Renegotiations pulled up the office space market in the third quarter

During the third quarter of 2020, which just ended, the office market rental reached 56,730 sqm, a transaction level closet o the one registered in the same quarter in 2019, namely 88% of that period, according to ESOP Consulting. For more than half of these spaces, tenants preferred to stay in the same office buildings, renewal contracts being signed.

There has been an increase in this segment of contract renegotiations compared to the previous quarter and the same quarter last year. Leases for office space were extended in the third quarter of 2020, amounting to 77% more than in the same period the previous year.

“A positive signal is the resumption of office space trading activity in new business centers. Even if the volume of contract extensions is higher than that of relocations in new buildings, we believe that the relocation trend will continue to be upward in the next 12 months. This is due to the fact that there are tenants who want to respect the social distance measures and choose to move to a new location and configuration of workstations in this regard. Also, tenants can now consider the landlords’ higher availability to offer competitive rents and turnkey solutions for office space fit-out according to the new anti-COVID conditions – 19”, says Alexandru Petrescu, Managing Partner at ESOP Consulting at CORFAC International.

In the second quarter of this year, covering the period of lockdown caused by the beginning of the COVID – 19 pandemic, the renegotiation segment had fallen to 24% compared to the same period last year.

The pandemic protection measures taken by the office building owners between May and July 2020 increased the tenants’ confidence and led to a transaction return. Among such measures, the most effective proved to be providing disinfectants at receptions, in common areas, separate access flows in the building, and the common spaces, signaling people’s positioning in the elevator, sanitation of air conditioning systems, etc.

The leases and pre-leases of office spaces reached 23,268 sqm in the third quarter of 2020, which is about 60% of those recorded in the same period in 2019.

“In the last three months, new office tenants preferred office buildings under various construction stages such as One Tower, One Cotroceni Park, U Center, Ana Tower, The Light, Splay Offices, Miro Office, etc. We believe that in the next 12 months will continue the trend of renting office space in new business centers which implements technical systems to combat the pandemic such as high-performance air filtration and fresh air supply systems, access to office space without touching surfaces, etc. and where workstations can be arranged in compliance with the rules of physical distance”, says Alexandru Petrescu from ESOP Consulting.

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