The total demand for modern office spaces rented in Bucharest decreased by 25% in the third quarter of this year compared to the same period in 2023, reaching 236,000 square meters, while the demand for new leasing contracts dropped by 11%, according to a specialized analysis conducted by Colliers.
At the same time the medium-term prospects remain positive amid companies’ efforts to bring employees to the office more often, according to the Colliers analysis. Also, real estate consultants note that, in certain areas of Bucharest, signs of transition towards a more favorable market for owners are maintained.
“The year 2024 marks three consecutive quarters with no completions of new modern office projects, the longest period without deliveries since 2005. Considering that the only project that will be delivered with certainty in the next two years is the AFI Loft, with more than 16,000 square meters, scheduled for completion at the end of this year, Colliers consultants expect the market to balance out considerably. However, although there are signs of a transition towards an owner’s market in certain areas of Bucharest, the general vacancy rate remains at approximately 15% at the level of the entire city”, the research states.
Besides, the market is dominated by tenants, who occupy areas between 1,000 and 2,000 square meters. “In the last two years, following a trend that we also see in other Central and Eastern European countries, such as Poland, renewals represented a larger part of the demand than usual, up to around 50% from lease transactions signed in Bucharest, as many companies have postponed decisions on office leases due to uncertainty related to hybrid work. For comparison, in the years before the pandemic, the share of renewals was, on average, 28% per year, falling to 19% in 2011 and 22% in 2019″, the real estate specialists argue.
Overall, in the third quarter of this year, compared to the similar period in 2023, the total demand for modern office spaces rented in Bucharest decreased by 25%, to 236,000 square meters, and the demand for new leases decreased by 11%, to 82,000 square meters.