Patience is a virtue. The Romanian success story of WDP proves it. About ten years ago, WDP invested in Romania, intending to tap into a new growth market. The crisis in 2008 temporarily jeopardised these plans. But WDP’s patience and tenacity gave them a first-mover advantage in Romania. Chief Financial Officer Mickaël Van den Hauwe explains.
Romania as a new growth market
“Some ten years ago, the logistics sector on the Western European market wasn’t growing the way it does today," says Mickaël Van den Hauwe. “At that time, geographic expansion was the next step to continued growth. With that philosophy as a basis, WDP moved to Romania, a country that was showing a lot of potential for expansion and demand for logistics infrastructure because of its location as a gateway through South-eastern Europe, the low degree of government debt, the presence of a well-trained workforce, and the promise that the EU would invest in infrastructure-related projects. Together with our partner Jeroen Biermans, an expert in the Romanian property market, we mapped out our strategy.”
Patience, tenacity, success
"Our idea was solid but unfortunately our timing was just not that great," Mickaël continues. "Because in 2008 the financial crisis hit with an enormous blow lasting till 2010. On top of that, the political deadlock that followed meant that the vital investments from the EU that had been promised were not going to be forthcoming. A context in which many companies would have thrown in the towel. But WDP screwed up its courage and continued to have faith in the market.”
“By continuing to go against the grain and invest systematically, we were able to stand firm. Looking back, we see that the evolution of the country is reflected in the evolution of our portfolio. In a bid to bring business back into Romania, there was initially a need for automotive production sites. We also established solar energy farms. Then, the Romanian economy repackaged itself and we saw our portfolio expand to include food retailers, such as Profi and Carrefour. And finally retailers of leisure goods, such as Decathlon and clothing specialist LPP, followed. The fact that the local market is booming today proves that our thoughts ten years ago were headed in the right direction.”
“The fact that we’re there on the spot, our customer focus and our expertise all give us an edge so that today, as one of the market leaders, we enjoy a first-mover advantage that lets us respond better to our customers and to trends. So we see the market expanding, local consumption growing and an increasing need to move closer to cities. Today we are therefore investing mainly in important logistic corridors between large cities as well as in strategically located industrial estates that cluster certain activities (such as retail or automotive) to create centres of expertise.”
“By 2020, we expect to be investing in Romania to the tune of 500 million euros or 15% of our total portfolio. We are well on track for this because this summer the Romanian portfolio already had a value of €350 million with approximately €100 million more in the pipeline. The further government investments in the infrastructure will play a part in our growth, but the foundations for continuing our Romanian success story are already there.”
Curious about our latest acquisitions and projects in Romania? Have a look at the details and figures in the press release of 1 October 2018.