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Iulian Ernst
Senior Editor

Iulian studied physics at the University of Bucharest, and he sees himself as a physicist in the broadest sense of the word. He also studied economics at Charles University in Prague and Central European University in Budapest, after a master’s program in business administration at Bucharest Academy of Economic Studies. Since recently, he’s been exploring coding and data analysis for business and economics. As a freelancer, he worked for nearly two decades as an analyst for ISI Emerging Markets, Euromonitor International, Business New Europe, but also as a consultant for OMV Petrom and UkrAgroConsult. Iulian was part of the founding team of Ziarul Financiar. At Romania Insider, which he joined in 2018, he is reviewing the latest economic developments for the premium bulletins and newsletters. He would gladly discuss topics such as macroeconomics, emerging markets, Prague, energy sector including renewable, Led Zeppelin, financial services, as well as tech start-ups and innovative technologies. Email him at iulian@romania-insider.com. 

 

JLL's Bucharest City Report Q1 shows office market overflowed by new deliveries

JLL's latest market report highlights "a differentiated evolution of each market segment" in the first quarter of the year (Q1) in terms of demand [traded volume], with the segment of industrial and logistics spaces still in focus.

"New deliveries have fallen significantly for almost all asset classes," JLL's report states, speaking of Q1 figures.

However, the forecast included in the report reveals expectations for a robust recovery in the volume of deliveries later in the year. In fact, the office market seems overflowed at least in the short term - although the "work-from-home" drive, its sustainability more precisely, may be overrated these days as well.

"After 155,200 sqm of new offices delivered in Bucharest in 2020, the pipeline for 2021, including what was already delivered during Q1, totals almost 256,000 sqm," the report reads - pointing to an annual increase of 65% yoy.

The increase from last year to this year (some 100,000 sqm) may not mean much for the total stock of office spaces in Bucharest (3 mln sqm) - but in the context of high and rising vacancy rates, this is still relevant. The vacancy rate continued to increase in Q1, from approx. 11.3% during the previous quarter, to 13.4%.

Considering that the vaccination campaign against COVID-19 is likely to take the whole year, the return to the office is expected to be gradual. This, combined with significant new deliveries, will probably further increase the vacancy rate, the JLL report concludes.

The new deliveries on the retail market are expected to grow this year as well. After 148,600 sqm of GLA were completed during 2020, JLL estimates that approximately 156,000 sqm of shopping centres and retail parks are awaiting delivery in 2021 (including the already opened Sepsi Value Center in Sfantu Gheorghe). The stock of GLA in Bucharest was 1.18 mln sqm at the end of Q1.

In the industrial segment, developers are still working on projects of 690,000 sqm (after only 30,700 sqm of new industrial and logistics spaces were delivered during Q1 2021). For comparison, in 2020, the deliveries of new projects were 590,000 sqm. By the end of the year, the total stock on this segment is expected to reach almost 5.8 mln sqm.

iulian@romania-insider.com

(Photo source: Dreamstime.com)

Normal
Profile picture for user iuliane
Iulian Ernst
Senior Editor

Iulian studied physics at the University of Bucharest, and he sees himself as a physicist in the broadest sense of the word. He also studied economics at Charles University in Prague and Central European University in Budapest, after a master’s program in business administration at Bucharest Academy of Economic Studies. Since recently, he’s been exploring coding and data analysis for business and economics. As a freelancer, he worked for nearly two decades as an analyst for ISI Emerging Markets, Euromonitor International, Business New Europe, but also as a consultant for OMV Petrom and UkrAgroConsult. Iulian was part of the founding team of Ziarul Financiar. At Romania Insider, which he joined in 2018, he is reviewing the latest economic developments for the premium bulletins and newsletters. He would gladly discuss topics such as macroeconomics, emerging markets, Prague, energy sector including renewable, Led Zeppelin, financial services, as well as tech start-ups and innovative technologies. Email him at iulian@romania-insider.com. 

 

JLL's Bucharest City Report Q1 shows office market overflowed by new deliveries

JLL's latest market report highlights "a differentiated evolution of each market segment" in the first quarter of the year (Q1) in terms of demand [traded volume], with the segment of industrial and logistics spaces still in focus.

"New deliveries have fallen significantly for almost all asset classes," JLL's report states, speaking of Q1 figures.

However, the forecast included in the report reveals expectations for a robust recovery in the volume of deliveries later in the year. In fact, the office market seems overflowed at least in the short term - although the "work-from-home" drive, its sustainability more precisely, may be overrated these days as well.

"After 155,200 sqm of new offices delivered in Bucharest in 2020, the pipeline for 2021, including what was already delivered during Q1, totals almost 256,000 sqm," the report reads - pointing to an annual increase of 65% yoy.

The increase from last year to this year (some 100,000 sqm) may not mean much for the total stock of office spaces in Bucharest (3 mln sqm) - but in the context of high and rising vacancy rates, this is still relevant. The vacancy rate continued to increase in Q1, from approx. 11.3% during the previous quarter, to 13.4%.

Considering that the vaccination campaign against COVID-19 is likely to take the whole year, the return to the office is expected to be gradual. This, combined with significant new deliveries, will probably further increase the vacancy rate, the JLL report concludes.

The new deliveries on the retail market are expected to grow this year as well. After 148,600 sqm of GLA were completed during 2020, JLL estimates that approximately 156,000 sqm of shopping centres and retail parks are awaiting delivery in 2021 (including the already opened Sepsi Value Center in Sfantu Gheorghe). The stock of GLA in Bucharest was 1.18 mln sqm at the end of Q1.

In the industrial segment, developers are still working on projects of 690,000 sqm (after only 30,700 sqm of new industrial and logistics spaces were delivered during Q1 2021). For comparison, in 2020, the deliveries of new projects were 590,000 sqm. By the end of the year, the total stock on this segment is expected to reach almost 5.8 mln sqm.

iulian@romania-insider.com

(Photo source: Dreamstime.com)

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