Office market rental demand reached 220,000 sqm in the first three quarters of 2019

Rental demands in Bucharest amounted to 220,000 sqm and 76 percent of the premises traded this year are in buildings Class A offices, according to real estate consultant CBRE.

In the third quarter (Q3) of 2018, an intensive activity was recorded, with 73,000 sqm traded, of which 70 percent are located in Class A buildings. Q3 2018 represented a period of intense pace for CBRE, as it participated in more than 50 percent of the agreements concluded. In the first nine months of 2018, CBRE was a consultant in over 32 percent of transactions. The modern office space stock in the capital was about 2.89 million sqm at the end of October 2018.

”The office space market has grown at a rapid pace in 2018, driven by both the growth in consumption that has prompted the expansion of many companies and the decrease in the available surfaces. The results of the first three quarters of the year, in terms of delivered surfaces, are increasing over the same period in 2017, but there is still room for market for new projects. In 2019, we estimate an increase in activity, with 15 projects announced for completion and about 341,000 sqm to be delivered, according to our estimates. Also, 40 percent of the total surface that will be ready in 2019 is already leased, which is still proof of companies’ appetite for finding offices suitable for their needs,” said Mihai Paduroiu, head of Advisory & Transaction Services Investor Leasing of CBRE Romania.

In the first nine months of 2018, newly built and delivered projects reached a surface area of 133,000 sqm, up 18 percent over the same period in 2017 when 109,000 sqm of office space were completed. Of the 73,000 sqm traded in Q3 2018, 70 percent are in Class A office buildings. 55 percent of transaction types consist of new rental and space expansions (15 percent), pre-closures (8 percent) and relocations (32 percent), and the remaining 45 percent are renegotiations. The most active areas in terms of rental activity were: the west area (23 percent of the total rents), Pipera (22 percent), CBD (Piata Victoriei area, Charles de Gaulle Square) – 21 percent – and central (18 percent).

At the level of the first three quarters of 2018, of the total traded area, which reached 220,000 sqm, 76 percent was in Class A buildings. The most active areas in Bucharest, in terms of total demand, were: west (31 percent), central area (22 percent), northern area (16 percent), Pipera (14 percent) and CBD (14 percent).

Of the total rental requests, 72 percent were: new requests and room expansions (20 percent), pre-rentals (27 percent) and relocations (25 percent). Renegotiations accounted for the remaining 28 percent of the total number of requests received.

Currently, Bucharest is divided into seven business areas, where all major office buildings are concentrated. Five of the seven areas each have a modern warehouse space of more than 400,000 sqm. In the northern area there are 27 percent of the total office spaces in the capital, followed by Pipera with 24 percent, the central area with 16 percent, the CBD with 15 percent and the western area with 14 percent. The eastern and southern areas have a 4 percent share of the modern office space stock.

In the first nine months of 2018, interest remained at elevated rates in the west, center, and the CBD. An important trend is also the creation of new office towers in areas such as Timpuri Noi or Piata Presei – Expozitiei Boulevard.