Biggest Office Space Transactions In January-September

Office space transactions went up 25% in Bucharest to almost 210,000 square meters in the first nine months of the year, but the truly relevant thing for the development appetite companies have in the city is the contracts signed by newcomers on the market or companies renting additional space to expand.

Real estate consultants’ data show expansion and leases by newcomers totaled almost 34,000 square meters, less than the floor space made available by new building deliveries and downsizing operated by some companies, therefore the vacancy rate was close to 20% in Bucharest.

However, the third quarter of the year came with some reason for optimism as a number of big contracts were signed.

The most important transactions of the third quarter and of 2013 so far were the rental of space by Deutsche Bank and by automotive component manufacturer Honeywell. The two leased space in the same building, BOC, part of the UpGround project in Pipera, north of the city, assisted by the same broker and consultant, Jones Lang LaSalle.

Honeywell had 5,000 square meters in BOC and decided to expand to 11,000 square meters, after relocating operations from Floreasca Business Park (3,000 square meters) and further development that required another 3,000 square meters.

The country’s economy gains with each office rented, because 1,000 square meters are enough for about 100 people, whom are paid salaries, who pay taxes and can use the remaining money to fuel the consumer spending that has been unable to recover after five years of crisis.

Having consolidated its space in the BOC, Honeywell now has room to hire about 300. The US company has three car part plants and a service center in Romania.

Deutsche Bank rented 6,000 square meters for the technology center it plans to develop in Bucharest, where it will hire 250 software engineers by March next year. The headcount will increase to 500 by 2016.

BOC has a lettable area of 57,000 square meters and is the largest individual office building in Bucharest. Its owners are Deutsche Bank and businessman Ioannis Papalekas. Space became available in this building after Raiffeisen Bank moved to its own office building on Barbu Vacarescu (northern Bucharest).

Next biggest transactions on the office space market were the rental by Ernst & Young of 4,500 square meters, Generali, 4,000 square meters, Michelin, 4,000 square meters, BitDefender, 3,820 square meters and EximBank 3,800 square meters. The rentals were motivated by the desire to improve working conditions and possible get lower rent costs rather than aggressive expansion plans.

BitDefender leased about 600 square meters more in Delea Veche 24 (Calea Calarasilor, close to the city center) than it had in its old West Gate office, which means growth and development expectations from IT and telecom sector.

Two more deals signed this year by mobile phone operator Vodafone and IT company TeamNet show technology companies are among those driving demand for office space. Vodafone expanded from 1,200 square meters to 3,600 square meters in Avrig 3-5 near Piata Obor (Obor Market, close to the city center), while TeamNet reserved another 2,400 in Green Gate, in SW Bucharest, so it now occupies almost 11,000 square meters.

Oil group Rompetrol, too, signed a lease for more than 1,000 square meters to expand the space occupied in City Gate towers in Piata Presei Libere (Free Press Square, northern Bucharest). Most contracts, however, were renegotiated or signed for lease renewal for existing space, which shows the number of companies with clear plans to expand is rather low.

(English version by Loredana Fratila-Cristescu)

Source: data centralized by ZF