Bucharest’s office development pipeline is low, with just 24,000 sqm expected for delivery by the end of 2025, which could further push pre-leasing activity to new lows, according to a report by iO Partners.
The agency points out that the decrease in demand for office spaces in Bucharest following the pandemic period is reflected in the volume of pre-leases, which saw a reduction of over 50% between 2020 and 2023.
The historical low for pre-leases was reached in 2022, with just over 15,000 sqm, representing only 5.3% of the total demand. In the following year, pre-leases reached 23,600 sqm and accounted for 5.8% of the total demand.
“Considering that only two office buildings totaling approximately 24,000 sqm are expected to be delivered in Bucharest over the next two years, companies seeking office space should conduct an analysis and develop a strategy regarding future space needs well in advance, ideally 2-3 years before their current leases expire, not just a year earlier as was common practice before,” said Maria Florea, Head of Office Advisory at iO Partners.
Developers have been discouraged from starting new projects due to limited demand, high construction costs, and the office space vacancy rate of 14.3% at the end of 2023.
On the other hand, developers who have projects ready and can deliver buildings starting in 2026 will be in an advantageous position.
