CBRE Craiova Real Estate Report A4 Bleed 5 v3

Comments

Transcription

CBRE Craiova Real Estate Report A4 Bleed 5 v3
CRAIOVA
Real-Estate Overview
CBRE RESEARCH
Photo source: Craiova City Hall
Craiova, a secret resource of specialised talent
Craiova is the Romania's 6th largest city and capital of Dolj County, situated in the Southern part of the country. Craiova is the most
important city of Oltenia region.
With its population of 293,567, Craiova is one of the largest cities in Romania.
The city is an important educational centre: 20,088 students are attending one of the 120 specializations of the Craiova University.
The university has a very good Faculty of Automation, Computers and Electronics.
FIGURE 1: CRAIOVA HIGHLIGHTS
6 th
Largest City
in Romania
293,567
Craiova
Population
83,000
sq m
Retail Stock
sq m
30,000
6,346
EUR
GDP per Capita
704,097
Dolj
Population
CBRE - Craiova Real Estate 2015
20,088
Student
Population
3
Craiova is a candidate to become European Capital of Culture in 2021 and in the run-up to the selection process several investment
programs have been initiated. In 2007, Sibiu, another Romanian city was European Capital of Culture. The city benefited greatly
from the investments tied to its successful candidacy. Most investments, including significant infrastructure upgrades have
contributed to sustainable economic growth in the city in the years after it was European Capital of Culture.
Craiova is Romania's 6th largest city and capital of Dolj County, situated in the Southern part of the country. Craiova is the most
important city of Oltenia region. The population of Craiova, Romania is 307,022 according to the National Institute of Statistics.
Craiova is an important educational center, with 20,088 students attending one of the 120 specializations of Craiova University every
year. The university has a very good Faculty of Automation, Computers and Electronics, thus providing qualified workforce for the IT
sector. Foreign languages, in particular English, Spanish and French are widely spoken in Craiova.
It is very important to notice that with the current plans of improving road infrastructure, Craiova has the right ingredients to
become a viable destination. Available workforce,
University with technical specialisations, international airport, existing ring road and the know how in different industries are the
ingredients that make Craiova attractive.
Apart from the possible automotive suppliers which could come in the region, Craiova could attract companies from the
aeronautical segment thus taking advantage of local knowledge in this field.
Craiova can be reached easily by air: the city is served by Craiova Airport with scheduled flights to amongst others London, Barcelona
Bologna, Milano, and Rome, but Bucharest and the Sibiu airports are not very far away either. The city has a good road connection
with Bucharest (cc. three hours drive) and the Western border town of Arad, and there are plans for building a highway between
Bucharest and Calafat: in this case, Craiova could be reached from Bucharest by car in less than two hours, connecting Romania
border crossing with Serbia and Bulgaria. There is also train and bus connection to the city and daily trains with service from Craiova
to: Bucharest (3 hours), Brasov (6 – 8 hours - via connecting service), Cluj-Napoca (8 – 10 hours - connecting service), Sibiu (4 – 7
hours), and Timisoara (5 hours).
Permanent Resident Population:
• County: 704,097
• Craiova: 293,567
COMPARISON WITH SIMILAR CITIES:
FIGURE 2: AVERAGE MONTHLY NET INCOME EVOLUTION
CITY
2012
2013
2014
2015 (F)
2016 (F)
2017 (F)
Romania
338 EUR
357 EUR
373 EUR
397 EUR
422 EUR
443 EUR
Bucharest
496 EUR
531 EUR
555 EUR
581 EUR
603 EUR
626 EUR
Craiova
307 EUR
318 EUR
332 EUR
347 EUR
360 EUR
372 EUR
Iasi
308 EUR
329 EUR
346 EUR
362 EUR
375 EUR
387 EUR
FIGURE 3: GDP PER CAPITA
CITY
2012
2013
2014
2015 (F)
2016 (F)
2017 (F)
Bucharest
15,774 EUR
16,717 EUR
17,530 EUR
18,660 EUR
19,696 EUR
20,917 EUR
Craiova
5,160 EUR
6,022 EUR
6,800 EUR
6,800 EUR
7,232 EUR
7,750 EUR
Iasi
5,070 EUR
5,388 EUR
6,024 EUR
6,024 EUR
6,376 EUR
6,809 EUR
Source: National Committee of Prognosis
The unemployment in Craiova is 9% (versus 6.5% in Romania). Whilst the western part of Romania is increasingly facing labour
shortages, investors are increasing looking to secondary cities such as Iasi and Craiova, where ample and cheaper
labour is still available.
