New demand for offices in Bucharest fell by almost half in the first quarter of 2023 compared to the same period of last year, while total demand also declined by about 25%, according to data from real estate consultancy Colliers.
The first quarter of 2023 saw the delivery of around 42,000 sqm of office spaces in Bucharest, taking the overall stock to approximately 3.37 million sqm. The major additions were the second phase of One Cotroceni Park in the Center West submarket (34,500 sqm) and Primavera Development’s Muse in the Piata Presei Libere area (7,500 sqm).
Furthermore, only a few major office buildings are due to be finished this year, namely the second phases of Atenor’s @Expo and Forte Partner’s U-Center and Strabag’s H Tudor Arghezi 21, adding up to around 70,000 sqm. For next year, no large office scheme exceeding 15,000 sqm is expected on the Bucharest market.
“This first quarter saw only quite small transactions, but we expect some sizable deals to be concluded sooner or later, which will improve the overall picture of 2023 quite significantly. In the last five years, we have seen each year between 9 and 19 leases over 5,000 sqm at the Bucharest Research Forum, but the total number is probably higher given that some direct deals (particularly renewals) end up unreported. This would suggest that we should see at least a few such transactions each quarter, however, the largest new transactions in Q1 2023 was a renewal of 4,900, followed by a relocation of 3,100 sqm,” explains Victor Coșconel, Head of Office & Industrial Agencies at Colliers.
Colliers’ consultants estimate that the vacancy remains around the 15-16% level as of Q1 2023, though the vacancy for class A buildings delivered in the last 10 years is rather in the 10% region. On the rent evolution, the agency sees pressures to increase rents in certain submarkets, though for now, these remain fairly isolated instances.
