The Medical Field Has Surpassed the It&C Field as a Share Among the Tenants of Office Space in 2021, in Bucharest

The share of the medical field has grown from 3% of total office leases in 2019 to 10% in 2020, the first year of the pandemic, and has reached 23% at this current moment in 2021, according to monitoring by ESOP Consulting l CORFAC International. In addition, there is an increase in total demand from medical companies, which this year traded a total of 31,540 square meters of office space in Bucharest, given that they rented 10,280 square meters throughout 2020.

Medical and pharmaceutical companies rented the largest office space for medical clinics, hospitals, or headquarters in the first nine months of 2021, about 23% of the total market, surpassing the share of IT&C companies (which accumulated 22%).

Among the medical and pharmaceutical companies that have rented new spaces this year are: Victoria Medical Center, Ares Center of Excellence, Trident Clinic, Provita Hospital, Medicover Hospital, PMEC Medical Equipment Center, Alcon and Astellas.

They chose office buildings such as Global Business Center, Empire Tower, Herastrau Office Building, Iride Business Park, Multigalaxy Building, Green Court and One Tower.

“At the end of 2019, before entering the pandemic, 50% of the total office space rented in Bucharest was for the employees of IT&C companies, this field occupying by far the first place in the share of tenants. In the first three quarters of this year, the IT&C field was surpassed for the first time by the medical field, the demand for such spaces increasing substantially. The health crisis generated by the COVID 19 pandemic has created the need for more medical services and products and we believe that this is seen in the growing share of demand from medical companies. At the same time, the need to work from home due to health risk has led many IT companies to adopt hybrid work, so plans to relocate or expand office spaces have been postponed. However, we believe that there will be relocations among IT companies in 2022-2023, when the pandemic will decrease significantly in intensity, to provide employees with office space adapted for hybrid work and in buildings that have implemented measures to reduce the risks generated by COVID 19”, says Alexandru Petrescu, Managing Partner at ESOP Consulting l  CORFAC International.

THIS YEAR

BEFORE THE PANDEMIC – 2019

LAST YEAR – 2020

HISTORY OF THE LAST YEARS

Before the pandemic, in the last three years, between 2017 and 2019, the demand from IT&C, BPO and SSC companies dominated the office space rental market.

In 2020, the demand for offices for IT&C, BPO, and SSC employees has decreased, and this year the premise is to stay at the same level as last year (the volume of rented space is plotted by the end of the first nine months of 2021, and for previous years for 12 months).

In 2017, the engine of the office market was the IT&C, BPO, and SSC segment with a share of 51% of transactions.

The next important segment was Finance, Banking, Insurance with a share of 16%, while areas such as Construction and Real Estate, FMCG or Media Marketing had shares between 3 and 5%.

And in 2018 most of the space requests came from the IT&C, BPO and SSC segment with a share of 36% of transactions.

However, the Construction & Real Estate segment was the star of that year, having a significant increase compared to 2017 due to the entry on the market of new shared-office operators who pre-leased important areas.

In 2019, the IT&C, BPO and SSC segment increased again, with most space requests coming from companies of this type, with a total of 50% of transactions.

The Finance, Banking and Insurance segment had an important share, occupying 17% of the leased area in Bucharest. The field of Construction and Real Estate was still active, with 8% of the demand, here usually being included companies that rent office space and redevelop them, in order to sub-rent them in shared offices regime.

In 2020, the IT&C, BPO and SSC segment reduced its volume, but also the share in total transactions, falling from half to one-third of total transactions.

On the rise, there were companies in the field of Professional Services, with 16% of the leased area and Financial sector with 14%, while the Medical and Pharmaceutical field started their expansion slowly, at the end of the year already accumulating 10% of the traded area in Bucharest. In 2020, however, the demand from investors in shared-office spaces almost disappeared.

In 2021, in the first part of the year, the demand from IT&C companies went side by side with that of the companies in the medical field, in the second part of the year being exceeded by a percentage.

In the future, the Medical field will maintain a high level of demand for new spaces, due to the greater need for medical services, in the current epidemiological context.

In 2021, the field of Finance, Banking and Insurance maintained their share and the companies of shared offices, in the field of Real Estate and Construction, slowly returned.

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!


Alexandru Petrescu

Founding Managing Partner of ESOP Consulting | CORFAC International with 20 years of experience in real estate consulting and entrepreneurship.

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