DTZ: 15.7 percent of office space in Bucharest still unoccupied

The vacancy rate of office space in Bucharest has dropped slightly this year, to 15.7 percent, and 330,000 square meters are still vacant, even though the market saw a record lease volume in the first half, mainly due to relocations, DTZ Echinox said Wednesday.

The vacancy rate is down 1 percent quarter to quarter and 0.8 percent year on year, from 16.5 percent, according to the study. At present there are 330,000 square meters of office space in Bucharest without a tenant and over 30 percent of the area is located in P{ipera.

In Center-North, the vacancy rate is 16 percent, while in Barbu Vacarescu – Floreasca, it drops to 14 percent.

Office space in the Capital totaled 2.114 million square meters at the end of June, with 3 percent of the area represented by new deliveries. There are still 132,000 sqm of space left to be delivered by the end of the year, 60 percent of it already leased.

Relocation transactions dominate the market with a 72 percent share of the total leases. Half of relocations are based on pre-lease contracts.

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“Demand increased steadily in the first part of the year and we anticipate the trend will maintain in following quarters. The preferred option for tenants continues to be relocating in already existing buildings or buildings thzat are about to be delivered within the span of 6-12 months. This behavior is encouraged by occupation costs which continue to be attractive thanks to incentive package but also by the quality of the new spaces delivered. We identify on the market big companies that are looking to consolidate their operations but also companies that are looking to open new divisions in Romania which offers an interesting perspective for future real estate projects”, according to Madalina Cojocaru, head of office department DTZ Echinox.

Rent rates remained stable in the first six months of the year, with variations from 16-18 EUR/sqm/month in central areas to 15-17 EUR/sqm in Central-North, dropping to 12-15 EUR/sqm in semi-central regions and 9-12 EUR/sqm in suburban areas.