4
CBRE - Craiova Real Estate 2015
Photo source: Boldir Victor Catalin
CBRE - Craiova Real Estate 2015
5
Craiova
Office Market
OFFICE MARKET:
Romania holds its position as home to
more offshore and nearshore centers
than any other SEE country, thanks to
offering a perfect balance between cost
and quality, a flourishing technology
hub and abundance of professional and
multilingual labour pool.
CRAIOVA - A NEW DESTINATION
FOR OUTSOURCING COMPANIES
With competition for talent on the rise
in cities like Bucharest, Timisoara and
Cluj, which were initial targets of this
sector, other university centers such as
Craiova increasingly come into the
spotlight.
Craiova is a talent pool generator for the
southern part of the country, thanks to
its higher education institutes. The city
is a more affordable alternative for
investors to either Bucharest or
Timisoara, benefiting from good
transport routes from all main business
areas of the country.
The demand for office space in Craiova
is generated especially by
financial-banking sector, BPO (Business
Process Offshoring), SSC (Shared
Services Center) and automotive
6
companies. Some of the most renowned
companies present in Craiova are Star
Storage, Telus International, IT Six
Global Services, Iquest Technologies,
Comdata, E-mag Pirelli, Netdania,
Keppler Rominfo. Such tenants are
looking for A and B class office schemes
with a very good IT infrastructure.
The number of people employed in the
IT&C companies is expected to increase
in the next period; today almost 3,000 of
employees are working in Craiova for
this segment.
The Craiova Office Market has a
relatively new history of around 5 years,
with substantial development
happening in the period 2010 – 2013.
The modern office stock is estimated to
be 30,000 sq m of class A and B, which
is equivalent to almost 1% of the
Bucharest office stock – with 14% of
Bucharest’s population. The gross
rentable area of the biggest office
building is 7,000 sq m, while the
majority of the office buildings have a
rentable area which varies between
1,000 – 2,000 sq m. The development
and growth of tenants in Craiova is
curbed by the lack of sufficient Class A
and B office stock.
For this year and next year there are over
7,000 sq m under construction in the
semi-central area all developed by local
entrepreneurs/local private investors.
In 2013 the local authorities delivered
Centrul Multifunctional, with a rentable
area of 12,600 sq m and 220 parking
spaces. Centrul Multifunctional covers:
exhibition area indoor and outdoor, a
conference hall and office space. This
year 3 other buildings will be delivered
in the same project with a total rentable
area of 4,200 sq m and 131 parking
spaces.
The overall vacancy rate for class A and
B in Craiova stands at around 18%,
whereas the vacancy rate for class A
office buildings is estimated at 6%.
Prime office asking rents in Craiova vary
from 10 to 12 EUR/sq m/month for
Grade A and stand between 6 to 10
EUR/sq m/month for Grade B office
buildings.
2015 started off with more intense
feedback from international companies
looking to expand their current
operations in Craiova, as well as new
companies looking at opening SSC or
BPO divisions. Qualified, professional
and cheap labour, attractive state
incentives for IT segment and
real-estate costs are motivating business
growth in this area and increasing
investors’ interest.
CBRE - Craiova Real Estate 2015
Source: Malmo
FIGURE 4: LOCAL REAL ESTATE INDICATORS
1
Modern Office Stock (sq m)
30,000 sq m
2
Vacancy Rate
18%
3
Headline rent – Class A
10 - 12 (EUR/ sq m/ mth)
4
Headline rent – Class B
6 - 10 (EUR/ sq m/ mth)
5
Service charge
3 (EUR/ sq m/ mth)
Source: CBRE Research
CBRE - Craiova Real Estate 2015
7
FIGURE 5: EXAMPLE OF EXISTING OFFICE BUILDINGS IN CRAIOVA
8
CBRE - Craiova Real Estate 2015
INDUSTRIAL HERITAGE
Oversized industrial areas were
constructed during the communist
period in Craiova municipality and Dolj
County, nowadays 25% of urban land
area is being occupied by industrial
units.
After the year 1990, the transition to a
market economy and the investors’
reluctance to develop projects inside the
industrial areas has gradually led to the
emergence of some derelict industrial
areas. The brownfields areas with
redundant infrastructure and buildings
continue to be in place, currently the
single reconversion worth mentioning
is the Electroputere Parc Craiova set in a
former production facility of
Electroputere, which is a train engine
and tram factory.
