Villar Romania: when West Bucharest turns from development story into real NOI
In Romania Villar has already moved beyond raw land and into completed buildings, but the gap between development and real NOI is still open. The first West Bucharest building is fully leased, the second was completed and is only partly leased, and most of the pipeline still sits in 2026 to 2029.
West Bucharest Is the Real Execution Test
The main Villar article argued that the group enters 2026 with a stable core, but with a denser execution test. In Romania that test is concentrated in one place: West Bucharest. This is no longer a minor line of land and planning, but it is also not yet a mature income-producing park. There is one building that already proved leasing demand, a second building that was completed but is only partly leased, and then a full next wave of development spread across several years.
That is why a short read of “there is Romanian pipeline” misses the point. The question is not whether the potential exists. The potential is already visible in the project tables. The real question is when that potential leaves the development stage, starts showing up as recurring external rental income, and only then becomes NOI, net operating income, that appears in the financial statements without leaning on full-occupancy assumptions.
What is already proven is clear enough. The first West Bucharest building, around 12 thousand sqm, was completed in 2023 and fully leased to external tenants. That means Villar has already crossed the “is there demand?” hurdle. What is still unproven is the scale phase: the second building, around 11.5 thousand sqm, was completed in 2025 and is only partly leased. That is exactly where the gap between a development narrative and real NOI opens up.
What Is Built, and What Is Actually Working Like Yielding Real Estate
At the end of 2025 the group owned about 40 thousand sqm of income-producing assets in Romania. Of that, about 16 thousand sqm sit in the South Bucharest archive compound and are leased to the group’s own archive segment. In other words, not every built square meter in Romania is a clean test of external NOI. The real conversion test sits mainly in West Bucharest.
| Component | Area | Status | Why it matters |
|---|---|---|---|
| South Bucharest archive compound | About 16 thousand sqm | Built and leased to a group company | Supports group operations, but is not the clean external NOI test |
| West Bucharest, Building 1 | About 12 thousand sqm | Completed in 2023 and fully leased externally | The first proof of concept for the park |
| West Bucharest, Building 2 | About 11.5 thousand sqm | Completed in 2025 and only partly leased | This is the active Romanian bottleneck today |
| Future West Bucharest pipeline | About 57.5 thousand sqm | Under construction and planning | This is the main growth engine, but not yet current income |
The number that shows the problem is occupancy. Average occupancy in the Romanian assets fell from 100% in 2024 to 89% in 2025, and by December 31, 2025 it had already dropped to 77.8%. The company itself ties that directly to the fact that the second West Bucharest building was not fully leased by the reporting date. The new supply arrived faster than the leasing.
That said, it would be wrong to say nothing is moving. External rental income in Romania rose in 2025 to about ILS 2.3 million from about ILS 1.2 million in 2024. Average monthly rent in Romania also rose to EUR 5.1 per sqm from EUR 4.7 in 2024. The direction is positive. The problem is that these numbers are still small relative to what the company is trying to build there.
The core point: Romania already provides proof of demand, but not yet proof of scalable absorption. One fully leased building is not enough to declare the park a mature NOI engine when the second building is still only partly leased and year-end occupancy has already fallen into the 78% range.
The West Bucharest Pipeline Is a Staircase, Not One Trigger
The easy mistake is to read West Bucharest as a single trigger. In practice it is staged. According to the annual report, the company is developing a logistics park on about 160 dunams that is supposed to include six buildings with total built area of roughly 80 thousand sqm. The presentation then maps the next steps in detail: B2 under construction for the second half of 2026, B1 planned for 2027, C2 planned for 2028, and C1 planned for 2029.
The economic translation is straightforward: even if B2 is delivered on time, West Bucharest still does not become the finished story in 2026. B1, C2, and C1 together add another 41 thousand sqm, but all three are still in planning. So the move from “development story” to “real NOI” will not come from one ribbon-cutting event. It only happens if three steps occur in sequence: materially deeper leasing in the second building, delivery and initial commercial absorption of B2, and real progress on the next three buildings.
The company’s own table also allows the West Bucharest share of the Romanian pipeline to be quantified. The four future West Bucharest buildings carry expected annual rent of about ILS 12 million at full lease, out of ILS 16.7 million for the full Romanian future pipeline. That means roughly 72% of Romania’s disclosed future rent depends on West Bucharest. On the investment side the concentration is similar: those four buildings account for about ILS 135.2 million of remaining expected investment, out of ILS 185.3 million across the Romanian pipeline. This is no side issue. It is the center of the story.
Not All Romanian Growth Converts Into the Same NOI
This is where three different Romanian square-meter buckets need to be separated. The first is West Bucharest, which is the pure external leasing test. The second is the South Bucharest archive compound, where the company plans two additional logistics buildings totaling about 13 thousand sqm, with one meant for the group’s archive segment and the other meant for external leasing. The third is the AC retail park, a roughly 8 thousand sqm commercial project in Bucharest’s District 4.
That distinction matters. Expansion in the archive compound can create real operational value for the group, but it is not the same thing as external NOI. The AC retail park is a different use case with a different timetable. So if the question is when Romania turns from a project map into income-producing real estate, West Bucharest has to be isolated rather than blended with every Romanian initiative.
Another important distinction concerns the language the company itself uses. For the future Romanian projects it discloses expected annual rent at full occupancy, not project-level NOI. In addition, the report shows a representative yield of 7.5% for Romanian logistics and industrial assets, and explicitly explains that representative yield adds expected income from vacant areas and annualizes assets that generated income for only part of the year. That is a legitimate way to frame potential. It is not the same as proving current NOI already exists.
So the threshold Romania still has to cross is not merely “there is a new building,” and not merely “there is appraised value.” The real threshold is a continuous move from completed space to leased space, and from expected annual rent to reported external income. As long as the second building is only partly leased and B2 is not yet delivered, West Bucharest remains in that middle zone.
What Has to Happen Now
If the whole Romanian story is reduced to one question, it is not whether Romania can become large. The tables already show that it can. The real question is when it becomes real enough to affect Villar’s reporting like income-producing property rather than like a development plan.
The checkpoints are fairly clear:
- The second West Bucharest building needs to move from partial leasing toward much deeper occupancy, because that is where most of the current occupancy weakness sits.
- B2 needs to be delivered in the second half of 2026 and start commercial absorption, not just move from construction accounting into completed-asset accounting.
- B1, C2, and C1 need to move from planning into the permitting and execution track. Otherwise the park stays in the bridge phase for too long.
- Romanian occupancy needs to move out of the 77.8% year-end zone and show that new supply is no longer consistently arriving ahead of leasing.
Bottom line: West Bucharest is already past the empty-promise stage, but it is still not through the full-proof stage. There is a real base, there is a fully leased first building, and there is a clearly mapped growth plan. But until the second building is materially fuller and B2 enters the revenue line, Villar’s Romanian story remains mostly a staircase on the way to NOI, not NOI that has fully arrived.
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