Bucharest is second in Europe, behind Istanbul, when it comes to the growth rate of the office space inventory in the 2014-2016 period when the delivery of over 420,000 square meters, or 20 per cent of existing inventory, is scheduled, a Cushman & Wakefield report shows.
The real-estate consultants have placed Bucharest on second place also from the point of view of the absorption rate of the office space inventory, also behind Istanbul. Thus, according to Cushman & Wakefield, in Romania approximately 20 per cent of the office space inventory estimated at 2.1 million square meters will be rented each year in the 2014-2016 period.
“Great Britain, Poland and Romania are the shining stars in what concerns GDP growth. (…) In Bucharest market conditions continue to improve and now the recovery has a safer basis. Likewise, a better business sentiment is more obvious and renters have reactivated their plans concerning the real-estate component, albeit selectively. Even a rise in rents is possible in 2016, in parallel with a drop in the office buildings vacancy rates,” the authors of the report point out.
Cushman & Wakefield estimate that office space projects totaling 146,243 square meters will be delivered in Bucharest this year, 125,000 square meters in 2015 and 150,000 square meters in 2016. Thus, based on the share in total inventory of new office space that will be delivered from 2014 to 2016, Bucharest is second in Europe, behind Istanbul.
In Istanbul 1.2 million square meters will be delivered this year, 448,000 square meters in 2015 and 472,000 square meters in 2015.
Bucharest also has some of the lowest vacancy rates in Central and Eastern Europe, with a level of 12.6 per cent in 2014, 11.5 per cent in 2015 and 10.6 per cent in 2016. Only Bratislava has a lower vacancy rate, namely 11.9 per cent in 2014, 11.6 per cent in 2015 and 10.9 per cent in 2016.
Prague (465,000 square meters), Warsaw (670,000 square meters) and Moscow (2.1 million square meters) complete the top 5 European markets based on the growth rate of the office space inventory during the period analyzed. Although the surface of the projects that will be finalized in these three capitals is superior to the one of the projects in Bucharest, its share in the total inventory is inferior, bearing in mind that these markets have a much larger inventory than Bucharest.
In Prague the vacancy rate is at 16.5 per cent this year and it will climb to 16.9 per cent in 2015 and will then drop to 16.2 per cent in 2016. In Warsaw the same rate stands at 14.3 per cent, the percentage set to grow to 15.1 per cent next year and to drop to 12.7 per cent in 2016.