High potential for local office building segment

Mihai-Alexandru Cristea 09/11/2020 | 14:51

Companies occupying office space need to account for several types of work arrangements, including full-time remote, part-time remote, and full-time on-site. They also need to increase technological investments in order to support remote working, according to a survey carried out by real estate firm CBRE.

By Anda Sebesi


While remote working has been on companies’ minds since the beginning of the health crisis, the aftermath of the pandemic might bring a shift towards the fluid workplace and improved office wellness facilities. On the Romanian market, companies may choose to keep their current spaces and ask their employees to come back into the office in shifts.

“For people working inside the office, physical distance will be ensured according to the safety standards imposed by local authorities, but companies will still encourage face-to-face collaboration and communication,” says Marius Scuta, head of the office department & tenant representation at real estate consultancy firm JLL Romania.

Along similar lines, Fulga Dinu, country manager at Immofinanz Romania, says that flexible working and home offices will be in even greater demand, but that home offices will never completely replace the office workstation.

“We are convinced that the social aspect and the personal interaction are crucial for innovation and productivity in companies. We will therefore continue to see demand for high-quality office spaces with benefits. In the medium to long term, there may of course be changes in individual tenants’ space requirements,” Dinu explains.

In the meantime, developers are continuing to work on large office projects on the local market. Between mid-2020 and the end of 2021, a total of 325,000 sqm of modern office spaces are expected in Bucharest and some 206,000 sqm will be completed in large regional cities (Cluj-Napoca, Timisoara, Iasi, and Brasov).

The market for coworking and flexible spaces could see a resurgence as companies are exploring different work arrangements that don’t raise any health risks for their employees. However, the development of more flexible office spaces has been rather limited, and this segment had only 84,000 sqm of operational spaces spread across 106 venues at the end of 2019.

By comparison, the total office stock in Romania stood at more than 4 million sqm in Bucharest and the main regional cities last year.

“Bucharest has good prospects because the volume of office spaces delivered on the market so far is still low compared to the city’s population and the market’s potential. While the Bucharest office stock reaches 3 million sqm, Warsaw’s exceeds 5 million sqm. In addition, a large share of the Romanian capital’s office stock is represented by class B offices which cannot provide a safe working environment in the context of the pandemic,” says Antoniu Panait (main photo), managing director at Vastint Romania.

While 2019 was by far the best year for Vastint Romania, as it delivered 63,000 square meters which are now fully operational and equipped with the latest technologies – Timpuri Noi Square is 95 percent leased and Business Garden Bucharest stands at over 75 percent – the company is focusing on existing projects and tenants and on leasing vacant premises. “In a normal context, we would have started a new phase of the Timpuri Noi project. If the market has the capacity to absorb new office deliveries, we can continue the development,” adds Panait.

Last but not least, Dinu of Immofinanz Romania says that the company has eight operational office properties and two office buildings currently undergoing a modernisation process in Bucharest and Voluntari, with a 91 percent overall occupancy rate. “Despite the pandemic, we signed contracts for more than 40,000 sqm during the first nine months of 2020. These included contract extensions and expansions as well as new tenants joining our office buildings,” Dinu notes. In her opinion, office buildings nowadays must offer much more than just workspaces; they’re more like living spaces, with employees’ wellbeing becoming a top priority. “This will be the essence of the office experience and we expect this trend to continue in the future as office landlords pay more attention to the needs of their modern customers,” she adds.

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