While around 100,000 sqm of new office space is expected in Bucharest this year, no new project is slated for delivery in 2024 which would move the city into a landlord’s office market, according to Colliers.
However, Bucharest’s office market is undersupplied on a per capita basis relative to Western European capitals. Even lower supply rates are recorded in regional cities. During 2022, new office deliveries in Bucharest totalled 125,000 sqm, while the total stock reached nearly 3.3 million sqm.
“The entrenching of remote work in almost every organization has meant that offices no longer represent what they did in the past. However, we are still pretty far away from seeing this shift in its final form, as companies are still seeking the most appropriate formula or the correct hybrid work dosage. However, it is clear that increasing the number of employees no longer seems to necessarily lead to a higher office. At the same time, the need for a bigger office that some companies which expanded greatly before the pandemic may have been
In terms of rents, Colliers consultants appreciate that they are under upside pressures in some submarkets, even beyond the inflation indexation, and expect landlords to transmit most of the inflation indexation into rents. For instance, a pre-lease for a built-to-suit project would likely attract a rent that is some 5-10% higher than it would have normally been a year ago. Regarding vacancy, the mid-year figure of 15.25% remained unchanged at the end of 2022, but down from 16.5% at the end of 2021.
Looking forward, the agency points out that Bucharest has the potential to reach a stock of up to 5 million sqm of offices by the end of this decade if the country’s economy remains in growth mode.
