The Total Leasing Activity (TLA) for the office sector in Q4 2016 reached 144,000 sq m, the highest level on a quarter for the Romanian real estate industry, while 79 percent of TLA was represented by take-up (total transactions excluding renewals/ renegotiations), according to the latest CBRE Romania Office Market report, a press release informs.
TLA in 2016 totals 412,000 sq m, also a highest level for the industry, while the total volume of renewal/renegotiation transactions was over 120,000 sq m.
Expansion and new lease (new demand) amount to over 50,000 sq m, meaning 35 percent of the TLA. This new demand results from 5,000 new jobs created in the Bucharest market.
CBRE report points also that in Q4 of 2016 were delivered 4 buildings totalling 80,000 sq m. The first building of Metroffice (GLA of 20,500 sq m), the second building of Oregon Park (GLA of 24,619 sq m) and the third building of Hermes Business Campus (GLA of 29,100 sq m).. Additionally to these established business parks, a boutique building located in CBD was delivered – Prezan Office Building with a GLA of 5,500 sq m.
According to CBRE Office Market report, the current office stock increased to 2.64 million sq m in the last quarter, while class A office buildings represent 44 percent of the modern office stock. CBRE estimates that at the end of 2018 the share of class A office stock will outperform the class B office stock.
For the next two years, CBRE report estimates another 592,000 sq m to be delivered in Bucharest office market; the West sub-market has a share of 40 percent (Campus 6, Orhideea Towers, The Bridge, Business Garden Bucharest), followed by Pipera and North sub-markets with a total share of 37 percent of the new supply and Central sub-market with 15 percent of the new supply. Timpuri Noi Square (developed by Vastint Group) is one of the largest projects located in Central sub-market.
“We expect that this year the new demand would be similar to 2016 and our team of 160 people, with 9 offices in 7 major cities, to close new spectacular deals, bring new companies in Romania and help creating new jobs on Romanian labour force market”, says Razvan Iorgu, Managing Director, CBRE Romania.
CBRE Romania had in 2016 the highest market share in Bucharest office market, reaching 47 percent market share on landlord representation, 34 percent on tenant representation and 38 percent market share from the total transactions closed by real estate consultants companies in Bucharest.
During 2016, various big occupiers signed renewal contracts in their already established office locations – Telekom in City Gate and Riverplace, Teamnet in Green Gate, Oracle in Sky Tower, IBM in Global Business Center, BRD Societe Generale in West Gate Park, Adobe in Anchor Plaza.