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August 18, 2022
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Cushman & Wakefield Echinox: The Center-West sub-market is set to become the main office hub in Bucharest, overtaking Floreasca-Barbu Văcărescu after 8 years

The office stock in the Center-West area of Bucharest, near Politehnica University, will surpass the existing stock from Floreasca-Barbu Văcarescu (which has been the main office hub in Bucharest for eight years) in 2022, , according to data from the Cushman & Wakefield Echinox real estate consultancy company.

The modern office stock in the Center -West sub-market, has reached 523,000 square meters at the end of last year, and it is expected to increase to 614,000 square meters by the end of 2022. As a result, this sub-market will have a share of 18% of the total office stock in Bucharest.

In regards to Floreasca-Barbu Văcărescu, the existing projects accounted for 569,700 square meters at the end of 2021, with no new deliveries being planned for 2022. Therefore the stock in this area will be lower compared with Center-West’s at the end of this year, representing 16% of the total office stock in the Capital city.

According to the Bucharest Office Market report, only 3 out of the Bucharest’s 11 office sub-markets will benefit from new projects this year, namely Center-West, Center and Expoziției, the new supply amounting to 136,800 square meters.

 

Area Stock 2021

(sqm)

Deliveries 2021 (sqm) Estimated Deliveries 2022 (sqm) Estimated stock 2022 (sqm)
Center-West 523,100 65,800 91,500 614,600
Floreasca-Barbu Văcărescu 569,700 28,400 0 569,700
Dimitrie Pompeiu 440,700 0 0 440,700
Center 384,500 41,700 24,300 408,800
CBD 360,500 31,500 0 360,500
Expozitiei 268,800 46.000 21,000 289,800
Pipera North 210,500 0 0 210,500
North 182,700 22,900 0 182,700
West 165,900 8,000 0 165,900
East 51,100 0 0 51,100
South 41,800 0 0 41,800
Total 3,199,300 244,300 136,800 3,336,100

 

Eduard Turcoman, Director Office Agency Cushman & Wakefield Echinox: “The evolution is mainly influenced by the lack of land plots suitable for office projects in the Floreasca-Barbu Văcărescu area, an area responsible for more than a third of the new supply in Bucharest between 2013 and 2021. Demand remains strong for this sub-market, taking into account the volume of transactions registered during the last few years and also the vacancy rate which is below the market average. For the coming period, there are strong premises for a reduction of the average vacancy rate in Bucharest, given the difficulties related to authorization process, in the context of the blocked local PUZ, which will generate a reduction of the new office projects supply, in a market where the annual demand still remains at around 300,000 square meters.”

In regards to the vacancy rate, there is a wide gap pertaining to the 11 analyzed sub-markets from the Cushman & Wakefield Echinox report, with the highest levels being recorded in Pipera North and East, and the lowest in the West, Dimitrie Pompeiu and Center sub-markets.

Vacancy rates above the market average are also recorded in North and South. We notice a higher vacancy rate in buildings which have been completed more than 10 years ago and also in properties without direct access to the metro. Considering that the new projects bring the highest innovative technologies, materials and building solutions to the market, they are constantly preferred by tenants over older buildings, thus generating large unoccupied areas.

Cushman & Wakefield Echinox is one of the largest real estate consulting companies in the local market, operating on all the real estate market segments. The company’s office department is active in Bucharest, but also in the largest cities in the country, such as Cluj-Napoca, Timisoara, Iasi or Brasov.

 

 

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