News Article BNP Paribas Real Estate Bucharest office report Romania
by Property Forum | Office

Nearly 55% of last year’s supply of new offices in Budapest came in the form of two schemes: Timpuri Noi Square I & II (33 000 sqm) and The Bridge (36 000 sqm). It is thanks to these developments that the total office stock in Romania’s capital reached the threshold of approx. 3.2 million sqm. BNP Paribas Real estate’s analysis highlights that tenant expectations in respect of high-quality space made developers focus mainly on supplying Class A office buildings to the market.

Experts at BNP Paribas Real Estate point out that over the coming quarters, dynamic growth will be recorded in the central-west region of the capital, thus enabling it to emerge as a notable alternative to the northern areas of the city. There are plans to deliver approx. 125 000 sqm of modern office space there only this year, where the leading schemes include the Business Garden complex developed by Vastint and the Orhideea Towers complex with CA Immo as the developer behind it.
“A great asset of the schemes developed to the west of the heart of the city centre is their direct proximity to large residential neighbourhoods. When choosing a location, tenants frequently emphasize the importance of the vicinity to and convenient public transport links with the residential areas of the city,” said Louis-Maxime Juhel Senior Consultant, Office Leasing Romania at BNP Paribas Real Estate.
The shape of Bucharest’s office market will change in following years due to growing expectations of the new metro line project being concluded in the Expozitiei - Presei Square area. This location, which is expected to offer a direct link to Otopeni International Airport, is already attracting tenant interest. ING Bank made the decision to sign a pre-let contract for the lease of more than 19 000 sqm in the Expo Business Park complex.
Demand dominated by IT&C
Similarly to previous quarters, last year’s demand was shaped mainly by businesses from the Information Technology and Communications sector, where they held 33% of the space taken up. The largest transactions included the new Amazon office that occupies 13 500 sqm, and the IBM relocation to a 12 000 sqm office. Authors of the report draw attention to the vacancy rate in the Class A office building segment standing at approx. 6% and shaped by, amongst others, limited availability of large units.
“The high interest in prime schemes means occupiers are now choosing the projects located away from the centre over Class B office space located in the heart of the city,” added Bogdan Cange, Consultant Office Leasing at BNP Paribas Real Estate.
It follows from the report that in H2 2017 the rent paid for prime space in the centre stood at €17.5-18.5/sqm/month. Secondary offices came at a monthly cost of approx. €12-14/sqm/month. Analysts at BNP Paribas Real Estate expect that this year rents will remain relatively stable as a result of pre-let contracts signed for schemes entering the market, which will not lead to increased pressure on rents.