Financial and IT sectors drive office demand in Bucharest

Financial companies were the most active in the Bucharest office lease market during 2021, according to a report by real estate consultancy Cushman & Wakefield Echinox. In addition to the financial sector, office demand also came from healthcare operators, as well as technology and retail companies.

The highest average office lease transactions of 2,000 sqm were concluded by financial companies, while IT companies leased 1,100 sqm on average.

Mădălina Cojocaru, partner office agency Cushman & Wakefield Echinox, says new demand for office space has come from firms expanding and hiring staff. “Thus, the share of new demand in total leasing activity has increased to almost 60 percent, and given the discussions, we are having with our clients, there is every chance that this percentage will continue to increase. However, it should be stressed that in the next 12-24 months we may have difficulties in accommodating this demand given the low volume of projects with delivery expected in 2022 and 2023,” Cojocaru said.

The top leasing transactions closed last year included Medicover with 15,000 sqm, Wipro with 11,000 sqm, Provita with 11,000 sqm and Allianz Țiriac with 4,700 sqm.

Office deliveries totalled 244,300 sqm last year, up 54 percent in 2020. More than half of the space was in the centre-west area of Bucharest.

In terms of future supply, projects totalling around 224,000 sqm are currently under construction and expected to be delivered in 2022 and 2023, down 44 percent versus the volumes completed in 2020-2021.

At the end of 2021, the stock of modern office space reached 3.19 million sqm, while the vacancy rate increased slightly to 14.9 percent.

The benchmark rent in Bucharest remained stable in Q4 2021 at €18-18.5/sqm/month in the CBD, with values of €17-18/sqm/month recorded in the Centre and Floreasca – Barbu Văcărescu areas.