Bucharest recorded a 20% decline in office leasing, to 339,000 sqm, in 2024, compared to the previous year, although it remained above the five-year average, according to a Colliers report.
With only one new delivery in 2024 - AFI Loft, at around 16,000 sqm - Bucharest's modern office stock has reached around 3.4 million sqm.
The vacancy rate for modern office buildings built in the last 14 years was between 12-14%, while buildings delivered before 2010 had a vacancy rate of almost 16%.
According to Colliers, 42% of Bucharest's office stock consists of buildings delivered more than 15 years ago. This ageing stock poses challenges for the market, as tenants increasingly prefer newer, more energy-efficient buildings with modern amenities.
Despite these challenges, Bucharest remains a key player in the CEE office market. The city has a strong commitment to sustainability, with 93% of new office buildings and 70% of older buildings holding green certifications.
"Romania is a key player in the region and while well positioned to adopt sustainability standards, it also has a significant stock of older buildings, comparable to those in Bratislava and Budapest," explains Victor Coșconel, Partner | Head of Leasing | Office & Industrial Agencies at Colliers. "Upgrading these buildings represents a significant investment opportunity that can improve the long-term competitiveness of the market and attract developers looking to meet current sustainability requirements."
Slower office development in Bucharest versus region
Compared to other CEE capitals, Bucharest's office market is experiencing a slower pace of new development. This focus on modernising existing buildings helps maintain market balance and avoids the risks of oversupply, according to Colliers experts.
However, the limited supply pipeline for 2024 and 2025 could lead to an increase in rental prices for Class A office space in prime locations.
In Bucharest, office buildings up to seven years old are leased at an average of around €16.5 euros per sqm, compared to €13 per sqm in buildings older than 15 years. In Piața Victoriei, a prime location, rents for offices often reach €22 per sqm
Compared to other CEE capitals, Bucharest's leasing costs are relatively competitive. In Prague, Warsaw, and Athens, rents for new buildings are €17.7, €21, and €28.5 per sqm, respectively.
