CA Immo owns the land plot at the crossroads between Splaiul Independentei and Soseaua Orhideelor, at the entranceway into Regie university campus, where it planned to raise two towers of 20 floors each.
The project has been adjusted, so that the towers will have a P+11 and P+15 floors and a 37,000-sqm rentable area, compared with 50,000 square meters in the previous plans.
“Orhideea remains our main development and we hope to start construction works next spring. We have the support of shareholders and we are in talks with tenants that can set off the project. In the past 3-4 years we managed to constantly have an over 95% occupancy rate on our office portfolio, we’ve gained our partners’ confidence and it’s a pity losing tenants for 6,000-7,000 square meters on the lack of spaces,” Marian Roman, managing director of CA Immo Romania.
CA Immo this year sold Europolis logistics park, the space of former OBI store of Sibiu and a land plot in Barbu Vacarescu street, properties worth over EUR130 million, but which no longer fitted the group’s strategy of exclusively centering on the office segment.
Roman says that the money raised from the sale of these projects has to be reinvested, but projects of Germany, where returns are smaller, but the rental market is more stable, also compete for the funds.
Several office projects have been announced in recent years in the area of Basarab passageway, but except AFI, no other developers have started works on sites.
“The construction license is valid, we got it two months ago and we want to be the first to start works. I believe the area has all the takes to be an office destination,” said Roman.
CA Immo has in Bucharest a portfolio of offices with a rentable area of around 104,000 square meters and a market value of around EUR250 million. The vacancy rate of these buildings is less than 5%, in the context where at the level of Bucharest around 14-15% of office spaces are empty.
“Both in the office portfolio and the logistic project, there have been companies that managed to carry on because when they were in trouble we allowed them to scale back their activity. Many of them regained their health and started growing again, and this is visible in our tenant retention level, of above 90%,” states Roman.
However, there are also tenants that cannot be prevented from leaving.
CA Immo manager says he can notice a rising polarization of office demand in two areas of Bucharest: Barbu Vacarescu-Floreasca and Orhideea-Politehnica.
The local real estate market has a better dynamics this year, with new tenants entering the office sector and organic growth of some companies from 400-500 square meters to several thousand square meters, but amid the lack of deals between institutional players one cannot speak of euphoria in this field.
Moreover, Marian Roman considers rents on the office market had dropped by around EUR1/sqm in most areas in the past two years.
A field that is less exploited locally is that of office space rental to governmental institutions or local authorities. “This is a market boasting a high potential in the future,” said CA Immo official.
(English version by Catalina Apostoiu)