Office and retail expect limited supply pipeline, residential to remain depressed

Newsroom 15/02/2010 | 11:13

Office projects being built in Bucharest for 2010 make up 280,000 sqm, and just 100,000 sqm for 2011, according to a Jones Lang LaSalle (JLL) report. Last year modern office space in Bucharest reached 1.5 million sqm. In Q4 2009, around 125,000 sqm were delivered in the city. Pre-leases have dried up, now at 30 percent of leased space, compared to 70 percent a year ago.

Retail supply reached 500,000 sqm in Q4 2009 in Bucharest. Total Romanian retail stock rose to 1.3 million sqm, of which 260,000 sqm was added in 2009. Rents fell, with prime rents at EUR 70-85 a sqm a month for shopping centers. Five new retail projects and two extensions, totaling 240,000 sqm of GLA, will open this year nationwide, 90,000 sqm in Bucharest from the opening of Sun Plaza and Cocor. “After those, we expect no major schemes in Bucharest in the short term, as the development pipeline has essentially been shut off or delayed,” found the report.

The current supply of modern logistic space reaches 950,000 sqm. The recovery in the overall economy from Q3 of this year, says JLL, will lead to greater demand for quality logistic space. The residential segment saw 1,520 home completed in Bucharest from January to September, 16 percent more than for the same period of 2008. However, around 15 percent of all residential projects under development in 2008 were put on hold or shelved. Despite a 15 percent fall in asking prices for property, JLL expects limited mortgages to keep the pace of sales low. It foresees no improvement in housing demand until 2011.

Corina Saceanu

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