In a sector where rents of around 250-300 million euro are paid annually, according to ZF estimates, some owners currently have just half of buildings filled, while others are getting close to the 100% level, reveals a ZF survey.
ZF asked for information the largest investors–which bet over EUR1 billion on the Bucharest office market hoping the city would become a major regional business hub.
Immofinanz group is still the biggest owner of offices in Bucharest. With a portfolio of 206,000 square meters, it virtually holds 10% of the city’s office stock.
At the end of October 2013, the Austrian-held group had an 80.2% occupancy rate, down from 87.3% a year before. The group says the level of rents in Bucharest ranges between 10 and 18 euros/square meter per month.
P&G, a major tenant of Immofinanz, decided to bring to IRIDE project of Pipera the operations it carried out in Novo Park, a project held by Liviu Tudor, a businessman with an office portfolio of 150,000 square meters in Bucharest, the second largest.
Even so, over the past year, Tudor has managed to lift the occupancy rate for his portfolio from 96% to 97%, as SocGen decided to expand the space rented in West Gate project (Militari area of the city), while a new tenant, Sodexo, was attracted in Novo Park Pipera.
While Immofinanz last year cemented its relationship with IBM, Liviu Tudor managed to secure the most important tenant of his portfolio, HP, on the long term.
Austrian-held CA Immo, the third largest office owner in Bucharest with a 106,000-sqm portfolio, also managed to secure a large part of tenants last year, by extending contracts with firms such as British American Shared Services Europe (BASSE), Ipsos or Thales.
Thus, its occupancy rate has lost only one percentage point over the past year, falling from 99.55% to 98.42%.
Pipera-Tunari is still the most “problematic” area of Bucharest, but some owners managed to improve their occupancy rates last year.
Around 120,000-130,000 square meters of new offices are set to be delivered this year in Bucharest, while consultancies expect the level of transactions to revolve around 300,000 square meters.
In this context, the vacancy rate is likely to drop, but the market will still be a tenants’ market this year, so that each owner will strive to keep its buildings filled.
(English version by Catalina Apostoiu)