Developers announce new office projects in a fast pace, the demand in Bucharest is most likely going to be constant in the coming years, JLL representatives said according to Mediafax.
Next year the vacancy rate will go up again after a slight decline this year.
“Over the past two years, the demand for new office spaces was relatively stable at around 300,000 sqm, which led to a decline in vacancy rates amid lower deliveries. Next year, however, there are scheduled for delivery projects totaling 300,000 sqm, but in pipeline there are projects of approximately 500,000 sqm. This new supply to be delivered on the market is a warning signal as the new demand is only half of all the transactions registered in a year, the rest being represented by relocations or renegotiations,” said Marius Scuta, head of JLL Bucharest office.
He explained that only 140,000 sqm of the total transactions in 2014 were expansions and new entries on the market, namely the new demand, and this year he expects a level of 150,000 sqm.
This year the supply of new office spaces to be completed is about 120,000 sqm, a similar value to the one recorded in 2014. In terms of taking over the spaces, JLL consultants stake on a similar level as last year’s and as in 2013, 300,000 sqm, but with a higher number of pre-rentals.
JLL estimates that the average vacancy rate will slightly decrease in 2015, given that in 2014 it reached the minimum of the last six years -13.3 percent – due to new delivered projects with large pre-leased areas and to the high demand.
“The new projects on the market will attract renters from older buildings, some of which will be difficult to re-rent as they are either in less attractive areas or old. Many projects in Bucharest need to be modernized and renovated. In Pipera-Tunari, where we already speak of a 35 percent vacancy rate, there are effective rents of up to EUR 5-6 per sqm,” said Andrei Vacaru, head of research & consultancy with JLL.
However, there is an increasing interest for Romania from various new companies, as well as from some companies that are already on the market.
JLL brokered this year office transactions exceeding 8,000 sqm.