Vacancy rate on the Bucharest office market – at its lowest level in the past 9 years

The vacancy rate on Bucharest Office market reported one of its lowest levels, 9,5 per cent, according to the latest CBRE report. The vacancy for A class office is 7,1% while for B class office buildings, the vacancy is at 11,4 per cent. West and North sub-markets have the lowest vacancy rates – 4.6 per cent and 6,6 per cent respectively.

“This low level of vacancy is a consequence of limited deliveries during the first three months of the year, coupled with a maintained healthy demand which continued from last year into this year’s first quarter”, says Mihai Paduroiu, Head of Advisory & Transaction Services, Office CBRE Romania.

CBRE report also shows that 54 per cent of the TLA signed during the first three months was represented by take-up (total transactions excluding renewal/renegotiation). At the end of the first quarter of 2017 the Total Leasing Activity (TLA) amounted to 94,000 sqm, representing 23 per cent of the TLA concluded during the last year. Another 14,000 sqm will be delivered by the end of this year, according to CBRE forecasts.

The highest demand levels were recorded in North and Pipera sub-markets, more than 69,000 sqm, while 64 per cent from total take up was for A class office building.

Two office boutique buildings were delivered during Q1 2017, totalling 11,600 sqm.

CBRE was the consultant for the largest Office deals closed in the first quarter of 2017, of 20,000 and 10,000 sqm, respectively. CBRE is also market leader on tenant representation, with 59 per cent market share (38,500 sqm transacted) and landlord representation, with 22 per cent market share (7,500 sqm transacted).

By the end of Q1 2017, 26% of the TLA was generated by new lease (new demand) and expansion transactions. CBRE report indicates that West will be the most active zone in 2017 and 2018, with 54% of the new supply.

The largest projects announced for this year are The Bridge (first building) located in West sub-market and developed by Forte Partners and Timpuri Noi Square (first two buildings) located in Central sub-market and developed by Vastint Romania. Two more projects will be delivered in Centre Bucharest by the end of 2018 – Day Tower and Unirii View.

At the end of Q1 2017 the prime headline rent remains stable at 18.5 €/sqm/month. At the end of Q1 2017, the modern office stock reached 2.65 million sqm, A class offices representing 44 per cent of total modern stock. Almost 300,000 sqm office spaces, distributed in all sub-markets will be delivered next year so, by the end of 2018, the total modern stock will reach 3,09 million sqm.