I think the main reasons behind this growth are the overall evolution of the Romanian economy, the investments that were made on the transportation infrastructure, even if they are relatively small and not at the expected level, as well as the geopolitical changes. In 2016, Romania's GDP grew by 4.6% y-o-y and for 2017 a growth of around 3.6% is predicted. Of course, the way the country is perceived is important, but I would rather call it awareness not perception. It is a visible fact that there are a lot of companies which are well established in Romania and due to their growing businesses and success on this market, they attract other companies as well. Romania has some specific advantages in comparison with other countries in the region: it is a very large country with little entry barriers, it has a healthier business environment and a clear progress in the fight against corruption, as well as an important human capital that consists of educated and creative people, with natural potential for foreign languages and extremely talented IT specialists.

 

 

Automotive is an important driver of industrial market growth, of course, which is also supported by the development of infrastructure in the western part of the country. The textile industry is also keeping the pace, but maybe not at the same rate. According to statistics, the Romanian industrial production recorded an increase of 2.4% in 2016 vs. 2015 and the IT&C sector had a significant growth of 14% in the same period. There are many tenants form other industries as well, such as aeronautical, food processing and white goods.

 

 

I think that tenants are more educated and know better what they want. They have clearly understood that the cost of occupation is not only rent, but also utilities and service charges, which sometimes, in obsolete buildings, can be higher than the rent itself. Subsequently, tenants are looking to rent spaces built at higher standards, with green features and limited energy consumption. This is excellent for CTP, which is implementing its White Book in every new building while refurbishing all acquired buildings in order to be brought as close as possible to CTP’s standards of quality. Our newly builds have green certifications and surprise our tenants with their energy efficiency which is generally not expected for a warehouse. For CTPark Bucharest West we are expecting to receive a BREEAM certificate very soon.

 

 

CTPark Bucharest West, which is at km 23 on the A1 highway, is designed to become the biggest, as well as the fastest growing light industrial and logistics park in the whole region, not only in Romania. We plan to turn this park into a strategic location for the Romanian economy by developing up to 725,000 sqm of modern and highest level of quality green spaces, investing significantly in the infrastructure and building a strong partnership with local authorities. The total park size today is of about 100 ha, with 244,000 sqm GLA. The total investment in this expansion phase will reach €108.9 million, part of it being a credit facility granted by European Bank of Reconstruction and Development and by BCR (Romanian Commercial Bank). The park will be a mixed-use development, with all sorts of functions and services aimed to help our tenants to get better results in their businesses. As part of this programme, we have already implemented shuttle busses to service the area and to connect it with our other park from km 13. We are also developing a special project of creating a partnership with high schools in the area so that our tenants can help the educational centres to prepare desired workforce, while the pupils benefit from the chance of immediately finding the right job next to their schools.

 

 

Second tier cities in Romania, but also other cities with a good location from the infrastructure’s perspective, are all points of development for us. We are currently expanding in Timisoara which is a great market and still has potential even if all the players are present there. We are also very happy with our centre in Arad and we are convinced that in a couple of months, once we finalise all refurbishment works, it will be one of the few really modern spaces in town, with all fire detection and fire-fighting endowments in place, and with a proper landlord that offers comprehensive services for its tenants. Likewise, Cluj-Napoca is a centre of interest and we are now starting to develop a new project there: a new logistics park that will have about 37,000 sqm, out of which 7,000 sqm are already occupied by one of our partner tenants in Romania.

 

 

Yes, we still make some interesting acquisitions, while we have moved the focus towards construction, triggered by the demand for modern, up to date green and efficient spaces, as mentioned above. We have just acquired two projects in Salonta and Ineu which are rented by two factories present in automotive, i.e. Inteva and Delphi, both long term committed to these locations. The two properties are the basis of the new CTPark Ineu and CTPark Salonta, and are part of CTP’s long-term vision to grow. The investment was of approximately €18 million. There are also other projects on our list in different stages of the acquisition process, but it is too early to disclose them.