What is the current position of WDP as a developer and owner of logistics space on the Romanian market?
WDP is a specialist and market leader in the so-called build-to-suit (BTS) segment which comprises of real estate solutions tailored to specific client requirements.
Can you describe the local presence of WDP in numbers?
We have a portfolio covering 1,545 million sqm, comprising 78 buildings in all major commercial and industrial hubs in the country, such as Bucharest, Pitești, Timișoara, Cluj, Brașov, Ploiești, Baia Mare, Oradea, Constanța, Râmnicu Vâlcea, just to name a few. Our 148 tenants represent a varied portfolio of clients, from all industries: manufacturing, retail, pharma, etc. At Group-level, we have a 98.8% occupancy rate, the lease renewal rate is of circa 90% over the last 10 years.
Which are the last investments WDP has made on the Romanian industrial and logistics real estate market?
The last investment we made was in July: we decided to expand our portfolio through a new sale-and-leaseback acquisition of an automotive production unit. The building is located in the metropolitan area of Pitesti, which is an established automotive production cluster, centered around the Dacia Renault plant. The unit has a gross leasable area of approximately 20,000 sqm and will be leased back to the seller under a long-term, triple net, fully indexed contract. According to this, the tenant has the option of expanding the unit.
This year we also finalized a few important extension projects: in our WDP Bucharest – Ștefăneștii de Jos park we built an extension of 34,402 sqm for Epantofi and a 12,864 sqm extension for Kitchen Shop and Lecom.
Another very important project we finalized outside the capital was the 25,000 sqm extension for Pirelli, in Slatina. We are very proud of these long-term, mutually beneficial collaborations.
What is the company’s strategy on short and medium term? Did you already plan new investments? What are the currently ongoing developments?
Our strategy is to continue to offer real estate solutions for both existing and new clients. We are continuously planning new investments in Romania and have several projects ongoing, such as building a factory for Erkurt Holding in Almaj, Craiova, or a building for the Taparo factory in Târgu-Lăpuș and the extension for Ursus Breweries in Buzău. These three constructions will increase our portfolio with a total of 26,320 square meters, thus by the end of the year it will sum 1,579 million sqm.
Green approaches in development is already a trend within construction standards. What are the WDP green investments on logistics and industrial properties so far?
Sustainability is the path to the future. In all the countries where WDP operates, we have implemented a series of actions aimed at increasing the production and consumption of green energy, in line with the EU Green Deal. We aim for a transition to increased renewable energy production and optimized consumption and we work towards it. At the local level, WDP Romania aligns its development directions while considering the ESG standards of the Group.
We are committed to conduct a responsible and sustainable business: most of the warehouses in our portfolio have obtained EDGE certification, a distinctive hallmark of sustainable construction, which requires an average reduction in energy consumption, of water and embedded energy of the materials used by about 30%.
In our WDP Park Bucharest – Ștefăneștii de Jos we installed photovoltaic panels that have a 13 MWp production capacity: the green energy production will cover the biggest part of our tenants’ consumption needs. By this investment we aim to decrease the carbon footprint during the entire lifecycle of the project with approximately 180 000 tons of CO2.
Last, but not least, we implemented the first biodiversity project in our portfolio: in our WDP Park Bucharest – Ștefăneștii de Jos we planted thousands of trees and bushes, thus contributing to the protection of the planet and at the same time providing a healthy and pleasant environment for our tenants.
We want to offer interested customers the option of mounting photovoltaic panels on buildings (newly built or existing), as well as the possibility of installing charging stations for electric cars in the industrial parks in our portfolio. We are implementing a new system for real-time monitoring of utility consumption.
What is the main WDP client profile? What type of actors are renting your properties?
Our client profile is twofold: 1) production companies for which we have developed a BTS (and often have expanded the facility) and 2) companies that need logistics premises for which we have for example developed a distribution center (or in many cases more than one either as a subsequent project or as an expansion of the existing facility).
What type of units are currently available for rent and in what cities? What is an overall cost per square metre?
As we are mainly a BTS developer, we don’t have much space readily available for renting. We have space available in Arad, Bucharest, Dej and Timișoara. The cost per sqm varies per location and building.
What are the first conclusions of WDP on the evolution of the logistics and industrial space market in Romania in the first three quarters of 2023?
The market continues to grow albeit at a somewhat slower pace. Speculative development (i.e. development without having a tenant pre-secured) is much more limited and as a result the market is more balanced than in 2022. It should be noted that rents are increasing on the back of higher construction costs and an increase in the cost of capital.
How does the WDP strategy on the Romanian market fit in the overall vision of the company? What is the importance of the Romanian market in the global portfolio?
The Romanian strategy is very similar to the strategy deployed by WDP in other countries, although of course each country is different in some aspects. WDP focuses on all markets on BTS projects and on real estate with a long term holding strategy in mind, which means that quality of construction and sustainability are very important for WDP (as the long term owner of the real estate).
The Romanian market is important for WDP as Romania is the company’s third largest market after Belgium and the Netherlands.