The company estimated that in 2013 the average Bucharest office vacancy rate is 13.5%. The available figures on the market show that the modern office stock in Bucharest is 2.04 million sq. m.
"New developments in Warsaw and Prague should attract more tenants, but here, as on other markets too, such as Bucharest and Budapest, the tenants will continue to be favoured. The owners will still offer attractive incentives, including zero rent periods or financial contributions to fit-out the premises, having the purpose of attracting and keeping the tenants in the buildings", the research shows.
Compared to other markets in CEE, Bucharest looks better considering the vacant office area in 2013 only compared to Budapest – 17.9% and Prague -14.2%. The other markets included in the study Istanbul (6.3%), Moscow (13.3%) and Warsaw (1.5%) have a smaller vacancy rate compared to Bucharest.
In two years, according to Cushman&Wakefield data, Bucharest (14%), Budapest (15.8%) and Prague (16.2%) will register the highest vacancy rates on the CEE office market.
Regarding the new deliveries, the total are of completed projects in Bucharest reaches this year 123,000 sq. m, according to the real estate consultant, and it is expected to grow to 147,000 sq. m in 2014. The total area of the office projects to be delivered in 2015 is estimated at 100,000 sq. m.
Compared to Bucharest market, in Prague the total delivered office area this year is 88,000 sq. m, with additional 170,000 sq. m to be delivered in 2014 and 150,000 sq. m in 2015. Istanbul (300,000 sq. m in 2013, 937,000 sq. m in 2014 and 640,000 in 2015), Moscow (1.169 million sq. m, 900,000 sq. m and 728,000 sq. m respectively) and Warsaw (321,000 sq. m, 224,000 sq. m and 239,000 sq. m) are by far the favourite markets in CEE for the office developers in the next two years.
"As domestic conditions recover and unemployment continues to decline, office market fundamentals will also improve. However, this is from a low base and despite less speculative construction and more robust demand, rental rises are unlikely before late 2015”, Cushman&Wakefield’s report estimates
Currently the average rent in Bucharest is estimated to EUR 19/ sq. m /month, a level to maintain in 2014, while in 2015 will increase to EUR 19.5/ sq. m / month, according to the study.
Bucharest rents are the lowest in CEE countries including in the study, the offices being rented in Budapest for an average of EUR 21 /sq. m / month, in Prague for EUR 20.5/sq. m/ month, in Warsaw for EUR 25.5 / sq. m /month, in Istanbul for 45 dollars/sq. m / month and in Moscow for 1.150 dollars/ sq. m/ year.
There are no anticipations of important rent modifications for the other analyzed markets too by 2015. In these conditions, Bucharest will maintain among the cheapest capital cities in CEE. (source: economica.net)