There will be a high number of relocations in the local office market in 2016, mainly due to the legislative changes and major consolidation of some multinationals headquarters, according to Alexandru Petrescu, Managing Partner ESOP Consulting l CORFAC International.
This trend will lead to a 20-25 percent increase in the office rental market compared to 2015, Petrescu estimates. 2016 might also be the first year when the number of low-quality office spaces in Bucharest will start to drop. Thus, in the next 3-4 years, there will be fewer firms carrying out their activity in communist flats, in areas with high seismic risk, or in buildings without fire safety permits.
“2016 will bring together multiple factors with great influence on the office market, there will be a migration in all the segments of the office market in Bucharest, amid the office supply increase: the large tenants will consolidate their headquarters in the newest and best-positioned office building in the center-north and center-west areas,” Alexandru Petrescu said.
On the other hand, the medium-sized companies will take the central buildings, which have a smaller size and have been built in the last 10 years, as they seek to expand or are looking to improve their visibility. They will rent office spaces between 500 sqm and 2,000 sqm.
“In parallel, there will be some pressure on the tenants operating in flats or villas, due to the higher property taxes for these types of properties, which might lead to higher rents, as well as due to the harsher regulations on seismic and fire risks. For the first time, companies with less than 50 employees will have more modern office solutions to choose from, such as instant offices, business hubs, and more offices in small or medium sized centres, which will remain vacant and will offer spaces at more accessible rents than in previous years,” Petrescu added. At least three major pre-rentals are to take place in 2016, as two big players from the banking sector and one active in the IT&C area want to consolidate their offices and seek solutions for spaces of over 15,000 sqm.
“In the next 2-3 years, the offices in arranged in flats located in Unirii and Victoriei areas will lose the attractiveness they’ve had in the past in the office market, and they might return to residential use, for rental or sale,” according to Alexandru Petrescu.
ESOP is one of the main real estate consultants in the local market, being active for more than 15 years in the office and residential segments.