Previously Dolj County was the
centre of railway and automotive
industry, but also an important
agricultural producer. Currently, these
sectors continue to dominate the local
economic image of this county, but not
at the same scale. Secondary industries
are: aeronautics, food and beverages,
textile, chemical.
CBRE - Craiova Real Estate 2015
“The sixth largest city of Romania, Craiova, has
the greatest development potential in top 10.
With a strong industrial history and two
universities, Craiova has a diversified and skilled
workforce, but also a job market which is still
unable to absorb it. Recently, local authorities
put great efforts in developing the city
infrastructure and creating facilities for
investors. This policy is meant to reverse the
unemployment trend, to retain the local talents,
but also to exploit the workforce potential of the
entire Oltenia region.”
George Paunescu, Branch Manager
Manpower Romania
9
Craiova
Industrial
INDUSTRIAL HERITAGE
Oversized industrial areas were
constructed during the communist
period in Craiova municipality and Dolj
County, nowadays 25% of urban land
area is being occupied by industrial
units.
After the year 1990, the transition to a
market economy and the investors’
reluctance to develop projects inside the
industrial areas has gradually led to the
emergence of some derelict industrial
areas. The brownfields areas with
redundant infrastructure and buildings
continue to be in place, currently the
single reconversion worth mentioning
is the Electroputere Parc Craiova set in a
former production facility of
Electroputere, which is a train engine
and tram factory.
Previously Dolj County was the
centre of railway and automotive
industry, but also an important
agricultural producer. Currently, these
sectors continue to dominate the local
economic image of this county, but not
at the same scale. Secondary industries
are: aeronautics, food and beverages,
textile, chemical.
10
NOWADAYS INDUSTRIAL
SECTOR
who produce locomotives and electric
trains.
The largest industrial occupier in Dolj
county is Ford, which manufactures
engines in Craiova and assembles
B-Max model. In 2014 the American car
manufacturer contributed nearly 24% to
the county’s car turnover. In total there
are nearly 17,000 companies active in
the county.
As seen before, one of Dolj’s county
major problems is the lack of road
connectivity, this is why Ford is not
producing at full capacity at the
moment and automotive suppliers are
not too eager to invest here. The only
few suppliers present here are
producing exclusively for Ford, they
have located their production facilities
inside Ford’s platform by refurbishing
some of the buildings there. They chose
not to invest into a greenfield facility,
but took into consideration a short
term, in sincronicity with the strategy of
the American company. Considering the
lack of interest from manufacturers,
major industrial developers were not
eager to invest here.
Ford had recently announced it might
launch in the second half of 2017 a
second assembly line in Craiova for the
SUV EcoSport, a Craiova Industrial
decision is expected to be taken in the
coming months.
They will take into account the highway
infrastructure improvements and also a
possible new state aid scheme. The
automotive suppliers present in Dolj
county are: Automotive Prod Service,
BBB Fasteners, Cooper Standard,
Electrical Mechanical Wirings, Faurecia,
Craiova, H&L, Hella Romania, Craiova,
Johnson Controls Romania, Kautex
Textron, Kirchhoff Automotive, Magna,
Micar, Siemens-Yazaki, Yazaki Caracal.
Railway industry in Craiova tradition is
continued today by Sofronic, a company
controlled by Romanian entrepreneurs
The only existing private industrial park
is Cassia Park Craiova, a small B class
distribution platform where small
companies based their distribution or
storage centres. Dolj county council
decided in 2004 to create a state owned
industrial park which could offer SME
and major companies the right and
attractive conditions for building their
own facilities. Parc Industrial Craiova is
now being fully occupied.
CBRE - Craiova Real Estate 2015
Photo source: WDP Romania
Source: 4Tuning
FIGURE 6: LOCAL REAL ESTATE INDICATORS
No
Industrial Park
1
Modern Industrial Stock-Developer led
Developer/Owner
2,400 sq m
2
Vacancy Rate
0%
3
Prime headline rent
4 (EUR/ sq m/ mth)
4
Office space rent
6 (EUR/ sq m/ mth)
5
Service charge
0.5 (EUR/ sq m/ mth)
Source: CBRE Research
CBRE - Craiova Real Estate 2015
11
FIGURE 7: MAJOR INDUSTRIAL PARKS IN CRAIOVA
12
CBRE - Craiova Real Estate 2015
„When planning a new production facility in Europe, Ford selected
Craiova mainly because of the availability of a qualified labour force with
a long tradition of automotive production (initially Oltcit was produced in
the city later Daewoo) at very competitive terms compared to other
European markets.
