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April 23, 2021

Cushman & Wakefield Echinox: Developers will deliver in the next 16 months almost 500,000 square meters of modern offices in Bucharest and the regional cities

The office market in Bucharest and in the major regional cities – Cluj-Napoca, Timișoara, Iași and Brașov – continues to develop, with local and foreign investors having projects under construction or scheduled for delivery with an area of approximately 500,000 square meters that will be put into use in the next 16 months, according to Bucharest Office Market and Office Regional Cities Reports, realised by the real estate consulting company Cushman & Wakefield Echinox.

The most active market remains Bucharest, with projects of about 340,000 square meters scheduled for delivery by the end of 2021, followed by Timişoara (80,000 square meters), Cluj-Napoca (36,000 square meters) and Braşov (25,000 square meters).

The most active developers in terms of surfaces scheduled to be delivered in the next period are One United (94,000 sqm), Iulius Group (60,000 sqm), Portland Trust (45,000 sqm) and Forte Partners (41,000 sqm).

At the end of the first semester, the modern office stock in Bucharest was about 2.9 million square meters leasable area, without taking into account the buildings occupied directly by the owners, while the stock in regional cities was approaching the 1 million square meters threshold, the largest markets being Cluj-Napoca (347,000 sqm), Timişoara (245,000 sqm) and Iaşi (226,000 sqm).

The medical crisis caused by the Covid-19 pandemic significantly influenced the use of office spaces, with companies adopting various methods to protect their employees, but it had a lower impact on the space occupancy, as most companies are still analyzing the best medium and long term solutions to carry on their activity. Thus, the vacancy rate varies from 10.3% in Bucharest, with values of 4.7% in Floreasca – Barbu Văcărescu and 7.4% in CBD, to 5.6% in Cluj-Napoca or 5.7% in Braşov.

Mădălina Cojocaru, Partner, Office Agency, Cushman & Wakefield Echinox: “The need for modern, qualitative constructions in attractive locations will not disappear given the Covid-19 pandemic, whether we talk about office, residential or commercial spaces. The developers, banks and investors understand that is all about the rethinking of how office spaces will be used, not the lack of need for such spaces, which is why the activity on all large construction sites has continued at a steady pace, both in Bucharest and in the country. A sign of confidence in the potential of the local office market is also given by the fact that developers such as Speedwell or Iulius Group started building new projects during this period, in Bucharest and Timişoara, and in Iasi respectively, while banks continue to finance this sector, and the transaction market has remained active.”

The prime headline rents remained stable, at a level of 19 euro / sqm / month in Bucharest and 15 euro / sqm / month in Cluj-Napoca or Timişoara, after a long period in which the competition between developers kept the local market rents at a competitive level compared to similar cities in Central and Eastern Europe.

The most important office projects to be delivered in regional cities (S2 2020 – 2021)

CityProjectGLA (sq m)DeveloperDelivery
TimişoaraUBC 055,000Iulius Group2021
TimişoaraISHO III17,000Mulberry Development2021
TimişoaraRomcapital Center II8,500Altus2020/2021
Cluj-NapocaBanca Transilvania HQ16,000Banca Transilvania2021
Cluj-NapocaRecord Park11,500Speedwell2020
Cluj-NapocaCluj BC (phase III)8,700Felinvest2020
BraşovAFI Park Brasov I15,000AFI Europe2020
BraşovCoresi Business Campus U110,500Ceetrus – Ascenta2021
IaşiUnited Business Center 85,100Iulius Group2020

Source: Cushman & Wakefield Echinox

The most important office projects to be delivered in Bucharest (S2 2020 – 2021)

AreaProjectGLA (sq m)DeveloperDelivery
Central – WestOne Cotroceni Park I45,000One United2021
Central – WestCampus 6 II & III41,000Skanska2020
Central – WestSema Londra & Oslo31,500River Development2021
Floreasca – Barbu VăcărescuGlobalworth Square28,000Globalworth2020
Floreasca – Barbu VăcărescuOne Tower24,000One United2020
Floreasca – Barbu VăcărescuOne Verdi Park24,800One United2021
Nord – West (Expoziţiei)J8 Office Park45,000Portland Trust2021
CentralU-Center32,000Forte Partners2021
CentralMatei Millo Offices9,100Forte Partners2021
CBDŢiriac Tower16,500Ţiriac Imobiliare2021
CBDDacia One15,800Atenor Group2021

Source: Cushman & Wakefield Echinox

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