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Real estate: DTZ: Cluj, Iasi, Timisoara and Brasov offices are 25% cheaper than in Bucharest
Rent costs for class A offices in Cluj, Iasi, Timisoara and Brasov are 25% lower than in Bucharest, when the overall stock of such areas in the four towns is 450,000 square meters, five times smaller than in the Capital city, according to DTZ, one of the most important real estate consultants in Romania.
“Important players in the corporate market with offices opened in Bucharest have focused on regional towns in the last years in order to expand operations, being motivated by educated labour force, salary levels or rent prices. For instance, occupation costs (rent +service charge) of class A office space in regional towns are 20%-25% lower than in the Capital. For companies with activities in the Technologic &Telecom field, which occupy generous areas, the selection of a location in a regional town in an option which, on a long run, generates economic advantages,” said Madalina Cojocaru, head of office department DTZ Echinox in a press release.
With 150,000 sq.m of mostly B class offices, Cluj Napoca is a leader for space stock, being followed by Iasi with 120,000 sq.m and Brasov with 80,000 sq.m., according to the latest DTZ Echinox study on the office market in the main regional towns in Romania.
The total volume of spaces to be delivered in 2014 in the four towns is of 52,000 sq.m, most of them in Cluj Napoca (42,000 sq.m.). The first stage of the project The Office – 19,000 sq.m., developed by NEPI and businessman Ovidiu Sandor, the project United Business Center Tower (10,000 sq.m) developed by Iulius Group and the second stage of Liberty Technology Park (11,400 sq.m) developed by Fribourg Investment will be completed in Cluj Napoca.In Iasi and Timisoara 10,000 sq.m. and 9,000 sq.m. will be commissioned, while the delivery of new spaces is announced in Brasov.
In case all announced projects are commissioned, the modern stock of office areas in Cluj Napoca will double by 2016, reaching 300,000 sq.m.The level of rents for class A areas in similar in Cluj Napoca, Timisoara and Brasov, ranging between 12 and 14 euro/sq.m/month, a slight difference existing in Iasi where rent for class A offices is 13.5-15 euro/sq.m/month. Rents for class B offices vary between 7 and 11 euro/sq.m./month in all four towns analysed.
The demand for office space is generated especially by companies activating in the financial, technological & telecommunications fields. “Cluj Napoca has been considered lately the second most attractive town after Bucharest for BPOS and SSCS. Due to competitive salaries, the young population made mostly by students and occupation costs, the town was chosen as location for offices by companies like Genpact, Endava, Atlas Telecom, Evalueserve, Skies Enterprises, HP, Siemens, Intel, SAP, Bombardier and Pentalog,” the report shows.
According to the source, Iasi has become the second most attractive regional town after Cluj Napoca for companies which want to open operational centers of BPO, R&D and SSC, due to the good telecommunications infrastructure, competitive salaries and large volume of educated labor force.
In Timisoara the demand for office space comes mostly from the technological & telecommunications (Alcatel, Team Net, Three Pillar Global, IBM, Vodafone, SAP), financial (Deloitte, PWC, Raiffeisen, BCR) and production/automotive fields (Flextronics, Autoliv, Smithfield Foods).
“All four towns analysed are also university centers which generate competitive and qualified labor force. Most young people speak English and French. But large companies can also find people who speak Russian, Portuguese, German, Hungary, Swedish, Polish, Turkish, Greek and Arabic, a valuable source of linguistic skills being represented by ethnic groups in those towns, “ the report shows.
Another important segment with major influence in the companies’ decision to open work space in secondary towns concerns labor force costs.
Salary expectations of graduates with less than a year of experience in the labor force market vary between 250 and 275 euro for those with economic studies and 350-375 euro for IT and Polytechnic Institute graduates. Net salaries practiced in the four towns vary between 250-275 euro for employees of customer services with less than two years of experience and 700-900 euro for programmers with less than 3 years of experience.
Data referring to labor force costs and foreign language speakers included in the report were supplied by Brainspotting Romania.