“Major corporate players with offices established in Bucharest have also targeted regional cities over the past years to expand their operations, being lured by skilled and educated workforce, salary levels and total rental costs. For instance, occupancy costs (rent + service charge) of class A office spaces in regional cities are nearly 20%-25% lower than in Bucharest,” said Madalina Cojocaru, head of office department at DTZ Echinox.
Cojocaru also said that for companies operating in the Tehnologic &Telecom sector, choosing a location in a regional city is an option which, on a long term, triggers economic advantages.
With a total 150,000 square meters of office space, mostly class B, the northwestern city of Cluj Napoca holds the top spot in terms of office space stock. It is followed by northeastern city of Iasi with 120,000 sqm, western city of Timisoara with 100,000 sqm and Brasov with 80,000 sqm, according to the latest DTZ Echinox study regarding the office space market in Romania’s main regional cities.
The total volume of new office spaces to be delivered in 2014 in the four cities reaches 52,000 sqm, mostly in Cluj Napoca (42,000 mp). A total 10,000 mp and 9,000 sqm will be delivered in Iasi and Timisoara, respectively, while in Brasov, new office spaces are due to be delivered in 2015.
Should all projects announced be delivered, the modern stock of office spaces in Cluj Napoca will double by 2016 and reach 300,000 sqm.
Rental rates for class A spaces is similar in Cluj Napoca, Timisoara and Brasov, ranging between EUR12-EUR14/sqm/month. the situation in Iasi is a bit different, with class A office rents reaching EUR13.5 –EUR15/sqm/month. Class B office space rents range from EUR7 to EUR11/sqm/month in all the cities included in the study.
The vacancy rate for class A office spaces is below 10% in Cluj, Timisoara and Iasi, and slightly higher in Brasov, to around 15%. The vacancy rate in Brasov for class A office spaces prompted real estate developers to slow down the construction pace this year.
Office space demand comes mostly from companies operating in the financial, tehnologic&telecom sectors.