Companies are still looking for qualitative upgrades, in capital city Bucharest, despite a slowdown in deliveries, also impacted by the evolution of hybrid working. While in Europe 60% of companies have downsized their offices, in the region of Central and Eastern Europe (CEE), including Romania, the volume was at 42%, as per CBRE’s 2023 European Occupier Survey.
“We can see that at the CEE level the show-up rate in offices is higher compared to the rest of Europe and Bucharest makes no exception. Continued strong demand for the best quality space will cause demand for development or refurbishment to remain high, despite overall levels of demand falling. As the importance of sustainability credentials for occupiers and landlords grows, this will lead to a larger split in rents and values across different categories of office stock. Hybrid work and office utilization will remain in focus. Companies will work to find an optimal balance between office operations and the space they need for each employee,” said Tudor Ionescu, Head of A&T Services | Office.
For the first time, CBRE carried out the same survey for global companies operating in CEE to point out major differences in workplace culture across various regions.
CBRE data also show that the registered vacancy rate in Bucharest is 15,1%, which is 1 percentage point higher compared to the vacancy rate at end-Q4/2022, and also the highest since 2013, while the take-up of office space is expected to be lower in 2023 than it was in 2022, in line with market data.
Companies are still shaping their post-pandemic office policies in CEE: half of the companies surveyed stated that their office usage has not settled yet and is expected to increase over time. The vast majority of the companies in CEE (76%) are expecting their new office strategy to be finalized within the next 12 months, distinctively earlier than companies in the whole Europe. Poorer quality, or poorly located office space, will underperform in 2023. Also, buildings that do not match the environmental goals of large occupiers will be the most difficult to let and are likely to experience long void periods, according to the survey.
However, the CBRE survey shows clearly that, in CEE, the desired position for companies is to have employees split their time between office and remote locations, with a slight office advantage. The typical weekly office show-up rate in countries from CEE is currently between 26 and 60%, although for over half of the surveyed companies, this is not a settled pattern. The hybrid model typically means two or three days of office presence for 77% of the surveyed companies.
In the local market, the vacancy rate is expected to remain relatively stable also because of the delays caused in office projects by increased construction costs, labor shortages, supply chain issues and lack of permitting in Bucharest. A growing emphasis on tech-enabled and wellness-capable buildings are main focus, also in order to foster a sense of community among employees.
As companies are embracing flex work, the workspace often gets packed on a smaller footprint, but with an increased investment in the workplace social role, as employee preferences have also impacted building-selection criteria.
According to the survey, when selecting locations, access to public transport is deemed top priority in most markets – slightly more so in CEE. While car parking is still dominant in location selection, “ease of commute” factors such as electric vehicle (EV) charging points (52%) and bike or scooter storage (38%) are also becoming more relevant. Among other important considerations are: sustainability (58%), availability of on-site food & beverage (60%), but also access to various amenities including shared meeting space, fitness and wellness facilities and flexible space were also identified as important considerations.