The Office Market in Bucharest at the Beginning of 2024

2023 OVERVIEW

2023 brought deliveries of 130,700 sqm to the office market, which represented a 22% increase compared to the previous year. At the same time, however, compared to the average deliveries in the last 5 years (228,000 sqm), 2023 recorded a decrease of 43%.

✓ 68% of the 2023 deliveries took place in the 1st Semester
✓ 89% of the new spaces are part of business parks.

Download the Esop study The Office Market in Bucharest_at the Beginning of 2024

For 2024 the deliveries will be of only 20,200 sqm, the lowest level in the last 20 years. Only one significant high-class project is announced, namely AFI Loft Cotroceni.

As a whole, the volume of office transactions in 2023, aggregating both (Pre)Leases and Expansions as well as Renewals / Renegotiations, registered a substantial increase compared to 2022 of almost 40% and a 48% increase compared to the average of the last 5 years.

Analyzed separately, (Pre) Leases and Expansions in 2023 remained at stable values, with only +/-2% variations compared to 2022, as well as to the last 5 years average. In 2023, the IT&C, BPO, and SSC companies were the most active, returning to the pre-pandemic level, with 46% of the newly leased areas.

The Renewal/Renegotiation transactions registered a notable increase, namely a doubling in 2023 compared to the previous year and a 2.5 increase compared to the average renewal transactions of the last 5 years.

Regarding the rent levels, they registered a slight increase in the headline, especially in the central areas and for the class A buildings. Increases of up to 1 – 1.5 Euro/sqm/month depending on the location were registered for the headline rents.

THE OFFER

In 2023, 130,700 sqm of office spaces were delivered in Bucharest, 15% less than the estimation from the beginning of the year. This area still represents a 22% increase compared to the level of the previous year, when 107,000 sqm were delivered.

Most office buildings delivered in 2023 were located in the Central-North area, with 42% of the total, 22% more than in 2022. The other locations where office spaces were delivered were Central-South with 27%, Cental-West with 26%, and Downtown with 5%.

Spaces in multi-building / business park-type projects represented 89% of deliveries in 2023.

The Main Projects Delivered in 2023 in Bucharest

Delivery	Project Name	Size (sqm)	Area	Location
S1 2023	One Cotroceni Park – Phase 2	34,000	CENTRAL-WEST	Razoare
	@Expo – Building A	28,300	CENTRAL-NORTH	Piata Presei
	Equilibrium – Phase 2	19,400	CENTRAL-NORTH	Barbu Vacarescu
	Muse	7,000	CENTRAL-NORTH	Piata Presei
S2 2023	U-Center – Building B	35,000	CENTRAL-SOUTH	Tineretului
	Arghezi 4	7,000	DOWNTOWN	Universitate

Estimated office deliveries for 2024

At the beginning of 2024, for the current year, the completion of a single new office project, AFI Loft, integrated into the AFI Cotroceni Mall is planned, as well as the conversion of the former Puisor Post Office into office spaces.

Although the year 2024 is foreshadowing a period of calm in the development of office buildings in Bucharest, companies that are considering changing or expanding their headquarters have at their disposal extensive areas in high-class office buildings already in use and that have office spaces available.

THE DEMAND

The volume of spaces rented in 2023 in Bucharest combined on the two components – (Pre) Rentals and Expansions, respectively Renewals / Renegotiations was approximately 445,000 sqm. If in 2020, the pandemic caused many companies to suspend their plans to change or expand their headquarters, starting with 2021, the total volume of transactions recorded an upward trend. In 2023, this increase was mainly due to the doubling of renewal transactions compared to the previous year.

In 2023, the most active companies were those in the field of IT&C, BPO, and SSC, with 46% of the total volume of transactions, followed by those in the field of Services and Consumer Goods with 11%.

After several years in which the IT&C BBO and SSC field registered a constant decrease in weight (from 50% in 2019 to 23% in 2022), a decrease correlated with the development of hybrid and remote work models, the year 2023 brings an obvious revival of the demand for new premises from companies in this field.

Main transactions in 2023, in Bucharest

RENTAL TERMS

The rent level registered a slight increase in terms of the headline, up to 1 – 1.5 Euro/sqm/month depending on the location, considering that the indexation of the rents with the inflation rate raised the value of the rents paid by tenants who have ongoing contracts. Also, the downward trend of new construction permits for office buildings and the rising construction costs contributed to the decision to increase the headline rents by the owners.

Rent level margins, by Class, within the main Areas l Office Poles

The map below shows the general level of rents in Bucharest, during the year 2023.

Esop Partners in time

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!