The market is transforming fundamentally but offices are here to stay, while traditional occupiers appreciate the flexibility option for workspaces, concluded speakers of the office investments panel of CEE Property Forum 2023, held in Vienna.
Offices are still attractive, said Mihai Paduroiu, CEO of the Office Divison at One United Properties, who chaired the panel. “In the past three years, we rented in Bucharest an average of 35,000 sqm per year, prime new office space,” said Paduroiu. He added that One United Properties sold three office buildings at prime yield this year and concluded a 15-year lease deal built-to-suit for an office building.
Hubert Abt FRICS, CEO of New Work & workcloud24, explained that flexible offices are not equivalent to hybrid work. “Flex office is an operational model for office space. The next direction is space as a service,” said Abt.
Alisa Kapic, Vice President Sales North Europe and Country Director Austria at IWG plc, said the shift to hybrid work has increased and IWG is signing a very large number of deals in cities with large developers. The company aims to sign 1,000 locations by year-end. “You will see more bespoke locations with offices in the city centre and remote options for employees,” said Kapic.
CEE was not hit as the large US and Western European markets on office utilization, explained Kata Mazsaroff, Managing Director at Colliers Hungary. “Even though hybrid work is here to stay, there are 2 days in which there is a peak for 70-80% office utilization. This rate will not impact the office lease surface,” she added.
Sylwia Toczyska, Associate Partner at Deloitte, said that employees should be given a choice on the return to office topic. “Young people started to work from home during the pandemic, so we have to be careful when we ask them to come to the office,” said Toczyska. She added that we are seeing an increase in rents and service charges for offices.
