High demand for modern projects on the Bucharest office market in Q1 2018
Companies have rented in the first quarter almost 70,000 square meters of office space in Bucharest, one third of the demand came from companies that formerly had its headquarters in old, small buildings or in other different from modern buildings
Companies have rented in the first quarter almost 70,000 square meters of office space in Bucharest, one third of the demand came from companies that formerly had its headquarters in old, small buildings or in other different from modern buildings (noncompetitive stock).
This segment of demand increased compared to last year, when accounted for only 7% of the total take-up.
On average, each company that moved its office for the first time into a modern office building contracted 2,200 square meters, more than the average of the total demand, of 1,166 square meters.
"The growing interest of these companies in modern office space can be explained by the fact that either the spaces they occupied previously no longer respond to their requirements, or because most of them expanded their business and needed more space. In addition, there are cases when companies consolidate their activities from several small buildings into one modern project. In addition, as we observe, more and more companies are having difficulty finding and retaining employees, and the work environment has become an important tool in recruiting employees", comments Mădălina Marinescu, consultant Office Department JLL Romania.
The areas in Bucharest targeted by companies that moved their headquarters into modern office buildings were Center, with more than half of the demand and West, with 30% of the total.
IT & communications companies continued to be the most active tenants with more than 60% of demand in Bucharest, followed by energy companies which cumulated over a quarter of total take-up.
More than 60% of the total take-up represented new demand (new contracts, extensions of the existing offices and pre-lettings), which can accommodate at least 4,100 employees.
On supply side, only one building was delivered in the first quarter, Globalworth Campus Building 2, with an area of 28,000 square meters.
For the whole year, developers plan to deliver about 230,000 square meters of new office space, compared to 140,000 square meters completed in 2017.
Almost 80% of the demand outside Bucharest targeted Timisoara and Cluj-Napoca
The demand for offices outside Bucharest - Timisoara, Braşov, Craiova, Iaşi and Cluj-Napoca totaled 17,000 square meters in the first quarter. Nearly half of the demand outside Bucharest was recorded in Timisoara (8,239 square meters), while 30% of the rented spaces (5,100 square meters) targeted Cluj-Napoca.
IT, BPO and professional services companies were the most active tenants, with nearly 60% of the total take-up.
We estimate that the modern office stock in Braşov, Timişoara, Iaşi and Cluj-Napoca will increase by almost 25% this year, to about 865,000 square meters. In Timisoara, developers announced projects of 83,000 square meters, in Cluj-Napoca, the stock will grow by 43,000 square meters, in Brasov will be delivered 25,000 square meters, and in Iasi only 9,200 square meters will be completed in 2018.