The total leasing activity of the office market reached over 169,000 sqm in the first six months on this year, a 12 percent increase compared to the same period last year, according to an analysis by Crosspoint Real Estate, international associate of Savills in Romania.
Although the office market is going through a challenging period, from mass adoption of hybrid work to significant cost increases due to inflationary pressure, after a first quarter that indicated a decline in demand for office space, tenant interest appears to have increased. With a relatively equal proportion between renewals, renegotiations, subleases and new lettings, demand for office space in H1 2023 was concentrated in the northern part of the city. Pipera and Floreasca/Barbu Văcărescu areas accounting for 53 percent of the total rental volume, followed by the city centre (18 percent) and the central-west area (15 percent). The increase in demand was also reflected in the average deal size, of almost 1,400 sqm, after falling below 1,000 sqm in the first quarter.
“Although the market appears to have adjusted to the slower pace of demand growth in recent years, with limited deliveries for the next 18 months, the vacancy rate remains high, at over 12%. If we also take into account the spaces available for subletting or the spaces that will become vacant after the downsizing of some major tenants, if the pace of demand remains steady in the coming period, the vacancy rate may return to pre-pandemic levels only after the second half of next year. However, this context creates opportunities for smaller tenants, who can access ready-to-let space of superior standards in modern buildings located in established office hubs,” says Daniel Mitu, Senior Account Manager Office Agency, Crosspoint Real Estate.
