The Bucharest Office Market Update S1 2023

by Mirela Raicu
26 July 2023
Real Estate Reports
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In S1 2023, the total volume of transactions on the Bucharest office market reached 176,900 sqm.

The most sought-after area in S1 2023 was the Central-North one, with 69% of the total (Pre)Lease & Expansions volume.

The IT&C industry had clearly led the office market in S1 2023, with 35% of the newly leased areas.

Download the study ESOP_Office Market Update in S1 2023

OCCUPIER FOCUS

Lease Transactions by Category

In S1 2023, the total volume of transactions on the Bucharest office market reached 176,900 sqm.

From this, (Pre) Leases & Expansions represented 54%, and the remaining 46% was represented by Renewal / Renegotiation transactions.

(Pre) Lease & Expansions, By Area

The most sought-after area in S1 2023 was the Central-North one, with 69% of the total (Pre)Lease & Expansions volume, followed at a great distance by the Central-West area with 18% and the Downtown, with only 6%.

(Pre) Lease & Expansions, By Industry

The IT&C industry had clearly led the office market in S1 2023, with 35% of the newly leased areas. This represents an increase of 50% of its percentage compared to 2022 when the IT industry represented 23% of the transactions.

The Financial Services and FMCG sectors followed with 14% and respectively 8% of the leased area.

Relative Stability on Office Leasing

S1 2023 maintained both on (Pre) Leases & Expansions and on Renewals segment a volume relatively close to S2 2022.

The (Pre) Leasing & Expansions segment maintains yet in S1 2023 at a 17% lower level than the first semester of 2022.

The Main Transactions in S1 2023

Tenant	Lease Area (sqm)	Building	Area
EMAG	10,000	Globalworth Square	Center North
TRANSILVANIA BANK	9,960	Green Court A	Center North
VOIS	5,460	The Bridge 2	Center West
COCA-COLA	4,500	Globalworth Campus – Bldg. B	Center North
MINISTRY OF TRANSPORT	3,780	Sema Parc London	Center West
NUCLEARELECTRICA	3,140	Crystal Tower	Downtown
Auchan (retail space)	2,600	U Center – Building B	Center South
ADSWIZZ	2,270	AFI Park Floreasca – Bldg. A	Center North
BUCHAREST STOCK EXCHANGE	2,230	America House	Downtown
FLIP TECHNOLOGIES	2,000	Riverview House Atrium	Center West

OFFICE DELIVERIES

Main Office Projects to Be Delivered in 2023

Area	Project Name	Delivery	Surface (sqm)	Location
CENTRAL-WEST	ONE Cotroceni Park – Phase II	S1 2023	34,000	Razoare
CENTRAL-NORTH	Equilibrium – Phase II	S1 2023	19,400	Barbu Vacarescu
	@EXPO – Building A	S1 2023	28,300	Piata Presei
	Muse	S1 2023	7,000	Piata Presei
CENTRAL-SOUTH	U-Center – Building B	S2 2023	35,000	Tineretului
DOWNTOWN	ARGHEZI 4 Business Center	S2 2023	7,500	Universitate

At the end of S1 2023, four office buildings were completed in Bucharest, with a total leasable area of 88,700 sqm.

OUTLOOK

Although if compared to S1 2022, the deliveries have been 11% lower this semester, the total annual volume in 2023 is expected to reach 136,500 sqm by the end of the year. This level would represent an increase of 28% compared to the office spaces delivered in 2022.

Considering yet that for 2024 there will be highly limited new deliveries, as most initially planned projects have delayed the commencement of the construction works, office deliveries will be under pressure for the following 12-18 months. This will be compensated by a series of office spaces becoming available in existing buildings, where leases reach expiry dates and tenants renew a new cycle for a smaller size, in the context of the hybrid working systems.