The office stock in the major regional cities – Cluj-Napoca, Timisoara, Iasi and Brasov – has doubled over the past five years and will continue to grow at an accelerated pace, being expected to exceed the 1 million sq m threshold in 2019, according to the Cushman & Wakefield Echinox Office Market Regional Cities study.
At the end of H1 2018, the Class A and B office stock in the four cities reached 780,000 sq m, up 12% (equivalent to 87,000 square meters) compared to the same period last year. The largest regional market is Cluj-Napoca, with a stock of 282,000 square meters, while the second place is occupied by Timisoara with a stock of 213,000 sq m, where new spaces with an area of nearly 70,000 square meters have been delivered during the past 12 months. The modern office stock in Iasi remained stable at about 180,000 square meters, while the corresponding figure for Brasov is of 103,000 square meters.
2018 appears to be the most prolific year for the office markets in these cities, with total deliveries estimated at around 122,000 square meters. The pace of development is expected to accelerate in 2019, when new projects with a cumulated area of about 190,000 square meters are announced for delivery, therefore exceeding the 1 million sq m threshold. In comparison, we estimate that Bucharest’s office stock will reach 3 million square meters at the end of 2019.
“We notice that the office market in the major regional centers continues to grow, being boosted by the energy and skills of over 180,000 students in these cities. While analyzing the major projects, the tone was set by Timisoara, with the City Business Center project, followed by the United Business Center project in Iasi and The Office in Cluj-Napoca. In the past year, Timisoara has returned to the forefront through projects such as Openville, ISHO and Vox Technology Park, while in Brasov the Coresi project continues to expand, with AFI Park Brasov being expected to be delivered in 2019. With unemployment rates ranging from 0.9% in Timis and 3.6% in Iasi, the biggest challenge for developers and office occupiers is the recruitment and retention of talents, therefore the accessibility, proximity to centers of interest (faculties, restaurants, entertainment areas, etc.) and technical facilities will differentiate between projects,” said Madalina Cojocaru, Partner, Office Agency, Cushman & Wakefield Echinox.
As a matter of fact, about a quarter of the existing office stock in these cities is positioned in the immediate vicinity of the dominant shopping centers, so employees have access to a wide range of lunch options, but also to shops, services and leisure activities after the end of the working hours.
Rents for class A office buildings vary between 11-13 euro / sq m / month in Brașov and reach 13.5 – 15 euro / sq m / month in Cluj-Napoca, while the service charges vary between 2 – 3.5 euro / sq m / month, depending on the specificity of each building.