New demand in Bucharest's office market (new leases, pre-leases and relocations from non-competitive stock) had a share of 57% or 185,000 sqm of the total office take-up in 2022. Demand itself was up 10% year-on-year, according to a study by real estate consultancy Cushman & Wakefield Echinox.
The vacant offices in Bucharest cover around 500,000 sqm, which represents roughly 15.2% of the total office A and B-class stock operational in the city. More than half of the available spaces are in buildings that were developed over 15 years ago. Furthermore, half of the Bucharest stock has an average age of 10 years. The agency’s data points out that the newest office areas are Center-West and South, with an average building age of 7 and 9 years, respectively.
In terms of leasing activity, the new demand (new leases, pre-leases and relocations from non-competitive stock) had a share of 57% or 185,000 sqm of the total office take-up in 2022. The demand was up 10% year-on-year.
“The global office market is going through a period of readjustment imposed by the hybrid work model, a challenge which we are also facing in Romania. More specifically, we refer to the actual space utilization rate, the resizing of the rented areas and to the higher tenants' demands pertaining to the overall quality and also to the energy efficiency of the office buildings. Having the employees back in the offices will continue to be a challenge, but most companies have defined their workplace and occupancy strategies, and we, therefore, expect to see increased activity in the market in the sense of consolidations or relocations," said Mădălina Cojocaru, Partner Office Agency Cushman & Wakefield Echinox.
The office rents will remain on a growth path this year as Bucharest has seen only slight increases in this regard for almost a decade.
The prime headline rents have seen an upward movement in 2022, reaching a level between €19.00-21.00/sqm/month, the highest in the last 14 years, as a result of the low pipeline and the surging inflation.
All in all, the Bucharest-based office market has a stock of around 3.3 million sqm at present, with the potential to add another 400,000 sqm in the next years, depending on the progress of urban planning regulations.
