However, statistical figures on the trend of the number of employees in Bucharest do not indicate a very fizzy labor market. On the contrary, during September 2013-February 2014, the trend was a downward one, according to National Statistical Institute data.
Thus, while in September 2013 Bucharest had 907,000 employees, with 702,000 of them working in the services field, in February 2014 the number had slid to 892,700, with 691,000 in services.
The IT sector and the services centers a series of multinationals have decided to open in Bucharest have indeed given hope to real estate players, but other fields, such as financial services, have contracted further and the impact will also be seen in real estate.
In this context, office developers are primarily counting on attracting tenants from other buildings and to do this they need to offer better work conditions at competitive prices, which is dragging rents down.
According to ZF data, over 50,000 square meters of the 130,000-sqm office spaces completed in the past six months are vacant for the time being (around 40%), while at the level of the entire city offices of around 350,000 square meters are empty (an over 15% vacancy rate), according to real estate consultants.
New entrants in Bucharest include the technology arm of Germany’s banking group Deutsche Bank or AMOS services arm of insurer Allianz, each set to create several hundred jobs.
At the same time, companies such as Ericsson, Endava, Genpact or Electronic Arts have recently made moves indicating a rising appetite for expanding operations in Bucharest, but these are not offsetting, for the time being, the declines in other fields.
This year’s largest office market deals involved mobile telephony operators Vodafone (which rented 16,000 square meters in Bucharest One) and Orange (which rented 13,700 square meters in Green Court), companies that have not announced plans to increase headcount. Moreover, by signing these contracts, the companies are leaving behind major holes in other office projects which the current business environment does not seem capable of filling for the time being.
(English version by Catalina Apostoiu)