Bucharest Office Market Update in the Beginning of 2023

107,000 sqm of office spaces delivered in 2022, 60% less than in 2021 and almost 50% less than the 5 years deliveries average

  • Over 93% of spaces were delivered in the 1st Semester (approximately 100,000 sqm)
  • 90% of the new spaces are in office buildings that are part of business parks
  • For 2023 and 2024, compared to the previous years, fewer deliveries are currently planned: 153,000 sqm and respectively 115,000 sqm

The total level of transactions, (Pre)Leases and Renewals, registered a slightly higher level than in 2021, representing a 5% increase compared to 2021 and a 7.5% increase compared to the last 5 years average

  • Most transactions closed within Center-West and Center-North areas, adding up to 69% of the net take-up
  • IT&C, BPO, and SSC field remains the most active, but it registers a downward trend, having a market share of 23% in 2022 compared to 26% in 2021, 30% in 2020 and 50% in 2019

Rent levels remained relatively stable in terms of headline rent, especially on A-class office buildings situated within the central areas. Depending on the location, a slight decrease with up to 1E/sqm was registered in terms of net effective rent (considering the incentives like the rent-free periods and fit-out contributions).

Download the Study_Bucharest Office Market Update in the Beginning of 2023

THE OFFER

In 2022, 107,000 sqm of office space were delivered in Bucharest, 43% less than the estimate made at the beginning of the year. This represents a decrease of approx. 60% compared to the level of the previous year when 263,000 sqm were delivered.

Over 93.5% of spaces were delivered in the first half of the year, the first quarter recording the highest share, while in the last 6 months only one office building being delivered.

Most of the office buildings delivered in 2022 were grouped in the Center-West area, with 55% of the total area, 25% more than in 2021. The other areas where office buildings were completed were the Downtown area with 25% of the deliveries and the Center North with 20%.

The spaces in multi-building / business park type projects represented 90% of the deliveries.

The Main Projects Delivered in 2022 in Bucharest

DELIVERY PROJECT NAME SURFACE (sqm) AREA LOCATION
Q1 2022 @Expo – Buildings B1 si B2 21,400 CENTRAL-NOTH Piata Presei
Sema Parc –London Building 21,350 CENTRAL-WEST Grozavesti
Tandem Building 19,700 DOWNTOWN Universitate
Sema Parc – Oslo Building 10,200 CENTRAL-WEST Grozavesti
Q2 2022 Afi Tech Park 2 24,500 CENTRAL-WEST Razoare
Q3 2022 H Tudor Arghezi 7,000 DOWNTOWN Batistei

Estimated Deliveries for 2023 – 2024

For 2024 and 2025, projects totaling approximately 130,000 sqm are announced for the time being, but it is possible that this level will increase, in case new projects receive the green light.

A large proportion of the area forecast for 2024 has a delivery deadline at the end of the year, and the start of the construction is conditioned by the partial pre-lease of the building, this deadline can thus be postponed for 2025.

THE DEMAND

In Bucharest, the volume of spaces traded in 2022 stood at approximately 320,000 sqm. After 2020, when the pandemic caused many companies to suspend their plans to change or expand their headquarters, in 2021 the volume of office transactions returned to the level registered in 2017-2018.

In 2022 the most active companies were those in IT&C, BPO and SSC domain, with 23% of the total volume of transactions, followed by those in the Professional Services sector with 17%.

However, in recent years, the IT&C BBO and SSC field has registered a constant decrease in weight (from 50% in 2019, 30% in 2020, to 26% and 23% in 2021 and 2022, respectively), decrease correlated with the development of models of hybrid and remote work.

Main transactions in 2022

RENTAL TERMS

Rent levels remained relatively stable in terms of headline rent, while decreasing in net effective terms with up to 1 Euro/ sqm, depending on locations.

B-class offices, especially in less central areas, registered a slight decrease in headline terms.

Contractual periods got more flexibility, break options being possible to obtain after 3 years.

Subleases

In 2022, in Bucharest, was the same sub-lease volume as in the previous year, with a total volume of around 4,500 sqm. Yet, this is a small percentage compared to the total available spaces in the market.

In these cases, the rent level was generally 10-15% lower than the rents of the available spaces promoted by the owners in the respective projects. In many situations, this financial advantage did not tilt the balance.

The investment in the design of the spaces proved auspicious, the fastest subleased spaces being those with attractive layouts.

Rent Level Margins, within the main Areas l Office Poles

ESOP’s portfolio includes, in addition to office buildings for rent in Bucharest, office spaces for sale in Bucharest, industrial parks and warehouses for rent, as well as office spaces for rent in the main cities of the country.

If you would like more information, please contact the ESOP team by filling this brief form, or by phone (+4) 0723.26.61.97 or (+4) 021.528.04.40. We’ll promptly answer your inquiry!


Mirela Raicu

Founder Partner of ESOP Consulting CORFAC International, coordinator of the Corporate Office Spaces division, with 18 years of experience in real estate consulting and entrepreneurship.

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