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Jeroen Biermans
Country Manager Romania

24 June 2021

WDP is a leading European developer of logistics projects, specialized in distribution centers, multifunctional warehouses and industrial real estate. They are present on the Romanian market since 2007, providing spaces for the country’s retail giants, amongst others.


What is WDP’s current footprint in Romania and what ambitions do you have for the company given the sector’s effervescent evolution?

WDP first entered the Romanian market in 2007 and bought numerous plots of land, but as the 2008 crisis hit the country particularly hard, we were more or less on standby for five years. As things started to pick up, we took advantage of the momentum and now have around 1,4 million sqm standing assets - 80% is occupied by retail distribution centers for Profi, Carrefour, Metro, Auchan etc., all in all over 50 clients spread over 25 sites across the country. The fact that we are active at a national level gives us an edge over the competition. We have also invested a lot in digitalization and are developing our own programs where clients can consult the status of their buildings, rental agreements and so on. WDP Romania represents 15% of the entire group portfolio and we want to grow to EUR 1,5 billion with financing help from the World Bank, EBRD and EIB.

On the backdrop  of the pandemic, how has demand changed in the past year?

Our current pipeline is composed of 40% new clients and 60% existing clients that are expanding their warehouses. We've seen a notable boom in the e-commerce sector, with the turnover of our clients growing, in some cases, year on year from 3% to 15%. Some retail spaces will probably turn partly into logistical hubs (pick-up food, tech equipment, etc.) due to an increase in online sales. Purely logistics warehouses will remain situated outside the cities, since it's more cost effective that way from a rental cost perspective.

You have secured a strong position in Western Europe for the past 30 years, but Romania is the only CEE country you settled in - is there a specific reason behind this decision?

The local culture is very similar to Benelux (especially Belgium) and it was much easier to find qualified workforce that spoke English than in other CEE countries. Territory wise, Romania is as big as Benelux, where we have 30 million sqm of logistics spaces, while in Romania we only have 5 million sqm, so there's still a lot of territory in need of developing here. We are not ruling out neighboring countries, but Poland is already "taken", Bulgaria is risky from a political point of view and even though Hungary has potential, its market is difficult to enter.

Most of the investors we spoke with said that perceived risks are worse than Romania’s reality - what have been some actual, matter of fact challenges you've encountered here?

Infrastructure is one of the most infamous issues in Romania, but it is not the only country to suffer from this drawback. The lack of cadaster documents posed a great deal of trouble at the beginning, but with the help of dedicated people, we managed to sort things out. Human resources weren't a challenge for us because we found exactly the professionals we needed, from the start.


Romania’s risk assessment seems to have been exaggerated, and frankly speaking yields are at 7,5% here compared to Germany’s 3%, so it is worth it, although the big spread is not justified in my humble opinion and the difference will continue to retract in case the country continues to stay politically stable as is more and more the case.


What is the potential for revamping Romania’s existing buildings and how much appetite is there in the market for premium spaces?

For us it's economically sounder to start new than refurbish brownfields - these are fit only for inner city logistics in places like Paris or London, Bucharest  is not ready yet for this trend. Modernizing brownfields means taking into account, among others, environmental measures and complicates matters. The main appetite for premium warehouses is in Bucharest (for e-commerce), followed by Cluj, Timisoara, Ploiesti, Deva, Craiova, Buzau and for production Pitesti, Oradea, Sibiu, Brasov, Bacau. Only Constanta has to make a bigger jump the following years taking into account its potential as Seaport.

European norms require reducing the carbon footprint and choosing green energy sources - how is the industry in Romania adapting to these requirements, especially in the context of the pandemic?

The industry is adapting incredibly fast because it will become one of the triggers to keep receiving financing, so all new warehouses will be built with sustainability in mind. In order to keep up with the rules, we hired a team of engineers to help us with the digitization process and installed solar panels on our buildings. LED lighting, energy efficiency, more natural light, loading points, electrical vehicles, local catering, tennis or football fields, car washing services are some of the European trends that are starting to be imported here in order to keep the employees motivated at work.

In a nutshell, what are your plans for the next two-three years, and do you see the risk of an industry bubble?

We have a lot of good projects in the pipeline, but due to the pandemic we are now in a slowdown because online negotiations take a lot more time than face to face ones. In the near future we intend to reach EUR 1 billion in value and expand our portfolio with premium buildings that raise the local standard. I don't see any risk for a bubble of growth caused by the pandemic in Romania because there are no speculative developments here, except on A1, unlike in Western Europe, there are many pre-sold unrented projects and that's not necessarily safe.


It has been proven more than ever during the pandemic that logistic warehouses are always necessary and used. It is one of the most secure sectors to invest in.


What would be a final message about the Romanian real estate market?

My personal view is pretty positive because what I see are people who want to work, good access to subsidies and adequate plots of land still available. As the pandemic showed us, we need more production factories in Europe and Romania is by far one of the most interesting places to set up productions.

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