Esop: Office owners should also look more closely at medium-sized companies
ALEXANDRU PETRESCU, the managing partner of the real estate consulting company ESOP, one of the essential local brands in the profile market, appreciates that in Bucharest there are currently unoccupied office spaces, with a leasable area of over 600,000 square meters in class buildings A, B and C, and lower quality property owners will have difficulty finding tenants, given that large companies currently have eyes only for the best new projects.
“I think an interesting question is about what will happen to the buildings that are being vacated, generally class B, from which tenants migrate to new, better buildings, at market prices. I think the owners should target other types of customers than they were used to – two or three large companies occupying the entire building. Orientation to medium-sized companies would also offer them more advantages, “, considers Mr. Petrescu from ESOP.
The consultant appreciates that office owners should make a mix of tenants, similar to the one in malls. There are both large tenants, which offer some stability, but whose impact is more robust in case of departure, and more small tenants, which can pay a higher rent per square meter, can be moved more easily if a customer wants to expand. He states that in the current period of crisis, the renting of space takes about 6-12 months, and the impact on the building’s income is high.
For example, a three-year calculation shows that if in a 10,000-square-meter building, half the space is unoccupied for nine months, the average rent for each square meter of the building is 10.5 euros instead of 12. euro, under the conditions of maintaining an average level of 12 euro/sqm for the occupied spaces.
He believes that this year there will be a more pronounced migration of companies from lower quality villas to class B buildings. Before the crisis, there was an “exodus” of companies based in one or more many apartments to villas or lower quality business centers.
This year, deliveries of 100,000 sqm
Alexandru Petrescu estimates that currently, medium-sized companies, with 10 to 100 employees, occupy over 1.5 million square meters, and approximately 1 million square meters are office spaces in class C buildings or villas.
“We believe that for the class B buildings in Bucharest, this large pool of potential clients represents a solution in these times for the decrease of the degree of vacancy they are currently facing.” Another factor of pressure on office owners will come this year from developers who will deliver another 100,000 square meters on the market.
“In the last year, we have noticed a change in optics for some of the business center owners we work with and who have started to consider medium-sized companies more often. To access this pool of clients, it is necessary to open the modulation of spaces in areas between 100 and 700 square meters and to have more flexible contractual conditions regarding the lease term “, says Petrescu, who leads and is a shareholder of companies with 25 employees and business of 600,000 dollars (470,000 euros) in 2012.
Esop is a “volume” consulting firm, which last year brokered 67 small and medium-sized transactions in the office market, with a volume of almost 30,000 square meters, contracts that brought about 90% of the company’s revenues. Since the beginning of the year, the company has brokered 11 more transactions with an area of 2,300 square meters of offices. For the entire year, it aims to achieve a volume of transactions of about 40,000 square meters and revenues of 700,000-800,000 dollars.
You can find the full article in the printed edition of ZIARULUI FINANCIAR and on www.zfcorporate.ro!