“In the first quarter, two office buildings were delivered, having a total rentable area of 37,000 sqm- City Offices and Auchan Tricodava. For the rest of the year, new supply is projected to be of 130,000 sqm in office buildings such as Bucharest One and Green Court – B in central-north submarket , George Enescu OB in central area, PC Business Center in north and AFI Business Park IV&V and Sema Office 3 in west ,” DTZ Echinox said in a statement.
Leasing activity (take-ups and renegotiations) totaled 56,000 sqm in the first quarter, down 8% compared with the corresponding period a year earlier.
Take -up represents 71%, with 40,000 sqm transacted, and is divided between expansions/
new operations – 58%, relocations within A&B class office space – 31% and relocations from old stock to modern office space -11%. Most of the take-up was recorded in central-north submarket -61%, followed by Pipera south – 15% and central business zone – 7%.
Another 16,000 sqm were subject to renegotiation and renewal transactions, half being concluded in Pipera south. The trend observed throughout 2014 continues, thus only tenants fully satisfied by their current location opted for renegotiation.
The largest transactions by area were Oracle, with 10,000 sqm in Sky Tower, and Carrefour, pre-leasing 7,000 sqm in Green Court – B, both office projects being located in Barbu Vacarescu – Floreasca zone. Excluding the above, average deal size was 600 sqm, and only six transactions exceeded 1,000 sqm in the first quarter.
The most active tenants continue to be IT companies, followed by retail and professionals service companies.
Bucharest’s general vacancy rate for class A & B office space reached 14% in the first quarter, up by 70 percentage points on the year. In Bucharest, there are currently 309,000 sqm vacant office spaces, with 25% located in Pipera north zone.
The lowest vacancy rates are in business central zone (Victoriei – Aviatorilor) – 5% and in the west submarket- 6%.
The central-north submarket has a general vacancy rate of 10%, being the only submarket facing a sharp fall in vacancy. Barbu Vacarescu – Floreasca, with an office stock of 280,000 sqm, has a vacancy rate of 7.5% in the first quarter.
Prime headline rent remained stable in the first three months, at around EUR18.5/sqm/month.