Offices in Semi-Central Areas

The potential of the semi-central regions for the office market

Overview of the office market

The evolution of the office market between 1990-2002 In the introduction, we will point out three distinct stages in the local development of the office market in Bucharest 1990 – 1996, 1996 – 2000, 2000 – 2002.

    • 1990 – 1996 – the office market is in formation. Investors take high risks, but also a high rent capitalization rate of approx. 50 USD / mp;
    • 1996-2000 – the market develops – already existing structures are transformed (initially designed with another destination) into business centers – in the absence of spaces at western standards, multinational companies rent spaces in these buildings;
    • 2000 -2002 – there is a doubling of the existing areas on the market – the big real estate investors appear on the market. – the balance of demand-supply is balanced; the quality-price ratio is stable, the rents reach values ​​of 22-30 USD / sqm – 2000.

Bucharest was the most expensive city in Eastern Europe, with prices up to 40-60% higher than in Prague or Budapest.

Class A business centers delivered between 2000-2002:

  • Opera Center I PORTLAND Trust, area 11,000 sqm; year of delivery 2000;
  • Baneasa BC IMMOCONSULT, surface 8,000 sqm; year of delivery 2001;
  • Budisteanu BC IMMOCONSULT, 3,000 sqm, delivered in 2001;
  • Neocity Tower NEOCITY Group, 4,600 sqm, delivered in 2001;
  • UIC II UIC, 11,000 sqm, delivered in 2001 Opera Center II;
  • PORTLAND Trust, 3,300 sqm, delivered in 2002;
  • Europe House GTC, 13,000 sqm, delivered in 2002.

Office space market in 2004 Compared to Prague or Warsaw, Bucharest still has a limited stock of class A office space (150,000 sqm), compared to 1,800,000 sqm of class A space, as much as Warsaw, or 1,100,000 square meters. Prague. And this in the conditions in which Romania is the second largest country in Central and Eastern Europe (depending on the population). Bucharest does not have a Business District. The office buildings are located in various areas of the city, with a higher concentration in the North and on the Center-South axis. Victoriei-Aviatorilor Square area – Charles de Gaulle – special and intensely traded locations.

Class A Offices – DEMAND

Class A spaces dominate the mentioned areas – and are still sought after. The demand comes from the big (multinational) companies already existing on the Romanian market, which want offices at western standard, which the limited offer of the past could not ensure. As the new projects offer better quality at a competitive rent level, many transactions have been company relocations. The crucial aspects of the relocation are:

  • available surfaces;
  • building quality;
  • location;
  • budget.

Viewed by fields of activity, the demand came mainly from financial-banking telecommunications companies, multinational IT. The rents are between 16-20 Euro/sqm, to which are added maintenance expenses of 3 or 3.5 Euro/sqm.

OFFER of office space

In the second half of 2004, several office buildings were delivered. Most are medium-sized buildings, up to 5,000 square meters. The exception is Charles de Gaulle Plazza, with 25,000 square meters of office space.

Class A projects delivered in 2004:

  • 1 Palazzo Italia, University area, 5,900 sqm, delivered in Q1;
  • 2 Barba BC, Piata Victoriei area, 4,500 sqm, delivered in Q4;
  • 3 Cascade BC, Piata Victoriei area, 4,200 sqm, delivered in Q3;
  • 4 Charles de Gaulle Plazza, 25,000 sqm, delivered in Q4;
  • 5 Domus Stirbei, 3,000 sqm, delivered in Q3;
  • 6 Litexco Stirbei, 3,000 sqm, delivered in Q3;
  • 7 Danielopolu BC, North Zone, 3,900 sqm, delivered in Q4;
  • 8 Century Building, Piata Victoriei area, 4,800 sqm, delivered in Q3;
  • 9 Floreasca BC, Floreasca area, 6,300 sqm, delivered in Q3;
  • 10 Mecano BC, Romana area, 5,000 sqm, delivered in Q3;
  • 11 Unimed Building, University area, 5,300 sqm, T4.

For companies looking for spaces of over 3000 sqm, the existing solutions on the market are insufficient. Therefore they will prefer to wait for the large-scale projects proposed for completion in 2005-2006. Thus, these companies choose the pre-rental option. This way, they can be sure that they will not lose a quality building and get rent reductions of up to 20%.

