The office sector will continue to be the top performer in Romania this year, with 300,000 sq m of new supply estimated for delivery in Bucharest of which much is already pre-leased, CBRE announced during CEDER Romania.
The positive signs are already there: three of the main indicators, “total leasing activity, new supply and take-up point to a very strong, maybe even a record year”, said Mihai Paduroiu, CBRE Head of Advisory and Transaction Services. Comparing the 2018 office market with the Q1 of 2019, CBRE found that in terms of new supply, the difference is significant: 93,000 sq m has been delivered in the first quarter of this year alone, versus 144,000 sq m for the whole of last year. “If we are looking at take-up, we had 87,000 sq m during Q1 of 2019 versus 238,900 sq m last year,” Paduroiu added. While the pre-lease ratio last year accounted for 40 per cent of all office transactions, CBRE estimates the number this year goes up to 60 per cent.
Bucharest’s office market is also changing in terms of the distribution of new supply, with new projects spread throughout the city, which could alleviate the traffic on the North-South axis. “We have new submarkets like Expozitiei, Cotroceni, Tineretului and Timpuri Noi which are taking the pressure of the CBD and the north, allowing people to have more options in choosing their workplace in relation to their home,” Paduroiu concludes.
Geo Margescu, Founder & CEO of Forte Partners, believes that tenants are very cost-conscious and that besides rent levels, location is important for the retention of personnel. “The market is made up of smaller and more educated developers, who are starting new projectsmore cautiously.As long as we keep on developing with the same ratio of pre-lease secured and with a healthy amount of equity in the bank to make sure the project gets finalized, I’m not concerned about vacancies and market downturns,” he said during CEDER.