Our choice has proven to be the right one as our Craiova factory is very
efficient and competitive in Europe. This major proven competitiveness
together with the availability of a competent and low cost labour market
offers major opportunities for growing in the near future by adding new
product and related investment, generating additional supplier
investment and other indirect business investment in the Craiova region.’’
Jan Gijsen,
President Ford Romania
CBRE - Craiova Real Estate 2015
13
Craiova
Retail
14
1,200
1,000
800
600
400
200
Timisoara
Braila
Craiova
Cluj Napoca
Brasov
Arad
Iasi
Bucharest
Oradea
Ploiesti
0
Constanta
The local market includes various types
of shopping centers: from one raised
back in 1975 and refurbished in 2002 Mercur, located in the city center, to a
hypermarket-led scheme - Auchan
Due to its size and location Craiova has
the potential to attract new retails and
investors. During the booming years
two other centers were announced in
the city (Westgate and Adora Mall). Both
schemes were abandoned when Auchan
decided to choose for Electroputere
Parc. As Electroputere Parc is well
located and has a dominant size
combined with extension potential, it is
unlikely that a new shopping center
development will materialize in the near
future.
FIGURE 8: RETAIL DENSITY PER CITY
Targu Mures
SHOPPING CENTERS
OUTLOOK
Among the most important retailers
present in Craiova we can name: Zara,
Stradivarius, Bershka, Pull&Bear,
Deichmann, C&A, LC Waikiki, Flanco,
Domo, Media Glaxy, Decathlon, dm,
Sibiu
A larger part of the on street retail stock
is located at the ground floor of old
historical buildings located mainly in
the city center (bordered in the North by
A. I. Cuza Street, in East by Aries Street,
in the South by Mihail Kogalniceanu
Street and in the West by Unirii Avenue.
Other important arteries in terms of on
street retailing are Bucuresti and
Severinului avenues. The refurbishment
of the old city center is almost
completed and that is likely to boost the
high street retail especially on Lipscani
and Romania Muncitoare streets as well
as on the neighbouring pedestrian
streets.
Pitesti
HIGH-STREET
Suceava
Although Craiova is the largest city in
Southern Romania not taking into
account Bucharest, the modern retail
was until the recent years represented
mainly by big box units located
throughout the city. The development
of the retail sector in Craiova followed
the same pattern as in other similar
cities with approx. 300,000 inhabitants
with big box retail first and shopping
centers opened afterwards.
Douglas, H&M, Intersport, McDonald’s,
KFC. Food retailing is well represented:
Auchan, Billa, Lidl, Penny Market,
Kaufland, Carrefour Market. DIY sector:
Praktiker, Dedeman, Leroy Merlin.
Craiovita, located in the Western part of
the city (2006) and a modern scheme Electroputere Parc (approx. 70,000 sq
m, late 2011), located in the
Central-Eastern part of the city. The
total modern shopping center retail
stock in Craiova is of only 83,000 sq m,
resulting some 300 sq m / 1,000
inhabitants lower even than in Brasov
that has some 460 sq m / 1,000 inhabitants.
The occupancy rate is high (over 95%)
with only two operational schemes in
Craiova. The rents are in range with the
levels registered for similar cities in size
and potential.
Sq m / 1,000 inhabitants
RETAIL MARKET
CBRE - Craiova Real Estate 2015
Source: electroputeremall.ro
“We are pleased with our operations in Craiova. I think it's a city with
great potential. Auchan store model is well adapted to local consumers and
responds to a very large extent to the their needs and expectations, through
its product variety, great value for money and service, all excellent. We
expect economic growth both in Craiova and in the region; we can already
see that our two stores are growing faster than others in more mature
markets such as Bucharest. We are pleased to be part of that future.’’
Frederic Bellon,
CEO of Auchan Romania
FIGURE 9: MAJOR RETAIL SCHEMES IN CRAIOVA
No
Retail Scheme
GLA (sq m)
Type
Owner
1
Electroputere Parc
70,000
Shopping Center
K&S Development
2
Auchan Craiovita
13,000
Shopping Center
Immochan
3
Mercur
20,000
Shopping Center
Local businessmen
Source: CBRE Research
CBRE - Craiova Real Estate 2015
15
FIGURE 10: EXISTING RETAIL SCHEMES IN CRAIOVA
16
CBRE - Craiova Real Estate 2015
Source: electroputeremall.ro
‘‘Electroputere Park is the shopping destination in Craiova with an existing
rentable area of almost 70,000 sq m that is currently expanding successively
with further 5,000 sq m and 25,000 sq m. The expansion is the result of the
highly performant business of the center so far, of the request from tenants
to either increase the sales area or to enter the center and of the request
from consumers for more retail offer. We are happy to say that
Electroputere has a regional span, attracting people from all over the
county. Electroputere hosts more than one million people every month.’’
