While Bucharest’s office stock totaled 3.3 million sqm at the end of the third quarter of 2022, there were only five new office buildings completed and just another one will be delivered by year-end, which would make it a 5-year low for the market, according to real estate consultancy CBRE.
The weak delivery volume is underpinned by the challenging context of permits, the rise of constructions costs and the pandemic effects on the constructions market.
"There are two major topics that the office leasing market in Bucharest must address nowadays, one is the limited number of projects under development on the short term and the other one is the growing pressure on rents caused mainly by the economic climate. In addition, the overall vacancy rate started to register decreases, small ones, but the descending trend indicates a lesser availability for compact large spaces to lease. The ace in the sleeve is now at the office landlords who have their buildings ESG certified because companies are willing to incorporate in their corporate strategy environmental sustainability and to pay for their employee’s wellbeing at the office,” said Tudor Ionescu, Head of A&T Services Office at CBRE Romania.
With 31,500 sqm, Sema Offices II London and Oslo, developed by River Development, is the largest scheme from the five office projects completed in Bucharest in the first nine months of 2022. The second phase of AFI Tech Park (24,500 sqm) is also the second in the top, followed by Tandem building (21,000 sqm), developed by Forte, @Expo - Phase 1 scheme (21,000 sqm) developed by Atenor and H Tudor Arghezi (6,500 sqm), developed by Hagag.
By the end of the year, another office building is expected to be added to the modern stock: with a GLA of 34,500 sqm, the second phase of One Cotroceni developed by One United Properties is estimated to be finalized, being actually themost important/the biggest office building the local market welcomes this year.
The forecast for next year is positive: another 94,000 sqm in five buildings, now in different construction phases, will grow the capital city’s modern stock to 3.43 million sqm, according to CBRE.
The total leasing activity (TLA) in Q3 totaled 73,300 sqm, with 5% less compared the same quarter of the previous year. Computers & Hi-Tech companies continue to dominate the leasing activity and maintain their leading position with 40% from leased area.
The office industry continues to drive the transaction market, with a share of 45% of the investment volume that is expected to reach €1 billion by year-end.
