Office vacancy rate in Bucharest drops to new low in 2018

The vacancy rate on the Bucharest office market dropped last year to a historic minimum of about 6,6%, compared with 9.2% at the end of 2017.

The decrease occurred on the background of a lower development activity compared to the demand of office space, according to real estate consultancy firm JLL.

Last year, developers completed new office projects totaling 145,000 sqm, as the surface leased through real estate consultants was 335,000 sqm, of which 45% (150,000 sqm) represented new demand (pre-leases, new contracts, extensions of existing surfaces and relocations from other buildings than Class A and B buildings). Considering direct transactions between tenants and landlords, the leased area far outstripped the new offer put on the market by developers.

"Even though there are significant differences between the 12 office sub-markets in Bucharest in terms of office space available, the vacancy rate continued to decline in 2018 to a historic minimum, amid a relatively modest development activity in 2017 and 2018. Net demand remained at comparable levels over the past two years, around 150,000 sqm, absorbing the new offer," said Marius Şcuta, Head of Office of the Agency and Tenant Representation JLL Romania.

In 2019, if all the announced projects are completed, the stock will grow by about 300,000 sqm, of which 50% is already pre-leased.

The fewest available spaces are currently in the Center-North, Floreasca Barbu-Vacarescu, Center, Center West and Central Business District (CBD) areas, where the vacancy rate is below 5%, while in the Baneasa and Pipera Nord are located most of the empty spaces, according to JLL.

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