1.1 Million Square Meters of Logistics Space Now Operational in Sofia in Half a Year
The logistics real estate market in Sofia marks a second consecutive quarter with growth in construction and high rental activity. This shows the report of the consulting company Cushman & Wakefield Forton for the first half of the year. The total area of the completed projects in the last three months is 72 500 square meters.
"The industrial real estate market is gradually overcoming the shortage of modern space. The volume of newly completed projects is relatively higher than in the same period last year, which is indicative of the redevelopment in this segment. We expect the share of vacant rental space to remain close to current levels, as the projects completed during the period are mainly for custom use and construction, "commented Joro Angelov, manager of Industrial Property and Land Development at Cushman & Wakefield Forton.
As of the first half of 2019, industrial properties under construction in the Sofia area are 202,000 square meters, of which over 40% is for rent, according to Cushman & Wakefield Forton.
The interest in the construction of logistic rental buildings is driven by increased rental activity and increased rental prices. The utilized areas in the first six months of 2019 are approximately 45,300 square meters. The demand for tenants is focused on the new phases of industrial and logistic parks around Sofia, as well as the conclusion of preliminary lease agreements at the construction stage.
Introduced into the exploitation of a small number of new promises, the total of both areas is leased out over a quarterly reach of 1 159 600 ĸ. m. The first phase of the Logistic Center of the date is the pumping for the home and the home is the greatest to the end of the day,
Among the significant new projects completed in the second quarter are the expansion of the Behr-Hella Thermocontrol production base, the Speedy courier center in Bozhurishte, the new Equinix data center to Sofia Airport and the DSK Bank Document and Archives storage center in Industrial Park Sofia - East.
After several years of a shortage of quality logistics properties, the growth in the supply of such logistics properties will gradually balance the market. Stable rental levels and a low share of vacant space have intensified investor interest in Sofia and we expect diversification and tenant choice over the next 2 years, according to Cushman & Wakefield Forton.
First-class logistics properties in the Sofia region retain a yield of 8.5% in the second quarter. Rental prices remain stable between € 3.60 and € 4.50 / sq. m for new areas depending on location.
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