Since the announced new projects are developed by reputable investors domestically and internationally, the quality of the space will no longer be a problem. The difference will be made by other aspects, such as the number of parking spaces, easy access, existence in the building or near banking centers, shopping, and restaurants.

Office market for medium-sized companies Class A spaces have been and will, of course, remain an essential segment of the real estate market. Still, starting with the period 2002-2003, another market has grown significantly, announcing new opportunities for real estate investors. It is about the market of office spaces for SMEs, small and medium companies, which are starting to develop and reach maturity. This creates the need for new office space and a market dedicated to these companies.

SMEs currently provide more than half of the jobs in Romania and have a contribution of over 40% of the gross domestic product of our country. There are 18 million companies in the European Union, of which over 99% are SMEs that employ 66% of the workforce and account for 55% of the Union’s turnover.

ESOP is the first real estate agency that has noticed the potential of this market. That has come up with a systematic approach to this field and has encouraged investments in office space dedicated to SMEs.

What solutions have SMEs found so far?

For a long time, the most accessible solution was the villas and apartments in villas, as well as new or renovated buildings, class C buildings in general. The exception was, of course, the start-up period when most resorted to renting apartments in blocks of flats (with less space and lower rents). The level of rents for these spaces is between 8-12 E / sqm for the spaces in villas, respectively, 8-11 E / sqm for the class C buildings. In 2004 we witnessed a particular phenomenon. Class B buildings have also become an important alternative for medium-sized companies (especially local consulting companies, media, or representatives of multinational companies recently entered the Romanian market).

It is significant in this respect that the vacancy rate for class B spaces reached a deficient level in 2004, namely 15%, the lowest level recorded so far. In 2001 it was 30%, respectively 37% in 2000. In addition to medium-sized companies, multinational companies also chose class B spaces for those segments of their activity that do not involve working with customers (technical departments, call centers). etc.).

In mid-2004 (May-July), a “crisis” of class B spaces was observed on the market, in the northern part of Bucharest. The standard buildings: Strauss BC, Puccini BC, HCS BS, INES BC, Zorileanu BC, have reached an occupancy rate of 100%. Many companies have been forced to refocus their searches on the segment of spaces in villas. There is still a shortage of class B office space (with areas of 200-400 sqm). The budgets that companies have for this type of building are between 11-13 Euro/sqm.

What is a Class B building?

There are some defining aspects:

  • flexible surfaces 150-2000 sqm;
  • budgets of 10-13 E / sqm;
  • data and voice infrastructure, internet connection, air conditioning, and parking spaces;
  • they also meet image requirements.

The demand for class C spaces has also increased, coming mainly from the IT and software field. The offer consists of 2 types of buildings: new spaces in semi-central areas, but quite a few and more oriented to the needs of customers and existing spaces before ’89, in former state enterprises.

These spaces currently have the potential for the office market (especially if they are in areas with good access to public transport and the subway). However, they require renovations and the creation of adequate communication infrastructures. Although there are many such spaces, their capitalization is currently done only to a small extent, because the institutions that hold them in the patrimony either do not realize their potential or do not have enough resources or flexibility to bring them to a standard appropriate to the wishes of a company.

Rents are between 8-11 Euro/sqm, these spaces being sought by a large part of SMEs in the first two years of their existence. Villas A special place on the real estate market belongs to villas, they occupy a strategic position concerning other types of office space, because the level of rents is lower (between 8 – 12 E / sqm), there are various areas: 100 – 400 sqm – location more easily adaptable to the requirements of a company – maintenance costs are lower – parking spaces.

Of course, there are also disadvantages when choosing a space in the villa: there are unusable spaces (halls, stairs, storage spaces) so that the usable area is smaller than what is paid; the existence of relatively rigid compartmentalization, which may or may not be adapted to the company’s needs.

If the villas are close to class C offices in terms of price, in terms of quality and image, they compete with class B spaces, resulting in a competitive advantage over both categories. Moreover, there are villas with a classic style architecture, which through renovation/restoration become spaces of special prestige, being often preferred even by large companies looking for high-quality spaces, such as law firms (Miculita & Asociatii ), advertising and media (Graffitti BBDO, Ogilvy, etc.).

