to an analysis by Victa.ro, a sales assistance website for construction sites. The retail sector is one of the domains that preserves an increase of the total number of building sites.   “Industrial constructions record a 6% drop at national level and there is an investment migration to the south-east of Romania, most likely due to the labor force available in that area,” a Victa.ro analysis shows. Investors in the construction market show interest in the industrial field, based on the demand for storing areas and logistic. However, in semester 1, 2021 the evolution curve went downward. If we analyze the first 6 months we see a 5.72% drop in 2021 compared to the previous year, Victa.ro shows.   South-Eastern Romania is one of the few areas which recorded increases in the analyzed period. Compared to results in the first half of 2020, South-Eastern Romania increased by 7.4% the number of industrial projects, from 312 investments to 335 in 2021, according to Victa.ro.   However, the North-Western area remains the best represented ,with 503 industrial projects in the first 6 months of 2021. Although the number of investments dropped by 11.8%, the result indicates that area of the country continues to attract investors with multiple opportunities.   Favorable evolutions were registered in Bucharest-Ilfov (increase by 5.8% from 208 investments in semester 1, 2020 to 220 in the same period of 2021) and Center area (5.2% increase from 345 investments in 2020 to 363 in 2021). About half of overall projects identified and monitored by Victa.ro in the first 6 months of the year are included as storage areas.   Most projects are in the approval stage. About half of projects identified in the analyzed period (43%),more exactly 1,120. In the sector of projects under construction there are 461 investments (18% of total), a slightly dropping figure compared to the same period of the previous year when there were 550 such projects. The number of completed projects has grown considerably.   According to Victa.ro, 22% of overall investments were analyzed. More exactly, 579 investments, compared to 322 in the first 6 months 2020. Projects under completion (3% of total), under design (2% of total) and intention (1% of total) have had the worst situation.   The retail sector is one of the fields preserving a growth in the evolution of the number of building sites. We find an advance of 8.19% from 1,135 projects announced in 2020, to 1,228 identified in the first 6 months of 2021. June was the most productive months in this case (389 monitored sites), followed by April 2021 with 219 sites monitored and May with 184 sites monitored.   Although slightly dropping compared to the previous year, the north-western area remains a magnet for retail investments. There were 214 such projects, 6.55% fewer than in 2020. The north-eastern area is also dropping this year, with a difference of -3.68% compared to 2020 (from 163 projects to 157 in 2021).   At considerable distance in the preference top we find showroom investments (89 investments identified and monitored by IBC Focus research team in the period analyzed) while supermarket type investments rank third (72 investments).   An important aspect pointed out is the fact that 19% of retail projects in the first 6 months of the year were in construction at the moment of the analysis and 19% were completed. We are talking about 232 sites under construction and 229 completed.   This value indicates an increase compared to the number recorded in 2020, when 128 investments were completed. However, despite the high optimism indicated from the perspective of projects under construction, investments to be authorized are the most numerous. In the first 6 months of 2021 we had 567 authorized projects, 46% of building sited monitored by Victa.    

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