The enriched offer in 2018 and 2019 will lead to increased transactions. The market will remain dynamic in 2018, and the completion of 243.000 square meters office spaces (of which more than 102,000 postponed from 2017) will boost the rentals volume. The mature companies and a large part of the young and dynamic companies in the market will focus especially on the new office projects, a trend characteristic of the economic expansion periods.
At the beginning of 2018, the office stock available for rent in Bucharest is 682.000 sqm, 84% of which located in business centers (A, B and C class) and 16% in villas or similar buildings.
Notes: In this volume of spaces available for rent are included only the buildings delivered/ completed by the end of 2017.
The data is extracted from the ESOP database, probably the most extensive offices portfolio of a real estate company in Bucharest.
The total office stock in Bucharest amounts to over 3,28 million square meters at the beginning of 2018, out of which over 2,85 million square meters in A and B class buildings.
THE AVAILABLE STOCK IN THE EXISTING BUILDINGS
Out of the stock of available space for rent, approx. 41% are in A / A- Class business centers (of which only 7% are prime locations, the rest in central and semi-central locations), 37% are B Class, respectively 22% C Class buildings.
The largest office stock available in completed buildings is located in the Central-North area (Aviatorilor – Caramfil – Barbu-Vacarescu perimeter), namely 155.000 sqm, representing 27% of the available space stock), followed by the North area (Baneasa, Pipera) with 107.200 sqm, respectively the Central-West area, with 73.100 sqm available.
DELIVERIES IN 2017 IN BUCHAREST
During 2017 was delivered a total volume of approx. 144.000 sqm office spaces, of which 45% in the Central-West area, unlike the previous years when the Central-Nordth area had the largest share. In 2017, the Central-North area recorded 26%, followed by South-Central area with 24%.
More than 77% the projects delivered in 2017 were rented by the end of the year.
It should be noted that the volume of deliveries announced at the beginning of 2017 was approx. 246.000 sqm. From this estimate, 102.000 sqm offices were delayed for the first half of 2018 (of which 80% in 3 major projects), thus registering a double percentage of postponed projects, compared to the annual average rate (ranging between 15 to 20%).
DELIVERIES ESTIMATED FOR 2018-2019 IN BUCHAREST
For 2018, more than 243.000 sqm of office space is expected to be completed in business centres, while a total volume of 270.000 sqm is announced for 2019.
However, as in previous years, some of these spaces may register certain delays in completion.
Approx. 38% of the offices to be delivered in 2018 are already pre-leased, along with 9% of those scheduled for 2019.
In 2018 most new projects will be delivered also in the Central-West area, with 137.421 sqm (56%), followed by the Ultracentral area, with 63.253 sqm (26%) and the Central-North – 41.411 sqm (17%).
In 2019 the Central-North area will dominate the volume of deliveries, with approx. 75% of the spaces announced to be delivered (namely 203.126 sqm), given the delivery of the first projects in the Exhibition – Presei Libere Square area, amounting approx. 80.000 sqm.
SPACES IN VILLAS
The stock of office spaces available in villas in the ESOP portfolio at the beginning of 2018 is of approx. 112.000 sqm.
More than 33% of these spaces are located in buildings in the North-Central area, and approx. 23% of them in the Ultracentral area.
In the past 3 years, the demand for space in villas has declined progressively, with companies – often even the start-ups – preferring the business centers.
In Bucharest, the office volume traded in 2017 was at a level of approx. 308.000 sqm, slightly higher compared to the 2016 transactions, and by 6,6% higher than the the last 3 years average level.
Notes: The information within this chapter is based on the data collected within The Research FORUM of the main commercial real estate companies in Romania, of which ESOP is part.Of the total transactions, the Renewal/Renegotiations represented only approx. 26% (79.000 sqm), while 74%, namely 229.000 sqm were represented by the (Pre) Lease and Expansion transactions.
(PRE) LEASES AND EXPANSIONS, BY AREA
Nearly 60% of total Pre-Lease and Expansion transactions were made in the Central-North area, amounting 135.000 sqm. The second place is taken by in the Central-West area, with over 49.000 sqm, representing about 22%, the area being in full ascension in the context of important deliveries of new projects in 2017 and in the near future.
The lowest activity level (0,55%) was registered in the Central-Eastern area, which is a significantly less developed perimeter on the office market.
(PRE) LEASES AND EXPANSIONS, BY INDUSTRY
In 2017, the office market engine continues to remain the IT&C, BPO & SSC segment, accounting for 51% of the transactions.
The next major segment was Finance, Banking, Insurance with a share of 16%, while areas such as Construction & Real Estate, FMCG or Media & Marketing had proportions between 3 and 5%.
(PRE) LEASES AND EXPANSIONS, BY SURFACES
The transactions between 1.000-3.000 sqm had the largest share in 2017, respectively 27%, followed by those under 1.000 sqm, with 22%. Four transactions of more than 10.000 sqm have summed approx. 20% of Pre-Lease and Expansions.
RENT LEVELS IN VILLAS.
For villas, whose demand is on a downward trend, rents vary widely, depending on the location and quality standard. The highest rents are found in patrimony villas, those renovated to a high standard reaching levels between 18-25 Euros / sqm. It is a delicate segment, because both supply and demand are limited.
The rent level for more than half of the villas is between 8 – 14 Euros / sqm, usually these are new or renovated buildings in relative central areas. Non-renovated or peripheral areas usually have rents below 8 Euros / sqm.
Tel: 021 – 528.04.40
Tel: 021 – 528.04.40
Tel: 021 – 528.04.40
Tel: 021 – 528.04.40