It has already become a template that, in real estate, what matters is – location, location, location. The location indeed has a substantial share in the success of a real estate project. But is it enough? By location and the importance it has for real estate success, we must not only understand the ultra-central areas, the most visible areas, the areas with the highest notoriety. At first glance, one might think that whoever has a central location will succeed in a successful real estate project, and whoever has a semi-central location has little chance of success.

LOCATION – is just the first step. The correlation between location – construction – “customers. If we start from the client profile for whom we build a building, then there are clients for whom there must be buildings in the city center because they are companies for which image and notoriety are essential. And the budgets you allocate for this are just right.

But there are also customers for whom other aspects take precedence, such as medium-sized companies, IT and software companies, which value functionality and have lower rental budgets. If we start a real estate project from the profile of the companies that will rent the space, we will conclude that the semi-central locations have their market. This is why I think it is good to understand what the real scope of the generic term LOCATION is – within an office project.

Adapting each building to the location is the most important aspect of a successful real estate project. It is, therefore, necessarily a correlation between location – construction – targeted customers. Offices in semi-central areas: There are two semi-central areas in which the office market has a remarkable development 1. Pipera Platform 2. Grozavesti- Semanatoarea area.

  1. The Pipera platformis the first area in Bucharest that has demonstrated that semi-central areas have potential. The IRIDE business park is an example of this. Advantages of the Pipera platform:

– proximity to the most sought after residential areas of Bucharest (Herastrau, Primaverii, Domenii, Floreasca, Iancu Nicolae-Pipera, etc.);

– access to the Metro and public transport;

– the existence of a successful business park – IRIDE – which created quality spaces (new buildings or under renovation) and attracted valuable clients through efficient management (Raiffeisen Bank, Wella, Whirlpool, Nestle, JTI, Orange).

Except for the IRIDE park where new constructions are being carried out, the Pipera platform is currently characterized by the renovation of existing buildings (Novo Park, Electronics, Connect, etc.), Iride Business Center 30000 Pompei BC 2400 Connect 11500 Novo Park 10881 Aerofina BC 4000 Total 53300 IRIDE is an example of the development of a business park in the semi-central area. The build to suit concept has been the foundation for many of the relocation solutions offered to companies.

The flexibility that the complex provides through the expansion solutions that IRIDE offers. The rent level follows the market trend, and that is why the IRIDE real estate product is attractive. The park benefits from excellent connections to public transport. There is a metro station 75 m from the Park and also tram and bus stations. The easy connection with the city center and the airport are important advantages of the Park. Both by the quality of the space and by the companies it has in its portfolio, IRIDE is on the first place in the top of the office spaces in the semi-central areas. CONECT – 11500 sqm – Gf + 5 floors, 1800 sqm per floor, smaller areas (430,500). The building offers open spaces, data and voice network, air conditioning, access through 3 modern elevators, and a freight elevator, sufficient parking spaces in its own yard (a parking space at 50 sqm rented). There will be other interesting facilities on the ground floor, reception, conference rooms, confectionery, etc. Spaces in this building will be available starting with December 2004.

  1. Grozavesti area – Semanatoarea, has registered essential changes in the last two years. We believe that it is the most dynamic semi-central area where new office buildings are being built. In the previous two years alone, projects totaling 20,000 sq m have been launched on the market. We believe that together with the Pipera platform, the Grozavesti – Semanatoarea area will continue to be one of the most attractive semi-central areas for the development of office buildings both due to the largest university campus in Romania and the metro stations and easy access to the central area and north of Bucharest. Business Center Area Global BC 13500 Ayash BC I, II, III, IV 10000 Libra BC 1500 Sema Parc BC 2500 Bog BC 2000 Grozavesti BC 1800 Total 31300. The most important building in the area is Global BC, an investment of approximately 15 million US.

The 13,500 sq m of offices are rented by Connex. This time, we have a new example of a successful real estate project in a semi-central area after IRIDE BP. Ayash BC, which includes 3 completed buildings and one under construction (a total of 10,000 square meters of offices), has a 100% occupancy rate for the completed buildings. Approximately 80% of the companies that have rented spaces are software companies.

Thus, the Grozavesti Zone – Semanatoarea tends to become a reference point for the IT, software, media, technical departments in large companies (Connex, Banc Post).


