The western Romanian city of Timișoara has become a competitive market, and during the last few years it has seen the development of a number of good quality office projects.
Mulberry Development, one of the biggest players on the market, which owns Isho Offices and City Business Center in Timisoara and The Office in Cluj Napoca, is still not considering investing in Bucharest, “given the permitting situation”, as Ovidiu Sandor, CEO of Mulberry Development explained during CEDER.
The company continues to concentrate on second tier cities, who have proven to have a more efficient city administration, like Sibiu, Cluj, Oradea, Brasov.
“There are more and more second and third tier cities where I see positive development which creates the premises for new projects, be it residential, offices or mixed-use concepts. I believe we will see coworking places in residential areas in the future,” Sandor said.
He also added that Romanians need to change their preconceptions about common living concepts, which date from communist times.
According to Sandor, since last autumn there’s been an increase in demand. Companies are making their post-pandemic plans, which include relocations or upgrading to better quality buildings: “I don’t know if tenants would actually pay more, but those who have sustainability issues don’t make it to the short list.”
While the competition on the office market is high in Timisoara and there is demand, no new projects are planned in the foreseeable future. “This means we will see rents going up, because construction costs are going up, there are restrictions in urban planning, so there will be an imbalance between demand and supply,” Sandor pointed out.
For the time being though, tenants are still negotiating with their employees what the return to the office means, and the mixed use concept seems to be valid in this context.
“It’s important you have a whole ecosystem of services, so we’re opening a kindergarten in one of our projects, which will be a magnet to encourage people to come to the office,” he said.
Also, as many developers are shifting their interest towards the residential segment, this can lead to less supply of office space în the near future.
