Sorin Preda, CEO, Global Vision, spoke to Property Forum about the industrial projects they are currently developing nationwide and the potential of the Constanța region to become a production hub for companies around the world. Together with Globalworth, Global Vision has €500 million of secured investment capital and is counting on a growing demand for industrial space in the coming years.
This interview was first published in Property Forum’s annual listing of "The 50 most influential people on Romania’s real estate market”.
What does Global Vision’s portfolio look like at the moment in terms of operational projects and what are your development plans for 2022?
Global Vision is now one of the most active developers of logistics and industrial parks and hubs in Romania. Over the last year, we have strengthened our presence in Bucharest, Constanta, Timisoara and in strategic areas of the country. Our portfolio is dominated by the master project Constanța Business Park, where we continued to invest in the expansion of the industrial function, delivering a second unit, accommodating a large international courier operator, while carrying out the execution of space reconfiguration projects for two light industry manufacturers. We continued to invest in infrastructure to connect Constanta Business Park with the port and the local community, acquiring new plots of land for development. Currently, we have a pipeline of 1 milion sqm which comprises of plots of land in various regions of the country.
In Bucharest, we have expanded the Chitila Logistics Hub project, which is approaching full occupancy with its three phases. Seeing the success of this last-mile project, we have decided to invest in new plots of land here as well to continue the development. Otopeni City Logistics, located near Otopeni Airport, is a logistics project designed to attract both SMEs and a potential cargo terminal in the future. We are also present in Timișoara where we are developing a large project near the airport for our partner Globalworth.
How will demand for industrial and logistics space develop this year? Will there be any effect from the removal of restrictions imposed in the pandemic?
The industrial-logistics segment is having one of its most productive periods, in a context where the need to prevent disruptions in supply chains has become vital for the world’s economies. With the escalation of e-commerce we have realised that we need to be more focused on giving our customers the flexibility to support delivery within hours to end consumers. Demand for industrial and logistics space maintained its positive momentum for the first quarter of this year, with most contracts signed with new customers. As for the removal of the restrictions imposed in the pandemic, I believe that this brings a cost reduction, first, for each company. At the same time, we are returning to operating without movement restrictions for both individuals and freight carriers.
Which industries dominate in your portfolio and do you expect changes in the coming period?
In Timișoara, most of the companies in the business park are active in the automotive sector. In Bucharest we have online retail, end-to-end logistics operations for large restaurant chains with large temperature-controlled spaces, as well as pharma storage, detergents and sanitation. In Constanța, we have clients distributing food and beverages for the HoReCa and retail sectors in the area, as well as delivery and interior design companies selling furniture and accessories.
What influence does the crisis in Ukraine have on the industrial and logistics market in Romania? Could the country become a relocation base for Eastern companies?
Many supply networks will be expanded or set up regionally, which was also anticipated with the pandemic. It’s just that the tensions that have escalated right at our border have made companies aware that safeguarding functioning supply chains is crucial to their ability to survive in the economy. In addition, Romania, with an infrastructure development plan already announced, is the preferred point on the European map for Asian companies seeking access to the European and EMEA markets. The Constanța Business Park project is now, at national and regional level, the most relevant example to show the advantages of connectivity and accommodation for investors targeting the relocation of production lines to Eastern Europe.
How do you expect the cost of renting warehouse space to evolve this year? Will we see an increase in costs given double-digit inflation and rising utility prices?
Our strategy is to pass on as little of the price increase shock as possible to our customers. We have an investment model built to withstand crises, scaled across the country and regions. We will continue to make the same efforts, but we rely on the fact that the partners and companies we accommodate in our parks will treat any difficult times we may go through together with responsibility and mutual support. I expect to see double-digit inflation soon, a situation that will last at least a year from now.
What is Global Vision’s funding position and are you considering attracting new funding?
Global Vision has a strong partnership with Globalworth, and secured capital for a substantial pipeline of over €500 million. We are also actively discussing development projects in strategic areas both in Romania and Central and Eastern Europe (CEE) with other investment funds. Finally, we have opened discussions with several family office funds in Europe and the United States of America for investment collaboration both in Romania and in foreign markets.
What innovative solutions do you implement in your Global Vision projects and how do you approach sustainability?
Sustainability is a concept that we not only strive for, but also implement through concrete actions. We have been designing every logistics park for several years now so that it can accommodate large areas of photovoltaic panels, but we are diversifying our green logistics & industrial initiatives with each new project. We’ve brought fast-charging power stations to the parks, optimised energy consumption systems. We are committed to achieving BREEAM certifications for new projects, but also for some of those delivered. Furthermore, all new buildings meet design specifications that align with leading sustainable building standards.
How can Romania attract more industrial and logistics investment in its Eastern region?
Romania has already become an area of interest for warehousing and just-in-time logistics needs, especially in the East of the country; I am referring in particular to Constanța. We saw in this area a perfect production hub for companies that need European products, exported to the Middle East and Asia. There are four companies, two European and two American, in advanced talks with us to create such a hub here. It is about light manufacturing and assembly to take place in Constanța.
What is the profile of the Romanian industrial and logistics market compared to other CEE markets?
Romania is a growing economy with expansion potential and an attractive market, and logistics has been one of the main drivers of foreign investment in the last two years. The country has a strategic geographical position with a port that is not yet fully utilised, but with huge potential, crossed by the main European transport corridors. Thus, it is a competitive location for investments in production lines and warehousing facilities.
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