– the lands are cheaper and easier to find: surfaces of 1400-10000 sqm are available at prices of 150-280 E / sqm – there is a market for class B and C buildings;

– there are more generous parking spaces – the proximity of the university campus, where there is a young and educated workforce, qualified in the technical-economic fields;

– there is an accentuated zonal development, Carrefour Orhideea, Bricostore, New office buildings (Global BC – where is a department of Connex company).


– the area is developing, and sometimes the neighborhoods leave much to be desired;

– there is an old electricity distribution infrastructure in the area; the costs of optimizing the electricity supply are borne by the investors and not by the supplier.

Grozavesti area – Semanatoarea – potential location for a software and IT technology park At present, the real estate market offers few alternatives to IT companies, especially software companies. These companies’ requirements generally concern the functional part of the space, such as the high-performance infrastructure for communications, open, flexible spaces, good access to public transport, and less the image part of the space (central positioning, visibility, etc.).

That is why we believe that the development of software parks in the Grozavesti – Semanatoarea area is a real estate product that the market needs, especially as at present, software parks are well-developed entities in many European countries.

From this point of view, the proximity of the Regie-Grozavesti university campus (the largest in the country) and the easy access to the city center through the two metro stations (Grozavesti and Semanatoarea), as well as the still low price of land in the area, are arguments for this type of investment.

Conclusion: We consider that the semi-central area offers investment opportunities in office buildings both to developers with lower financial power (800,000 – 2,000,000 Euro – Ayash BC, Libra BC, etc.) and to developers with high financial power (10 – 30 million Euro – IRIDE BP, Global BC, etc.). Finding a good location is the first step in achieving a successful real estate project. At the same time, it is just as important to adapt the office project to the site and the profile of the client it is targeting.

That is why consulting a specialized real estate company before starting the office project is necessary, because, in the modern economy, the product is made after preliminary market research and according to the characteristics of the existing market demand. First, we need to know who the potential customer is. Then we will know which product is the best fit, and which has the highest chances of success and has the lowest chances of failure. Do not forget that the semi-central areas of Bucharest have their market and that the profitability rate can be as high as for the office buildings in the center. That is why we have briefly made a profile of customers for office buildings in the semi-central area.

Client profile for semi-central areas – Irina Petrescu, Director of the ESOP Office Department:

Who are the clients targeting semi-central offices? What are their requirements? What budgets do you allocate for rent? These are just some of the questions we will answer in the next few minutes.

I. What clients want from Semi-central:

– large surface per level;

– open space;

– decent finishes and endowments for office activity;

– more parking spaces;

– easy access;

– civilized neighborhoods;

– prices between 7-12 EUR / sqm.

II. Large floor area (400 – 1000 sqm), preferably open.Any company wants to be able to accommodate all employees on one level. Because this cannot be quickly done with large companies, it is preferable to have a large floor area. Thus, the company will run more on the horizontal axis and less on the vertical axis. The reason for this requirement is given by the efficiency of communication between departments. If a semi-central building has over 400 sqm/level, it is good to take the space’s modularity and flexibility into account from the design phase. To expand the area of ​​potential customers, and a floor can be divided between 2 or 3 tenants. The open system has already been adopted by most investors in office buildings (from class A to class C). This requirement is found in 80% of customer requests.


III. Features – following the client’s typology In the semi-central office endowments (security, air conditioning, IT infrastructure, telephone lines, a good internet connection) have a greater weight in establishing the rent price and the time in which the building will be rented, than the finishes of the building. It is good to know this to avoid investing money in unique finishes and leaving the office equipment in second place. The finishes must be correlated with the customer’s profile. Starting from the type of clients we target, we also establish the finishes. And to establish this profile, we must consider the entire context: the area, the access, the development perspectives of the area, the proximity of some centers of interest, etc.

IV. More parking spaces: we treat this aspect separately, although it is part of the endowments because parking is a real problem for Bucharest, the central areas in general. Here the semi-central area can have a considerable advantage that it would be a shame to neglect. We know that due to the crisis of parking spaces in the center, most buildings that offer parking spaces do so against a monthly subscription (between 50-180 Euro/month/parking space). And there are many cases in which even with a subscription, companies do not find how many parking spaces they want. In semi-central areas, positioning the building in a more airy area or providing sufficient parking spaces, in the yard or outside, included in the rental price or at a lower price than in the center, can be strengths in attracting customers. The parking regime we recommend is 1 parking space for 50-70 sqm rented.

