The vacancy rate in Bucharest’s office market has reached a historic minimum for the past 9 years, standing at 8 percent, while the modern office space stock reached 2.79 million sqm, according to CBRE consultants.
In S1 2018, 149,000 sqm were traded, and in terms of deliveries, the first part of the year recorded a relatively slow pace, with 28,000 sqm completed and put into use, but the agency’s estimates for the second half of the year are more optimistic: 158,000 sqm are under construction and will be completed by end of the year. Of the total office space stock, 47 percent are in Class A buildings.
“The decline in vacancy rates is a clear signal that Bucharest’s office space segment needs as many new projects as possible in order to meet the accelerating demand. An important contribution to the increase in employment has come from co-working companies such as Spaces, which have a growing activity and are expanding rapidly,” said Mihai Paduroiu, head of Advisory & Transaction Services – Office of CBRE Romania.
Of the 149,000 sqm traded in S1 2018, 80 percent are in Class A office buildings. About 20 percent of the transactions were renewals and renegotiations, and the remaining 80 percent is divided into: new applications for wound up (15 percent), relocations (22 percent), pre-closures (36 percent) and expansions (7 percent).
The largest transactions
The ranking of the largest rental transactions, which mark the office space market in S1 2018, covers areas ranging from 12,000 sqm to 3,000 sqm occupied by major companies in areas such as industrial production and energy, IT, co-work or retail.
In S1, the office space segment recorded the most demand from IT companies (27 percent), followed by major players in the industrial and energy sector (26 percent) and business services (17 percent) , retail (17 percent) and financial (6 percent).
The areas with the lowest vacancy rate are the northern area (4.2 percent), where the largest stock of office space in the capital (782,000 sqm), the CBD (Victory Square, Charles de Gaulle Square – 4.7 percent), followed by the western area (7.3 percent).
The most active areas in terms of rental activity were: the western area (36 percent of the total rental volume), the central area (24 percent) and the northern area (16 percent).
In the second semester (S2) of the year, 62 percent of the 158,000 sqm scheduled for completion will be delivered to the West and 38 percent to the center and CBD. About 70 percent of the office space that is announced for the S2 2018 has already been pre-leased.
The average contract rent remains unchanged compared to the last period and is estimated at EUR 18.5/sqm/month.