Bucharest office market: Over 30 percent of the demand came from the companies that moved from old buildings in modern projects
Companies have rented in the first quarter almost 70,000 sqm of office space in Bucharest, one third of the demand came from companies that formerly had its headquarters in old, small buildings or in other spaces than modern buildings (noncompetitive stock), according to recent findings from JLL.
This segment of demand increased compared with last year, when accounted for only 7 percent of the total take-up. On average, each company that moved its offices for the first time into a modern office building contracted 2,200 sqm, more than the average of the total demand, of 1,166 sqm.
“The growing interest of these companies in modern office space can be explained by the fact that either the spaces they occupied previously no longer respond to theirs requirements, or because most of them expanded their business and needed more spaces. In addition, there are cases when companies consolidate their activities from several small buildings into one modern project. In addition, as we observe more and more companies having difficulty finding and retaining employees, and the work environment becoming an important tool in recruiting employees,” commented Mădălina Marinescu, consultant, Office Department, JLL Romania.
The areas in Bucharest targeted by companies that moved their headquarters into modern office buildings were Center, with more than half of the demand and West, with 30 percent of the total.
IT & communications companies continued to be the most active tenants with more than 60 percent of demand in Bucharest, followed by energy companies which cumulated over a quarter of total take-up.
More than 60 percent of the total take-up represented new demand (new contracts, extensions of the existing offices and pre-lettings), which can accommodate at least 4100 employees.
On supply side, only one building was delivered in the first quarter, Globalworth Campus Building 2, with an area of 28,000 sqm. For the whole year, developers plans to deliver around 230,000 sqm new office spaces, compared to 140,000 sqm completed in 2017.
Almost 80 percent of the demand outside Bucharest targeted Timisoara and Cluj-Napoca. The demand for offices outside Bucharest, meaning Timisoara, Braşov, Craiova, Iaşi and Cluj-Napoca totaled 17,000 sqm in the first quarter. Nearly half of the demand outside Bucharest was recorded in Timisoara (8239 sqm), while 30 percent of the rented spaces (5100 sqm) targeted Cluj-Napoca.
IT, BPO and professional services companies were the most active tenants, with nearly 60 percent of the total take-up.
“We estimate that the modern office stock in Brasov, Timisoara, Iaşi and Cluj-Napoca will increase by almost 25 percent this year, to about 865,000 sqm. In Timisoara, developers announced projects of 83,000 sqm, in Cluj-Napoca, the stock will grow by 43,000 sqm, in Brasov will be delivered 25,000 sqm, and in Iasi only 9,200 sqm will be completed in 2018” said Mădălina Marinescu.