Office space demand in Romania, up 43% quarter-on-quarter in Q2

The net office space demand increased by 43% in Romania in the second quarter compared to the first quarter of 2019, to around 60,000 square meters (sqm), according to JLL Romania.

Net demand accounted for 52% of the volume of rental transactions recorded in the April-June period. For the first half of the year, net demand amounted to almost 43% of the total traded.

JLL Romania said that the second quarter of 2019 reconfirmed the increased interest for the office market in Romania. Over 115,000 sqm of office space were rented over this period at national level, a value similar with that registered in the second quarter of 2018.

In total, 239,500 sqm of office space were leased nationwide in the first half of 2019, up 17.6% from the first six months of 2018, when approximately 203,600 sqm were rented.

Transactions concluded in the first six months of 2019 represent about 60% of the total volume registered last year, nearly 400,000 sqm. If the current pace is maintained in the last two quarters of the year, then the overall level of 2018 could be exceeded by at least 20%, JLL Romania said.

"The office market continues to perform in 2019, showing that this real estate segment has reached a certain maturity state. The presence of professional developers, with rich experience and strategies in line with the new tenants' requirements, has helped the market to mature. This translates into a balance between supply and demand and slightly fluctuations in vacancy rates and average rents," said Marius Şcuta, Head of Office Department and Tenant Representation JLL Romania.

By sectors, most of the tenants that rented office space in the second quarter were companies active in IT, medical and pharmaceutical, and manufacturing. Meanwhile, by cities, Bucharest attracted the highest volume of transactions, respectively 101,500 sqm (representing 88% of the national total), followed by Cluj-Napoca (approximately 6,200 sqm), Timisoara (almost 4,000 sqm) and Iaşi (3,550 sqm). The most popular office areas in Bucharest were Floreasca - Barbu Văcărescu, CBD, North-Expozitiei and Dimitrie Pompeiu.

In Bucharest, three office projects were delivered in Q2 of 2019, which totaled 85,500 sqm. These were Business Garden Bucharest, Timpuri Noi Square 3 and Oregon Park - Building C.

Projects amounting to 92,800 sqm were delivered in the capital city in the first quarter of this year. Thus, in the first half of the year, the office stock increased by 178,300 sqm, representing a 6.7% increase in the existing stock at the end of last year. By the end of this year another 155,700 sqm of office space will be delivered, so the new spaces completed in 2019 will reach at least 334,000 sqm, according to JLL Romania. At the end of the year, the stock is expected to reach nearly 3 million sqm if all the announced projects are completed.