CBRE: Bucharest office space market needs new projects as demand keeps growing

CBRE, the global and national leader in real estate consulting, estimates that the office space market in Bucharest will continue its fast growth rate as a result of growing demand and a small vacancy rate of only 8.4 percent.

CBRE representatives predict that the modern stock of office space in Bucharest will reach approximately 2.85 million sqm by the end of Q2 2018. In Q1 2018, around 28,000 sqm were delivered and around 64,000 sqm will be finalized in Q2.

According to estimations, over the following three years, a total of 900,000 sqm of office building projects will be finalized, of which around 185,000 sqm are programmed for delivery in 2018 and 350,000 sqm in 2019.

“The demand on the office space segment is continuously rising in Bucharest, and with only 8.4 vacancy rate, the need for new projects is clear. Currently, if a company wants to lease offices for 200 employees in a building close to a subway station, they may not find them! Identifying optimal spaces takes a minimum of 12 months, but ideally they should allow 24 months,” said Mihai Paduroiu, Head of Advisory & Transaction Services Office at CBRE Romania.

Currently, there are 8 office projects in development in Bucharest that are due before the end of 2018. They will cover over 157,000 sqm, of which 61 percent will be delivered in the west part of the city, and 22 percent in the city centre, as follows:

Four projects in the west: Campus 6.1, Orhideea Towers, the first building of Afi Tech Park, the Berlin building (part of the reconversion projects in Sema New Project
Three projects in the city centre: Unirii View, Day Tower and D’or
One project in Central Business District: The Mark
The second building of the Globalworth Campus completed in Q1 in the Pipera area

In Q1 2018, the office space segment had 52 leasing transactions that totaled 65,500 sqm. The sectors that had the highest demand were: industrial production and energy (36 percent), IT (23 percent) and retail (16 percent).

Of the total demand, 36 percent was represented by relocations, followed by pre-leases, with 34 percent. According to CBRE estimations, these ratios will be maintained over the following quarters, thanks to the large number of projects still in construction or not yet started. The average contractual rent value remains at the same level as in the recent period, at EUR 18.5/sqm.