With an average level of EUR943 per sqm of office space, the cost in Bucharest is 32% below those in Warsaw (EUR1,250) and Prague (EUR1,252) and 25% above the average cost in Sofia (EUR750), the least expensive market in the region.
“Although the prices of raw materials have not increased significantly during the past year, the finished goods which involve labor force, utilities, and transportation continued to be on an upward trend, as labor, material, and equipment costs have the biggest impact on office fit-out prices”, said Andrei Ianculescu, head of project management at Cushman & Wakefield Echinox.
The budgets can range from EUR700 to more than EUR1,400/sqm depending on the project complexity, the materials and the solutions used, but also on the technical and security systems implemented, Cushman & Wakefield Echinox said.
The costs related to fit-out works, architecture, and installations (51%) and those for furniture (30%) have the largest shares in the total cost while also being the ones most impacted by the price increases. Audio-video (AV) and IT systems, as well as project management and design services, are the other major components of any office fit-out project.
According to the same report, legislative changes also impact office fit-out costs, bringing new regulations in the field. “[…] we can mention here the obligation to have a fire detection system in the floor, but also the need for quality and visual impact, as well as aligning to the employees’ expectations”.
Cushman & Wakefield Echinox specialists expect the fit-out cost pressure to ease in line with the softening inflation. Still, they believe the wider environment is being complicated by the overall geo-political uncertainty, as the costs in question will continue to increase, albeit at a slower pace.
The Cushman & Wakefield Echinox Project Management Department has carried out projects with a total area of 300,000 sqm of office, retail, industrial, and logistics spaces over the last two years, both for landlords and tenants. The completed office projects involved a budget of around EUR 30 million, while the largest assignment carried out in terms of the incurred budget accounted for more than EUR5 million.