Bucharest's office market: a snapshot of recovery

 

Bucharest's office market is demonstrating remarkable resilience and a clear path to recovery. In the first nine months of the year, companies leased an impressive 197,200 sqm of office space, with more than half of this volume representing new demand. While the total transacted volume saw a 25% decrease compared to the same period last year, this figure is juxtaposed against a significant market positive: the vacancy rate has plummeted to 12.8%. This marks the lowest level recorded since Q4 2020, primarily attributed to the absence of new office deliveries in the recent past.

 

Dynamic demand and strategic locations

 

Bucharest's total office stock stands at a substantial 3.429 million sqm, accounting for 15% of the entire Central and Eastern European (CEE) stock. The third quarter of 2023 proved particularly strong, registering the highest quarterly volume of the year with 75,800 sqm transacted. This vigorous activity highlights areas of high interest for businesses. The most sought-after locations include the Center-West (23% of demand), Floreasca Barbu-Văcărescu (18%), and the established business hubs of Dimitrie Pompeiu and the Central Business District (CBD), which together accounted for 16% of demand. These areas offer strategic advantages for companies looking to establish or expand their presence in Bucharest.

 

Future-forward: a robust development pipeline

 

The good news for businesses seeking modern, high-quality office spaces is the significant increase in Bucharest's office pipeline. The city is set to add 169,500 sqm of new office space, all of which is scheduled for completion by the end of 2027. This development surge is backed by major players in the real estate sector, with projects valued at a substantial €200-250 million. Esteemed developers such as AFI Europe, Forte Partners, Vastint, PPF Real Estate, and NEPI Rockcastle are driving this growth, indicating strong confidence in the market's future.

 

Key projects on the horizon:

 

Timpuri Noi Square (55,000 sqm)

Arc Project (30,000 sqm)

Promenada Offices (23,400 sqm)

One Technology District (20,600 sqm)

AFI Central Tower (28,000 sqm)

U-Center III (12,500 sqm)

 

These developments promise state-of-the-art facilities, catering to diverse business needs and contributing to Bucharest's evolving urban landscape.

 

Seize the opportunity in Bucharest

 

The combination of dwindling vacancy rates, sustained tenant demand in prime locations, and a robust pipeline of new, high-value developments clearly points to a healthy recovery of interest in both office development and acquisition in Bucharest. For businesses eyeing expansion or relocation, the upcoming projects offer an excellent opportunity to secure modern, strategically located office spaces in a dynamic and growing European capital.

 

Source: property-forum.eu