“The office market is going through a period of multiple challenges, reflecting economic uncertainty and inflationary pressures, which discourage companies from expanding. Thus, the market’s return to pre-pandemic levels is also delayed. While we are not seeing an increase in volumes, we are seeing an increasing preference for Class A space of the highest quality,” said Alexandru David, Head of Research JLL Romania.
In the third quarter of 2022, only one office building was delivered in Bucharest, namely H Tudor Arghezi 21, with a leasable area of approximately 7,000 square meters, developed by Hagag near Bucharest’s University Square.
In the first nine months of 2022, the volume of deliveries was at a low level, with 105,000 sqm completed in Bucharest, compared to 154,000 sqm in the same period of 2021.
By the end of 2022, two more office buildings are to be delivered in Bucharest, totalling a leasable area of approximately 54,000 sqm, namely the second phase of One Cotroceni Park, with 34,500 sqm, a project developed by One United Properties, and Equilibrium 2, with 19,500 sqm, developed by Skanska.
For 2023, even fewer deliveries are expected compared to 2022, namely, around 70,000 sqm, which can be explained by the inflationary impact on construction costs and companies’ expansion plans.
The vacancy rate on the Bucharest office space market increased slightly in the third quarter of 2022, from 12.75% in the previous quarter to 13%, amid lower net demand.
After an increase in the second quarter of 2022, from EUR18.5 per sqm per month to EUR19 per sqm per month, prime rents remained at the same level in the third quarter. However, in the context of inflationary pressures, further rent increases are possible in the coming quarters.