Bucharest office market: At least 130 new jobs created by each new lease signed
Each new office leasing contract signed in Bucharest last year created at least 130 new jobs. Dimitrie Pompeiu and South sub-markets made the top, with more than 200 new jobs per transaction, according to the latest JLL market report.
As a result, office net take-up in Bucharest (expansions and new leases) reached 171,000 sqm, a 10 percent increase when compared with 2016. The average leased office area was of ca.1,300 sqm, resulting in an equivalent of 130 new jobs created for each company. New demand accounted for 48 percent of the total take-up registered last year whose value reached 350,000 sqm.
The average office area leased by companies varies depending on the sub-market in which the lease is signed. This reflects how the market is polarized in terms of the tenants' profile.
According to our report, Dimitrie Pompeiu sub-market registered the largest average leased office area. Here, a number of 13 companies provided new demand of office spaces of more than 2,500 sqm, which means at least 250 new employees accommodated for each transaction.
In the South part of Bucharest, 7 companies leased an average of approximately 2,100 sqm of office space and thus created in the area at least 200 new jobs each.
The evolution of CBD transactions came as a surprise of the market. Here, the average leased area of 1,634 sqm equals more than double of the value of 2016. In this sub-market 17 contracts were signed, representing 16 percent of the net take- up. Considering that companies allocate on average 10 sqm of office space per employee in the CBD area, each leasing contract signed created 160 new jobs . Traditionally, in this particular sub-market, the average leased office area used to be a lot smaller as a consequence of the low vacancy rate. However, in the last 18 months the delivery of two important projects contributed to the conclusion of larger transactions than usual.
In Floreasca-Barbu Vacarescu area, the average leased office area was of 1,464 sqm. The sub-market made the top in terms of number of transactions, respectively 28, totalling an area of 41,000 sqm leased. The area remained the most attractive also in 2017, with almost 25 percent of the net take-up and 4,100 employees (considering that each contract signed would generate 150 new jobs).
The Center-West and West sub-markets registered transactions of more than 1,200 sqm each, cumulating 11 percent, respectively 4 percent of the new demand.
With 15 transactions and an average of 1,296 sqm leased, the Center-West area, the new hub of office developments will register an increase of 2,000 employees, 130 for each new contract concluded here.
In the other sub-markets, the average leased office area was below 1,000 sqm, with the lowest level registered in the North part of the Bucharest, of 427 sqm.
”As compared with 2016, last year registered an increase in both the average area leased by companies and the number of new leasing contracts. Consequently, the new demand exceeded the 2016 level, and, most important, it was above the new supply delivered last year, of 140,000 sqm. When looking at sub-markets, we do not see any significant change in the average leased area as compared to the previous year, but given the projects to be delivered in 2018-2019, we may see changes in the preferences of companies in terms of location,” commented Marius Șcuta, National Director Head of Office Department and Tenant Representation JLL Romania.