Vacancy rate in Bucharest office market at 7-year high
The vacancy rate in the Bucharest office market has climbed to a 7-year high of 15.75% at the end of H1, up from 11.25% a year ago (and 10% mid-2019), according to a Colliers report.
The market is in a bit of a difficult spot, but the damage has not been even. Newer/more qualitative buildings tend to perform much better in terms of overall occupancy, thanks to their appeal as well as rock-solid tenant companies, quite a lot of which continue to expand.
The average net effective rent for Bucharest is probably some 10% lower than before the pandemic; this is mostly due to older and less qualitative buildings, which had to offer more incentives to attract or retain tenants than newer buildings.
The sublease stock (of at least 80,000 sqm by Colliers measurements, likely an underestimated figure), which offer good fitted-out alternatives for very attractive rents, pressure, even more, the less competitive office spaces.
Under these conditions, the contracted area in the first half of this year marks a slight decrease compared to the first half of 2020 when they were signed for 45,000 sqm.