Vacancy rate on Bucharest office market to rise toward 13%

The stock of modern office space in Romania’s capital city will grow by over 500,000 sqm in 2019 and 2020 and reach about 3.5 million sqm, according to an analysis by real estate consultancy company Colliers International Romania.

Such high inflows can generate +/-5% variations in the market values of the office buildings during the analyzed period.

To estimate the impact of new deliveries on the market value, Collier has included three indicators in the model: the average vacancy rate, the complexity of the benefits packages that the owners offer to the tenants, and the compression of yields.

Some 185,000 sqm of modern office space were delivered in the first half of 2019 in Bucharest, another 150,000 sqm of office space will be launched in the second half of the year, and over 230,000 sqm in 2020.

Under these conditions, the vacancy rate of 10% recorded at the end of June 2019 could gradually increase to 13% by the end of 2020. Such an evolution of the vacancy rate may affect the market value of office buildings, which could decrease by about 3-5% in the indicated period.

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