Bucharest’s modern office stock goes slightly up to 2.2 mln sqm

The modern office stock in Romania's capital Bucharest reached 2.2 million sqm in the first quarter of 2015, up 2% compared to the previous quarter. Two office buildings were delivered in this period, namely City Offices (27,000 sqm), which is the former City Mall, and Auchan Tricodava (10,000 sqm), according to a study by real estate consultancy company DTZ Echinox. Developers are expected to deliver another 130,000 sqm by the end of this year. Some of the office building due to be delivered in 2015 are Bucharest One and Green Court - B in Central North submarket, George Enescu OB in Central area, PC Business Center in North, and Sema Office 3 and AFI Business Park IV&V in West. The leasing activity was 8% lower year-on-year in the first quarter of 2015, reaching 56,000 sqm. Take-up represents 71% and is divided between expansions / new operations (58%), relocations within A & B class office space (31%) and relocations from old stock to modern office space (11%). Most of the take-up was recorded in Central North submarket (61%), followed by Pipera South and the Central Business Area (CBD). The largest transactions by area were the Oracle leasing in Sky Tower (10,000 sqm) and the Carrefour pre-leasing in Green Court – B (7,000 sqm). Both projects are located in the Central North submarket, close to the Aurel Vlaicu subway station. The average size of a deal was of 600 sqm, only six transactions exceeding 1,000 sqm. Technology & telecom companies continue to be the most active office occupiers (42% of the total take-up), followed by companies active in retail (26%) and professional services (15%). Bucharest’s general vacancy rate for class A & B office space reached 14% in the first quarter of 2015, slightly up compared to the same period the previous year. There are 309,000 sqm of vacant office space, with Pipera North accounting for a quarter. No changes were registered in terms of rental levels. Prime headline rent is situated at EUR 18.5 per sqm per month. In CDB, rents for A class office space are between EUR 15 and EUR 18.5 per sqm per month, while in Central North they stay between EUR 15 and EUR 17. In semi-central areas the rents for prime projects are around EUR 12 – EUR 15 per sqm per month, while in peripheral areas A class office space is transacted between EUR 9 and EUR 12. Office stock in Bucharest outgrows demand Bucharest gets four new office buildings Irina Popescu, irina.popescu@romania-insider.com