Total office leases in Bucharest, up 54% in Q1, but new demand goes down

Companies leased a total of 105,000 sqm of office space in Bucharest in the first quarter of 2019, up 54% compared to the same period of 2018, according to data provided by real estate consultancy firm Colliers International.

“Enthusiasm needs to be slightly toned down: although there is still very healthy demand for new or qualitative projects, we have to peel away renewals and relocations from competitive stock to reach net take-up. These relocations tend to create vacancy and they stood at a sharp 54,000 sqm in Q1 2019 versus 102,000 sqm for all of 2018. As a result, new demand decreased by over 20%, to 29,000 sqm, which is still a decent level,” said Sebastian Dragomir, Director Office Advisory at Colliers International.

IT&C is the most active sector in terms of leased surfaces, with close to two-thirds of the total take-up, followed at a great distance by financial & banking (16%) and professional services (a bit over 10%).The highest demand was recorded in the West and Central West areas.

Some 93,000 sqm of new office space was delivered on the Bucharest market in the first quarter, taking the total modern office stock to 2.5 mln sqm.

By year-end, additional offices with a total leasable area of around 250,000 sqm could come online, according to Colliers estimates. The firm’s specialists also expect rents to come under pressure in the second half of this year as the significant deliveries expected in the following period and the tight labor market, which is affecting demand for new offices, could shift market conditions in favor of the tenants.

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