The rate of decline in office demand slowed in the second quarter

IT&C and computer companies were the most active on the office space rental market in Bucharest, generating over 40% of demand in the first half of this year, followed by the banking and financial sector, with 25% of the area contracted and by medical and pharmaceutical companies, with about 9% of total take-up.

In the first half of the year, the office space rented in Bucharest totalled approximately 100,000 square meters, of which IT&C and computer companies contracted about 40,000 square meters, banking and finance – 28,000 square meters, and pharma companies rented over 8,500 square meters.

Thus, after almost 50% reduction in Q1 2020 compared to Q4 2019, the decline in office demand in Bucharest continued during Q2, albeit at much lower rate of 19% when compared to the previous quarter.

Total gross transaction volume reached approx. 44,500 m² in Q2 and almost 100,000 m² in H1 2020.

Compared to the first half of last year, demand fell by half due to the COVID-19 crisis. The average transaction size in Q2 2020 was approx. 1,400 m².

Net take up accounted for 16,000 m², or 36% of gross take up during the period. Compared with net take up in Q1 2019, it stood at little over 33%.

JLL was the market leader in Bucharest, with over 36% market share in the first half of the year in terms of transactions intermediated.

In terms of vacancy rate, Q2 experienced a slight increase, from 8.7% in Q1, to approximately 9.3%.

Vacancy rate in the different sub-markets in Bucharest

Sub-marketStock (m²)Average rent (Euro/m²/mth)Vacancy %
1. CBD320,40016 – 18.54.7
2. Center342,00015 – 176.5
3. Dimitrie Pompeiu440,70012 – 148.8
4. Floreasca – BV520,20015 – 164.8
 5. Center – West439,70014 – 1613.3
6. East51,10012 – 1418.1
7. South41,80010 – 120
8. West157,90010 – 130
9. North – West (Expozitiei)222,80015 – 176.5
10. Baneasa – Otopeni159,80015 – 178.2
11. Pipera North210,50011 – 1335.9
TOTAL2,906,9009.3
Source: Bucharest City Report Q2 2020

About 214,000 square meters of offices will be delivered in 2020 in Bucharest, so that the modern stock will exceed 3 million square meters

After strong deliveries of 78,200 m² during Q1 2020, the pace slowed down in Q2 and the office buildings completed during the period added 27,900 m² to the modern office stock in Bucharest.

The projects delivered in Q2 include The Bridge phase 3 in the Center-West sub-market with approx. 21,200 m² GLA, and the Zone 313 in the Floreasca-Barbu Vacarescu sub-market, adding 6,700 m² GLA.

Deliveries in Q2 2020 represent approximately 33% of the volume recorded in Q2 2019, when 85,500 m² were added to the market.

Several important deliveries are waited for the second half of 2020, totaling 108,000 m². Thus this year the modern stock would increase by 214,000 m², exceeding the milestone of 3 million m² in Bucharest.

Among these the largest are Globalworth Square with 25,700 m², and One Tower, adding 23,600 m², both situated in the Floreasca – Barbu Vacarescu sub-market, as well as the second and third buildings in Campus 6, adding another 36,900 m² to the Center – West sub-market.

Pipeline for 2020 (selection)

PropertySubmarketSize (m²)Developer
Globalworth SquareFloreasca – Barbu Vacarescu25,700Globalworth
One TowerFloreasca-Barbu Vacarescu23,600One United Properties
Campus 6.2 & 6.3Center-West36,900Skanska
Matei MilloCenter9,700Forte Partners
Politehnica Business TowerCenter-West8,000Politehnica Business Tower
Mincu OfficesCenter4,200Private local
Source: JLL Bucharest City Report Q2

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