V. Easy access and civilized neighborhoods:easy access is one of the decisive issues for choosing the headquarters. We must NOT lose sight of this. The distance from the center can be calculated both in kilometers and in minutes. Thus an excellent connection to public transport and the existence of a subway station can compensate for the distance from the center. Here we make a parenthesis. The presence of a subway station is preferred because the RATB is still in a pathetic state. In the conditions in which an employee has to change many trams and buses to the office, imagine what disposition he still has work and efficiency. So let’s remember that the proximity to a subway station increases the value of the real estate project and attracts customers. Another important aspect is the neighborhoods. These are both aesthetic and especially safety considerations.

VI. Budget at the rent level.We must understand that the price must be related to the whole context: – the quality and features of the building – the area – the access, the connection to the means of public transport – the neighborhoods – the competition of other buildings. Depending on the client’s requirements, the budgets for buildings in semi-central areas are between 7-12 EUR / sqm.

VII. What is the offer with the highest chances of success? It is the one in which the owner ensures all the endowments: partitions, IT and telecommunication infrastructure, air conditioning, carpet, blinds, parking spaces. All are included in the rental price. These facilities must be permanently correlated with the rental price and contractual conditions. If the owner customizes the space according to the client’s requirements, it is natural to ensure, by contract, that he will stay in the building for as long as possible. We consider that through a contract of at least 2 years, the investments in the personalization of the space can be amortized.


Case Study 1 ZTE Corporation Moves to Pipera via ESOP Regular customers for semi-central offices are software and IT companies. Apart from these, there are also cases of large, multinational companies that choose semi-central buildings for the relocation of technical departments, call-center divisions, etc. This is what happened to ZTE CORPORATION, which operates in the telecommunications field. It is the leading supplier of telecommunications equipment for the telephone company Postelecom. The headquarters of the ZTE CORPORATION company is in Marriott. Still, it was decided to set up an engineering department, which had to be quickly accommodated in the space of about 800-1000 sqm. ESOP has been appointed to find a solution for this department in the shortest possible time and, if possible, a turnkey space.

In addition to the large, open space requirement, with the possibility of adapting to the company’s structure, there were also requirements related to the existence of IT and telecommunication infrastructure, the presence of a high-speed internet connection, the presence of generous parking spaces, easy access and not in lastly, a price appropriate to their budget. The solution found by ESOP is a building on the Pipera platform that has been entirely renovated by a Greek investor. ZTE CORPORATION opted for a space of 936 sqm. It was developed on two levels (GF + 1), the open type that was partitioned according to customer requirements. An attraction was the possibility for the owner to achieve the entire IT and telephony infrastructure. The space benefits from a large number of parking spaces allocated in the yard of the building: 1 parking space / 50 sqm rented. As Alexander said earlier, the Pipera Platform is one of the most attractive semi-central areas, with many advantages and is in full development. Grozavesti-Semanatoarea area.

Case Study 2 Ayash BC, the first investor to believe in the Grozavesti area AYASH CENTER, a complex of buildings near Carrefour Orhidea; – at this moment, there are 3 completed buildings (8000 sqm) with an occupancy rate of 100%. The fourth building (2400 sqm) is under construction (already 20% has been pre-rented) – 80% of the tenants are IT and software companies – the spaces are the open type with 400 sqm/level, thus targeting both small and medium companies, but also the big ones.

ESOP contributed to the occupation of 30% of AYASH CENTER I and 90% of AYASH CENTER II. – The facilities and facilities of AYASH buildings are security, parking in the yard of the building, carpet, very bright spaces. There is an excellent connection to public transport: 3 minutes to the subway station, connections to RATB. Companies targeting semi-central areas – IT and software companies – media companies and media trusts – design and construction companies – technical departments of large Romanian and multinational companies. In general, these companies or departments do not work with the public. They do not need a particular image or position. Without minimizing the advantages of central areas, we have confidence in the potential of semi-central zones. We believe that successful investments can be made in these areas.

Maria Neda

PR & Media Coordinator, PR & Media Consultant, with background as a journalist in the economic press and experience as a consultant in Urban Development.

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