Steven Van Den Bossche,
Managing Partner BelRom
CBRE - Craiova Real Estate 2015
17
OFFICE
METHODOLOGY & DEFINITIONS
Prime Rent - represents the top
open-market tier of rent that could be
expected for a unit of standard size
(commensurate with demand in each
location), of the highest quality and
specification and in the best location in
a market at the survey date. The Prime
Rent should reflect the level at which
relevant transactions are being
completed in the market at the time,
but need not be exactly identical to any
of them, particularly if deal flow is very
limited or made up of unusual one-off
deals. If there are no relevant
transactions during the survey period,
the quoted figure will be more
hypothetical, based on an expert
opinion of market conditions.
Vacancy Rate - represents the
percentage ratio of total vacant space to
stock.
Total Stock – represents the total
completed space (occupied and vacant)
in the private and public sector at the
survey date. Includes owner occupied
space.
Business Process Outsourcing (BPO) – a
specialized organization that provides
specific business functions (or
processes), usually non-production ones
to third parties.
Shared Service Centre (SSC) – a
separated part of an enterprise that
provides a service to an organization or
group where that service had previously
been found in more than one part of the
organization or group. The funding and
resourcing of the service is shared and
the providing department effectively
becomes an internal service provider.
Knowledge Process Outsourcing (KPO) –
a form of outsourcing, in which
knowledge-related and
information-related work is carried out
by workers in a different company or by
a subsidiary of the same organization,
which may be in the same country or in
an offshore location to save cost. This
typically involves high-value work
carried out by highly skilled staff.
INDUSTRIAL
METHODOLOGY & DEFINITIONS
Prime headline rent (in Euro per sq m)
represents the top open-market tier of
rent that could be expected for a unit of
standard size commensurate with
demand in each location, of highest
quality and specification and in the best
location in a market at the survey date.
For the purposes of this report, a unit of
standard size is assumed to be around
2,000 sq m GLA.
Vacancy Rate - (in sq m) represents the
total net lettable (or rentable) floor
space in existing properties, which is
physically vacant and being actively
marketed at the survey date. Prime
headline rent (in Euro per sq m)
represents the top open-market tier of
rent that could be expected for a unit of
18
standard size commensurate with
demand in each location, of highest
quality and specification and in the best
location in a market at the survey date.
For the purposes of this report, a unit of
standard size is assumed to be around
2,000 sq m GLA. Effective rent – an
average rent over the whole lease period
which includes tenant’s incentives.
Build-to-suit (BTS) – a non-standard
warehouse or industrial scheme
designed according to specific tenant’s
requirements regarding size, location
and building standards. The design is
based on the client’s technology
process. The projects are usually
dedicated for one tenant, newly built or
after general refurbishments. BTS
projects are more and more popular,
especially for production companies.
Clients preferring BTS investments over
constructing their own buildings, limit
the risk by choosing an experienced
developer, shorten the time necessary
for the development process and reduce
the development cost by using the
developer’s resources. Lease
agreements are more advantageous
than the construction of a company’s
own facilities, mainly because such
projects do not require the involvement
of their own capital and provide
flexibility for future extension or
relocation.
CBRE - Craiova Real Estate 2015
Contacts
CBRE
Razvan Iorgu
Managing Director
+40 21 313 10 20
[email protected]
Gjis Klomp
Head of Capital Markets
+40 21 313 10 20
[email protected]
Walter Wolfler
Senior Director
Head of Retail CEE CBRE GmbH
t: +43 1 533 40 80 97
e: [email protected]
Joerg Kreindl
Senior Director
Head of Industrial CEE
t: +48 22 544 8006
e: [email protected]
Mike Atwell
Senior Director
Head of Capital Markets CEE
t: +48 22 544 8070
e: [email protected]
Laura Dumea-Bencze
Head of Research Romania &
CEE Research Analyst
t: +40 21 313 10 20
e: [email protected]
Tudor Muntean
Research Analyst
t: +40 21 313 10 20
e: [email protected]
Daniela Gavril
Research Analyst
t: +40 21 313 10 20
e: [email protected]
Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be
reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation
about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented
exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.
20
CBRE - Craiova Real Estate 2015

Similar documents