The location determines rents on average up to 20% higher
If it is known that in real estate, always the most important 3 aspects were “location, location and location”, in the conditions of increasing competition on the market, this criterion becomes even more important than in the past. Bucharest (but gradually, also the provincial cities) are on the road to a more mature real estate market, which implicitly means more options and more predictable and economically anchored evolutions.
What happens in this context with the properties on the office market and their perception? First of all, there is a differentiation of the rents of the buildings – which, although made at similar quality standards – are significantly different, with variations of up to 20% considering an average of the main areas in Bucharest. Analyzed individually, the differences found in certain situations can go up to 35-42%.
“The location takes precedence even more than in the past in determining the rent of a building, and factors such as the quality of finishes and equipment, although important, are in second place.” Thus, a review of the prices charged in various areas for new, high-quality buildings indicates the following values:
- Piata Presei Libere – Baneasa: 16-18 Eur / sqm
- Buildings located between Piata Presei Libere and Baneasa Airport 14-17 Eur / sqm
- Buildings located after Baneasa Airport Pompeii Boulevard: 13-15 Eur / sqm
- Barbu Vacarescu: 14-17 Eur / sqm
- Pipera: 13-16 Eur / mp
Central-North AREA: Piata Charles de Gaulle, Piata Victoriei 17-20 Eur / m.p.
CENTRAL: Romana, Universitatii, Unirii 16-18 Eur / sqm
Central-Western AREA: Cotroceni, Grozavesti- Semanatoarea 14-18 Eur / sqm
WEST AREA: Iuliu Maniu Boulevard – Bucharest – Pitesti Highway 12-14 Eur / sqm
EAST AREA: Republic – Theodor Pallady 11-13 Eur / m.p.
Such evolutions are natural, and they are also present in the case of large European cities. The most obvious example is London, where while in London City rents range from 40-55 pounds/sqm, in the West End, they reach levels of 80-85 pounds/sqm.
And in Paris, there is strong competition for buildings located in prestigious locations. In the Central Business District (CBD), rents of 50-60 euro/sqm are charged, while in Defense, the rent decreases to 30-35 euro/sqm. In the south-east of Europe, the same tendency is manifested, but the differences are much smaller. An office building in the center of Budapest can be occupied for rent of 17-20 euros/sqm. In comparison, in non-central areas, the rent reaches values of 11-13 euro/sqm. This situation is also valid for Warsaw: central location – 17-23 euro / sqm; non-central location – 13-15 euro / sqm.
“The situation in Romania, therefore, falls within the same pattern of evolution of the office market, in which what many customers have to pay as a priority is the location. Of course, the highest rents are found in very central and particularly visible areas, such as the Markets / Convergence Points of the boulevards (Victoriei Square, Charles de Gaulle Square). An excellent location means, first of all, an efficient transport infrastructure (the subway being the most appreciated means of public transport), and easy access with private cars.
Other characteristics are of course the neighborhoods, the facilities present in the area or nearby (restaurants, recreation areas, gyms, parks, etc.), the degree of development on the office segment of that area, the presence of certain reference points (be they public institutions, culture, parks, etc.).” (Andreea Andrei, PR & Marketing Coordinator ESOP)