Developers to deliver almost 500,000 sqm of modern offices in Bucharest and the regional cities in the upcoming 16 months

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 The office market in Bucharest and in the major regional cities – Cluj-Napoca, Timișoara, Iași and Brașov – continues to develop, with local and foreign investors having projects under construction or scheduled for delivery with an area of approximately 500,000 square meters that will be put into use in the next 16 months, according to Bucharest Office Market and Office Regional Cities Reports, conducted by the real estate consulting company Cushman & Wakefield Echinox.

The most active market remains Bucharest, with projects of about 340,000 square meters scheduled for delivery by the end of 2021, followed by Timişoara (80,000 square meters), Cluj-Napoca (36,000 square meters) and Braşov (25,000 square meters).

The most active developers in terms of surfaces scheduled to be delivered in the next period are One United (94,000 sqm), Iulius Group (60,000 sqm), Portland Trust (45,000 sqm) and Forte Partners (41,000 sqm).

At the end of the first semester, the modern office stock in Bucharest was about 2.9 million square meters leasable area, without taking into account the buildings occupied directly by the owners, while the stock in regional cities was approaching the 1 million square meters threshold, the largest markets being Cluj-Napoca (347,000 sqm), Timişoara (245,000 sqm) and Iaşi (226,000 sqm).

The medical crisis caused by the Covid-19 pandemic significantly influenced the use of office spaces, with companies adopting various methods to protect their employees, but it had a lower impact on the space occupancy, as most companies are still analyzing the best medium and long term solutions to carry on their activity. Thus, the vacancy rate varies from 10.3% in Bucharest, with values of 4.7% in Floreasca – Barbu Văcărescu and 7.4% in CBD, to 5.6% in Cluj-Napoca or 5.7% in Braşov.

Mădălina Cojocaru, Partner, Office Agency, Cushman & Wakefield Echinox: “The need for modern, qualitative constructions in attractive locations will not disappear given the Covid-19 pandemic, whether we talk about office, residential or commercial spaces. The developers, banks and investors understand that is all about the rethinking of how office spaces will be used, not the lack of need for such spaces, which is why the activity on all large construction sites has continued at a steady pace, both in Bucharest and in the country. A sign of confidence in the potential of the local office market is also given by the fact that developers such as Speedwell or Iulius Group started building new projects during this period, in Bucharest and Timişoara, and in Iasi respectively, while banks continue to finance this sector, and the transaction market has remained active.”

The prime headline rents remained stable, at a level of 19 euro / sqm / month in Bucharest and 15 euro / sqm / month in Cluj-Napoca or Timişoara, after a long period in which the competition between developers kept the local market rents at a competitive level compared to similar cities in Central and Eastern Europe.

The most important office projects to be delivered in regional cities (S2 2020 – 2021)

City Project GLA (sq m) Developer Delivery
Timişoara UBC 0 55,000 Iulius Group 2021
Timişoara ISHO III 17,000 Mulberry Development 2021
Timişoara Romcapital Center II 8,500 Altus 2020/2021
Cluj-Napoca Banca Transilvania HQ 16,000 Banca Transilvania 2021
Cluj-Napoca Record Park 11,500 Speedwell 2020
Cluj-Napoca Cluj BC (phase III) 8,700 Felinvest 2020
Braşov AFI Park Brasov I 15,000 AFI Europe 2020
Braşov Coresi Business Campus U1 10,500 Ceetrus – Ascenta 2021
Iaşi United Business Center 8 5,100 Iulius Group 2020
TOTAL 147,300

Source: Cushman & Wakefield Echinox

 

The most important office projects to be delivered in Bucharest (S2 2020 – 2021)

Area Project GLA (sq m) Developer Delivery
Central – West One Cotroceni Park I 45,000 One United 2021
Central – West Campus 6 II & III 41,000 Skanska 2020
Central – West Sema Londra & Oslo 31,500 River Development 2021
Floreasca – Barbu Văcărescu Globalworth Square 28,000 Globalworth 2020
Floreasca – Barbu Văcărescu One Tower 24,000 One United 2020
Floreasca – Barbu Văcărescu One Verdi Park 24,800 One United 2021
Nord – West (Expoziţiei) J8 Office Park 45,000 Portland Trust 2021
Central U-Center 32,000 Forte Partners 2021
Central Matei Millo Offices 9,100 Forte Partners 2021
CBD Ţiriac Tower 16,500 Ţiriac Imobiliare 2021
CBD Dacia One 15,800 Atenor Group 2021
TOTAL 312.700

Source: Cushman & Wakefield Echinox

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