Bucharest’s North, the star zone before the crises for the office developers has also lost its charm for the developers. The market figures confirm: the vacancy rate of the buildings in Baneasa area is 36.25% and in Pipera-North is 35.4%, according to Jones Lang LaSalle (JLL)’s data.
Although in recent years the area Floreasca-Barbu Văcărescu has attracted more developers such as Nusco, Portland Trust, Skanska, Atenor, Reiffeisen Evolution and recently Ioannis Papalekas, another zone in Bucharest has potential for new office buildings developments: the Central-Western Bucharest, where the office stock is only of 70,000 sq. m and the vacancy rate is 5.6%, shows JLL data.
As a comparison, in Floreasca-Barbu Văcărescu area the office stock is 267,000 sq. m and the vacancy rate is 19.9%.
The new constructions in the Central-Western zone include the AFI Park buildings, in the vicinity of the commercial centre AFI Palace Cotroceni and Green Gate.
There are also other developers with lands in the area, waiting for the permits in order to start the investments. This is the case of Immofinanz, the owner of Ventilatorul platform, on 5.3 ha, where it is planned the development of several residential buildings as well as of two office buildings.
In the same area, in the proximity of the metro station Politehnică, also lies the land of the former Pumac factory, owned by the businessman Ion Rădulea, the owner of Sema Parc, which intends to develop three office towers of 30 floors each. The investment was postponed due to financial crises.
Moreover, two plots of land are for sale in the area: 4.5 ha from the former UMEB, owned by Broadhurst and put on sale for EUR 22.5 million and 3.5 ha from Grozavesti Park, owned by a company controlled by the businessman Beny Steinmetz.
„The land market boom was felt in 2005-2006. One year and a half later, it was also felt on the other markets. And from our experience, in mid-2007, we were the first affected by the crises. In 2008 there were almost no transactions on the land market", has declared Atilla Peli, the head of the lands department within JLL.
„Now is the moment to think about what would happen in two-three years. We are slowly getting out of a black zone, the banks and the developers feel it. And there are two big questions: what to buy and where. The first segment starting to grow, also registering request, was the office segment, as it is less risky, contracts are signed on long terms and the exits are quick. The lands demand for offices will register a slight growth, then the demand will also be felt on the retail segment, then on the residential", Peli added.
The best zones for office buildings investments are nearing the five zones identified by JLL as “hot”: Piaţa Victoriei – Centre-North, Floreasca – Barbu Văcărescu, Dimitrie Pompeiu and Centre-West.
"Floreasca tends to become saturate. Very many offices are delivered and the vacancy rate is growing which is not a good sign", Atilla Peli also said.
The office area delivered last year in Bucharest was 119,000 sq. m, 2.5 times bigger than in 2012, and the office stock is estimated to more than 2 million sq. m, the most recent report of Jones Lang LaSalle showed.
In Bucharest, the average vacancy rate is 14.4%. The rents remained unchanged in the last quarter of 2013, at EUR 18.5/sq. m/month, and the financial incentives continued to be consistent, the owners offering free rent months as well as contributions for the fit-out of the space. The new office stock scheduled to be delivered this year is 120,000-140,000 sq. m, but due to the large volume, some projects could postpone the opening for 2015. (source: economica.net)