The modern office stock in the Center-West area reached 523,000 square meters at the end of 2021 and is expected to increase to 614,000 sqm by the end of 2022. As a result, this sub-market will account for 18% of the total office stock in Bucharest.
By comparison, the projects under development in the Floreasca-Barbu Vacarescu area totaled 569,700 sqm at the end of 2021, with no new deliveries being planned for 2022. Therefore, the stock in this area will be lower compared with that in the Center-West at the end of this year and it will account for 16% of the total office stock in the capital city.
According to the Bucharest Office Market report, only three out of the 11 office sub-markets in Bucharest will benefit from new projects in 2022, namely Center-West, Center and Expoziției, with the new supply amounting to 136,800 sqm.
“The evolution is mainly influenced by the lack of land plots suitable for office projects in the Floreasca-Barbu Văcărescu area, an area responsible for more than a third of the new supply in Bucharest between 2013 and 2021. Demand remains strong for this sub-market, taking into account the volume of transactions registered during the last few years and also the vacancy rate which is below the market average. For the coming period, there are strong premises for a reduction of the average vacancy rate in Bucharest, given the difficulties related to authorization process, in the context of the blocked local PUZ, which will generate a reduction of the new office projects supply, in a market where the annual demand still remains at around 300,000 square meters,” said Eduard Turcoman, Director Office Agency Cushman & Wakefield Echinox.
In terms of the vacancy rate, there is a wide gap pertaining to the 11 sub-markets analysed by the Cushman & Wakefield Echinox report, with the highest levels being recorded in Pipera North and East, and the lowest in the West, Dimitrie Pompeiu and Center sub-markets.
Vacancy rates above the market average are also recorded in North and South.
“We notice a higher vacancy rate in buildings which have been completed more than 10 years ago and also in properties without direct access to the metro. Considering that the new projects bring the highest innovative technologies, materials and building solutions to the market, they are constantly preferred by tenants over older buildings, thus generating large unoccupied areas,” the report reads.