Cushman & Wakefield Echinox: Bucharest office take-up hits record level in 2023

Roughly 116,000 sqm of office spaces were leased in Bucharest in Q4 2023, bringing last year’s total transactional volume to over 463,000 sqm - an all-time annual take-up record, according to data from real estate consultancy company Cushman & Wakefield Echinox. The total figure is 43% higher year-over-year and also marks a 19% increase compared with the previous benchmark of 390,000 sqm set in 2019.

The net take-up, excluding renegotiations and renewals of existing contracts, had a share of only 46% in the total leased volume in Q4 and 44% across 2023, the same source said. This means that companies leased new offices for at least 20,000 extra employees, primarily working in the IT&C, manufacturing, financial, retail, and medical sectors.

Cushman & Wakefield said it was a market leader in Bucharest, closing total transactions of 104,000 sqm in 2023, which represents a share of 25.5% in the volume brokered by real estate agents.

Arghezi 4 (8,000 sqm GLA) was the only office project delivered in Bucharest in Q4, bringing the total 2023 new supply to 110,500 sqm, the lowest level since 2015.

“The Bucharest office stock stands at around 3.4 million sqm, with the pipeline being very low, as only 2 projects are currently under construction (amounting to 42,500 sqm GLA), which is a direct consequence of the ongoing urbanistic/permitting issues,” reads the company’s press release.

Only one new building is due to be delivered in 2024, namely AFI Loft (15,000 sqm), which again marks an all-time low in terms of new supply.

The (contractual) vacancy rate of office spaces stands at 14.7%, down from 15.2% at the end of 2022. According to Cushman & Wakefield Echinox, the vacancy rate should remain on this downward trend, “especially when considering the uncertainties regarding the delivery of new projects, and mainly in buildings located in ultra-central and central locations.”

Mădălina Cojocaru, Partner Office Agency at Cushman & Wakefield Echinox, commented: “While analyzing the office leasing market in the past 3 years, we noticed that more than 1 million sqm of such spaces were transacted in Bucharest, representing approximately 33% of the total stock. This volume was practically recorded in a period characterized by new market fundamentals, where companies configured their strategies concerning their office space needs. This led to a downsizing of occupied areas for some tenants, but also to keeping or even expanding the leased spaces in the case of most occupants.”

(Photo source: the company)