Developers completed new office projects totaling 145,000 square meters in 2018. Areas leased through real estate consultants was 335,000 sqm, of which 45% (150,000 sqm) was new demand (pre-leases, new contracts, extensions of existing surfaces and relocations from other buildings than Class A and B buildings).
Considering direct transactions between tenants and landlords, the leased area outstrips the new offer put on the market by developers. In addition, some of the spaces delivered in 2018 were already contracted from previous years, JLL said.
“Even though there are significant differences between the 12 office sub-markets in Bucharest in terms of office space available, the vacancy rate continued to decline in 2018 to a historic minimum, amid a relatively modest development of activity in 2017 and 2018. Net demand remained at comparable levels over the past two years, around 150,000 square meters, absorbing the new offer,”said Marius Scuta, Head of Office of the Agency and Tenant Representation JLL Romania.
The fewest available spaces are in the Center-North, Floreasca Barbu-Vacarescu, Center, Center West and CBD areas, where the vacancy rate is below 5%, while the most empty spaces are located in the Baneasa and Pipera Nord areas.
“We see areas where practically there are no options for a potential tenant who wants to expand. Against the backdrop of low availability of premises, we may witness an increase in rents, so those looking for offices need to make quick decisions in this regard. For those who want to move in the first half of this year, the speed of reaction and decision-making is crucial to getting attractive rents. We are currently seeing a gap between the speed of developing new projects and the pace at which companies are expanding, which will most likely begin to reduce this year if we look at the developer plans for 2019 and 2020, namely the construction of about 700,000 sqm of new projects,” said Maria Florea, Head of Office Agency JLL Romania.
The prime rent in Bucharest continued for five years in a row at the level of EUR18.5/sqm /month, with changes at the level of incentives packages offered by landlords.
In 2019, if all the announced projects are completed, the stock will grow by about 300,000 square meters, of which 50% is already pre-leased.
The areas with the lowest vacancy rates will also benefit from the highest deliveries this year. Two large projects, totaling more than 40,000 sqm, will be completed in Floreasca – Barbu Vacarescu, the CBD will increase the stock by 30,000 meters squares, and three projects totaling over 80,000 sqm are announced for the West.
JLL was involved in the the largest office space leases in 2018, being the market leader at national level, with 23% of the total traded, as well as Bucharest, with almost 25%, among the most important transactions being Microsoft (24,200 sqm) or Thales (5,300 sqm).