Analysis of Office Spaces in T1 2013

In T1 2013: transactions of up to 1,000 sq m had the largest share in the market

• ESOP Consulting is a leader in the most dynamic segment of relocation transactions, the one with areas up to 1,000 sqm; How the market is divided depends on the size of the surfaces.
• The structure of transactions in the office market in T1 in terms of the type of transaction. How they evolved, rents, pre-leases, and renegotiations

I. ESOP Consulting is a leader in the segment of transactions with relocation offices of up to 1,000 sqm

In the first quarter of 2013, the most significant volume of traded square meters was registered in the segment of relocations of companies with areas up to 1,000 sqm, more precisely 44%, while the spaces between 1,000 – 3,000 sqm registered a share of 37 %, and transactions of over 3,000 sqm – only 19%.

“The market of medium-sized companies was particularly dynamic in 2013. They are the companies that react most quickly to changes and market opportunities. And the current moment is a favorable one, with impressive office buildings in the market, with increased flexibility of lease contracts, a fact for which many medium companies have acted, in the sense of securing these solutions “, says Alexandru Petrescu, Managing Partner ESOP Consulting | CORFAC International.

Compared to the same period last year, the relocations of companies up to 1,000 sq m registered an increase of 15 percent, from 29% in Q1 2012 to 44% in Q1 2013. From a numerical point of view, in Q1 2012 registered 35 transactions in this segment, while in 2013, the number increased to 47 deals.

ESOP Consulting is in Q1 2013, a leader in this expanding segment, reaching a market share of 57% of total transactions with spaces of up to 1,000 sqm. Compared to the same period last year, the company reported an increase in the volume of transactions by over 30%.

The segment of transactions with areas between 1,001 sq m and 3,000 sq m registered an increase of 12%, from a share of 25% in the total relocations in Q1 2012 to 37% in Q1 2013.

On the other hand, the segment of transactions with equal areas and over 3,000 sq m registered a significant decrease, from 22,946 sq m in Q1 2012 to 7,000 sq m in the first quarter of this year.

STRUCTURE OF RELOCATION TRANSACTIONS (in existing buildings or under construction) in T1 2012 versus T1 2013

II. Space rental transactions in existing buildings dominated the relocations in T1 2013

Quarter 1 was dominated by rental transactions (made for existing buildings), a share of 58% of total deals. Compared to the 1st quarter of 2012, the registered increase was 41% (respectively 9,583 sqm).

Pre-leases (transactions made in buildings under construction) registered a rather low share of only 5%, accumulating 2,671 sqm. In the first quarter of 2012, the only pre-lease transaction, with an area of ​​22,946 sq m, raised the share of this segment to 46% of the total leased space in the entire market.

However, it is expected that this segment will grow in the next period, due to a large number of projects under execution.

The renegotiation/renewal of contracts also had a significant increase, registering a level 3 times higher than the same period last year.

“The next two years are foreshadowed as a dynamic period, especially under the influence of new projects under development, which will bring to market over 150,000 square meters of office space of the highest quality at very competitive rents. The year 2013 is the year in which probably the principal transactions will target these real estates “, declares Alexandru Petrescu, Managing Partner of ESOP.