Bucharest has a total modern office stock of 2.6 million sqm and the vacancy rate grew marginally to 10% at the end of June from 9.5% at the end of 2018 and 9% at the end of June 2018.
The biggest projects delivered in this interval were the new headquarters of Renault (47,000 sqm), Business Garden Bucharest (over 41,000 sqm), The Mark and the third phase of Oregon Park (around 25,000 sqm each), Timpuri Noi Square – building C and phase two of The Bridge (around 20,000 sqm).
New deliveries had occupancy rates of 75-80% on delivery, the real estate consultancy firm noted.
Total rent demand for modern office stock in Bucharest stood at 188,000 sqm in the first half of the year, the best half-year since the financial crisis. Relocation from other modern office buildings (competitive stock) amounted to 86,000 sqm and new demand dropped to 49,000 sqm.
Office markets in regional cities, where total demand nearly doubled to 30,000 sqm, have lower vacancy rates. Iasi almost has no vacant modern office stock left, while the vacancy rate in Cluj-Napoca is below 10%.
“The Bucharest office market remains dynamic as another 150,000 sqm of modern office stock will be delivered in the second half of 2019 and over 230,000 sqm will be delivered in 2020. We expect the vacancy rate to rise gradually towards 13% but the impact of relocations is felt later, considering most are pre-leases and some will be completed in 2020-2021,” said Silviu Pop, Head of Research at Colliers International Romania.
In terms of investments, funding entries in Poland lagged behind (-20% on year in 1H) after a good first half in 2018, while projects in Romania picked up in the second quarter after a weaker first quarter.
Investments in Romania stood at EUR345 million in the first half, similar to the same period last year, according to Colliers.
In Central and Eastern Europe, the office segment remained dominant and grew 43% on the year in the first half. Romania followed the same trend and office stock transactions generated around 62% of real estate investments.