The office market in Bucharest continues to grow, with 124,000 of modern office space delivered in the first nine months of the year 388,000 sqm more in the pipeline, according to Cushman & Wakefield Echinox. The commercial stock of office buildings in Bucharest reaches about 2.9 million square meters with an additional 150,000 sqm of owner-occupied stock.
Demand in the first three quarters amounted to 160,000 square meters which is a 43% decrease compared to the same period of last year. The transactional activity was dominated by lease renewals and renegotiations, accounting for almost 46% of the total leasing volume. While the second quarter, under the impact of the restrictions imposed by the COVID-19 pandemic, was one of the weakest for the Bucharest office market in the last decade, with a traded volume of only 44,500 square meters, demand showed some signs of a return in the third quarter, when the traded volume amounted to 63,600 sqm.
The current vacancy rate is 10.8%, with a significant difference between Class A (8.2%) and Class B (18.2%) office spaces. At the same time, the use of offices is about 40-50% of the usual level before the outbreak of the pandemic, given that the vast majority of companies continue to operate in Work from Home or in a hybrid system.
“In the short term, we expect an increase in the vacancy rate, given that a series of large occupants have started sub-leasing processes of areas considered extra. The market continues to grow out of some inertia, given that most projects under construction were started before the pandemic, but in the medium and long term we believe that the bet on the office market will prove to be a winner, with recent studies showing that employees are not willing to give up working from the office and work exclusively from home,” Mădălina Cojocaru, Partner, Office Agency at Cushman & Wakefield Echinox said.
The most important office projects under construction are One Cotroceni Park, J8 Office Park, Globalworth Square, U Center, One Tower, Miro Offices, Țiriac Tower, Dacia One, Millo Offices, @Expo and Sema Park (London & Oslo).
