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Total office space in Bucharest approaches 3 million sqm
The second quarter of 2019 reconfirmed the increased interest for the office market in Romania. Over 115,000 square meters of office space were leased over this period at the national level, a value similar with that registered in the second quarter of 2018.
In total, 239,500 sqm of office space were leased nationwide in the first half of 2019, up 17.6 percent from the first six months of 2018, when approximately 203,600 square meters were leased.
Transactions concluded in the first half of this year represent about 60 percent of the total volume registered last year, nearly 400,000 square meters. If the current pace is maintained in the last two quarters of the year, then the overall level of 2018 could be exceeded by at least 20 percent.
“The office market continues to perform well in 2019, showing that this real estate segment has Companies from Poland, Czech Republic, Serbia, Western Europe or Asia are looking at Romania more and more when deciding to extend their activity in southeast Europe. They seek cities with good highway connections or access to the sea, as Dunwell data show, after the company sent a Romanian delegation to Transport Logistic 2019, the most important Industrial and Logistics event in Europe, held in Munich, Germany at the beginning of June.reached a certain maturity state. The presence of professional developers, with rich experience and strategies in line with the new tenants’ requirements, has helped the market to mature. This translates into a balance between supply and demand and slightly fluctuations in vacancy rates and average rents,” said Marius Scuta, Head of Office Department and Tenant Representation JLL Romania.
To be noticed that net office space demand increased by 43 percent in the second quarter compared to the first quarter of 2019 to around 60,000 square meters. Net demand accounted for 52 percent of the volume of rental transactions recorded in the second quarter of this year. For the first half of the year, net demand amounted almost 43 percent of the total traded.
Most of the tenants who rented office space in the second quarter are companies in the IT, medical and pharmaceutical, and manufacturing sectors.
JLL continued to be the market leader in the second quarter recording the largest of the office segment, of about 30 percent, traded over 34,000 square meters.
Bucharest attracted the highest volume of transactions, respectively 101,500 square meters (representing 88 percent of the national total), followed by Cluj-Napoca (approximately 6,200 square meters), Timisoara (almost 4,000 square meters) and Iasi (3,550 square meters).
The most popular office areas in Bucharest were Floreasca – Barbu Vacarescu, CBD, North-Exposition and Dimitrie Pompeiu.
At Bucharest’s level, JLL also achieved the largest market share in the second quarter of the office rental segment – 33 percent (approximately 33,800 square meters).
The figures refer only to the intermediary transactions of real estate consultants.
The total stock in Bucharest increased by 6.7 percent to 2.834 million sqm
In the second quarter of 2019, 3 office projects were delivered in Bucharest, totaling 85,500 square meters (these are Business Garden Bucharest, Timpuri Noi Square 3 and Oregon Park – Building C).
Projects amounting to 92,800 square meters were delivered in the first quarter of this year. Thus, in the first half of the year, the office stock increased by 178,300 square meters, representing a 6.7 percent increase in the existing stock at the end of last year.
In the first two quarters of 2018 only 28,000 square meters of office space were delivered.
By the end of this year another 155,700 square meters of office space will be delivered, so the new spaces completed in 2019 will reach at 334,000 square meters. At the end of the year, the stock is expected to be nearly 3 million square meters if all the announced projects are completed.
“The market has the capacity to absorb new developments, as half of the spaces that have been delivered or will be delivered this year are more than 50% leased. The tenants demand has encouraged developers to build new projects, so the office space delivered in Bucharest this year will be double when compared with those completed in the last year,” added Scuta.