The rising demand on the office space market in the city took the vacancy rate down from 15% to 14% in the first nine months of the year. The biggest buildings to be delivered by yearend are already rented, so the vacancy rate decline trend will continue on short term.
RTR decided to renew its lease for a 20,000 square meter space in the North Gate building in Pipera, north of the city. Vodafone will consolidate its operations into a 16,000 square meter space in Bucharest One tower under construction next to the Promenada mall, also in the northern part of the city, while Orange has begun relocation to a 14,000 square meter space in Green Court, which Sweden’s Skanska has recently completed.
Those were the only deals for more than 10,000 square meters signed since the beginning of the year, while Microsoft, DB Schenker and Telus each rented 6,000 square meters in City Gate, Hermes Business Campus and AFI Business Park.
Microsoft decided to renew its lease in City Gate and even move there the operations housed in a building behind the National Theater in downtown Bucharest. DB Schenker chose Bucharest to develop a shared service center for its financial department, while Canadian outsourcing services group Telus has big expansion plans for its business in Romania, where it wants to boost employee numbers from 480 to 3,000.
How significant is the signing of a large office space deal? Each 1,000 square meters are enough for 100 to 150 desks, while developers charge EUR100,000 to EUR200,000 in rent a year depending on the quality and location of the building.
Bucharest has a 2.2 million square meter stock of office space and real estate consultant CBRE Romania says that new buildings offering about 460,000 square meters of space might be delivered in the next two years, enough to accommodate about 50,000 employees.
“The encouraging thing since the beginning of the year is the trend of the net demand, that is office space rented by new companies and expansion, the organic growth. This new demand, coming from companies with long-term plans stood at almost 100,000 square meters and contributes to the restart of projects frozen by the crisis,” says Andreea Paun, associate director with real estate consultant Colliers International.
“Mostly companies from the US and Germany are choosing to open offices in Bucharest and bring with them an entire chain of business.”
“The pre-lease market has clearly rebounded hence the projects that started in Bucharest. Last year’s trend continued, with new names arriving on the market like Deutsche Bahn, Kellogg’s, Allianz and Idea, after Deutsche Bank, Honeywell and Electronic Arts brought new divisions in Romania last year,” says Maria Florea, head of office agency with real estate consultant JLL Romania.
“As a result, landlords like AFI Europe and Skanska are engaging in speculative developments.”
The most important office space projects scheduled for delivery by yearend are the third building of the AFI Business Park and the Ethos House on Calea Floreasca. The two, as well as the first building in the Green Court complex are almost fully rented so they will not boost the vacancy rate.
(English version by Loredana Fratila-Cristescu)