News

Supply of new logistic areas in 2019

31.03.2020

 

The tendency for moderate growth in the logistics properties market of Sofia sustained in the second quarter of the year with growth in construction and high demand for leasing. The newly finished projects for the last three months have a GLA of 72 500 sq.m2. In the first half of 2019, the supply of modern industrial and logistic areas increased by 4% and reached 1 006 000 sq. m. This smooth growth has been observed since 2013. After a few years of the shortage of logistical properties contributes to the future balance. As of the first half of 2019, individual properties under construction in Sofia have the GLA of 202,000 sq.m2 of which more than 40% is intended for rent. This will improve the balance between supply and demand. Industrial producers will continue to search for properties, finished bases and plots for construction, in Sofia and the country.     

     The projects completed during the period are mainly for own use, this defines the share of the free-to-rent areas to remain without a substantial change. The volume of completed projects was higher compared to the same period of 2018 years.

Stable rental levels and the relatively low share of free space determines the interest of investors. During the observed period, there is an increased investor interest from foreign investors, specialized in the construction of logistics and industrial areas.  Increasing competition will lead to a more diversified choice for tenants.

A spike in supply is expected in Bozhurishte, Novi Han and Ravno Pole, where the process of active construction of a large logistics base is underway. The automotive industry continues to lead in 2019. The demand continues to be determined by the automotive industry and by logistics operators serving the fast-moving goods sector and online merchants. The main zones in Sofia are located on the southern and eastern tangent of the ring road, as well as in the northern part of the city.

It is expected that by the end of the year a total of 90 000 sq.m2 logistic areas to be completed.

The prices for rent in the first half of 2019 remains stable from 3.60-4.50 Euro/sq. m. for the new areas according to their location. The first-class logistics estates retain a yield of 8.5% for the period.

 

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