Real estate investors started building again office towers in Bucharest. Greek Ioannis Papalekas, AFI Europe, S Immo, CA Immo and the Belgian entrepreneur Yves Weerts prepared nearly EUR 300 million for the construction of five projects including buildings with more than 12 floors in height.

The already existing 16 office towers in Bucharest have 14 pct share in the modern A class office stock, which has reached, according to JLL, 2.67 million sqm. If the five projects, now in various development phases, would be delivered today, the share would reach more than 20 pct.

CBRE estimates that the yearend will see 16 new office project in Bucharest, as in the first half of year eight were already delivered to tenants. The rest of the buildings to be completed this year have a total area of 138,500 sqm, which will increase the total area delivered in 2016 to more than 294,000 sqm.
The record area delivered on the market in the first semester, which is 2.5 times bigger than the whole 2015 – according to JLL, led to an increase in the vacancy rate of the office building up to 13.5 pct.

Almost half of the total office spaces already delivered this year are in the northern part of Bucharest, within the largest three projects developed here: Globalworth Tower and Gara Herăstrău Office Building, developed by Globalworth, as well as the last building within Green Court Bucharest, developed by Skanska.

Of the total number of offices announced by the end of this year, 68 pct are situated in the proximity of Pipera metro station, shows CBRE data. A fifth of these spaces represent the first phase of Metroffice project, developed by Immofinanz, scheduled for delivery in the last quarter of this year.

Largest owner
Ioannis Papalekas, through its company Globalworth, is the owner of six of the tallest office buildings in Bucharest and is currently working at two new towers within Globalworth Campus near Pipera metro station. The businessman will complete in the beginning of next year the fist building with 12 floors and by the end of the first half of 2017, the second building with a similar size.
The revenues estimated by the company after this first phase of the project is nearing EUR 7 million and it is scheduled to grow up to EUR 14.7 million in the third quarter of 2018, when the works for the third building will b completed. The cost of the total project is EUR 120 million, with the first two towers representing 75 pct. of the investment.
The first building within Globalworth Campus was to become the headquarters of Telekom Romania, but the phone operator decided to extend its lease with GTC within City Gate project in Piaţa Presei Libere. Following this decision, Globalworth announced that Telekom breached its contract and that the company will act to legally recover its loss.

Papalekas’s project will have an important share of the total office area to be delivered next year.  CBRE shows that in 2017 nine office projects will be delivered with 179,000 sqm. The western city area will have the largest share, of 34 pct, where the largest project in the area is located - The Bridge, developed by Forte Partners. The two buildings within Globalworth Campus represent 31 pct. of the expected deliveries and the central area totals 26 pct of the area to be delivered in 2017.

Office blast
The office sector will reach a peak of deliveries in 2018, when the completion of 19 projects with an area of 433,000 sqm is scheduled, according to CBRE. In the spring of 2018 only, four towers will be delivered, with a height exceeding 14 floors.

The tallest of them will be Unirii View, developed by Yves Weerts on a plot of land bought eight years ago from the businessman Costel Căşuneanu. The tower is situated in the proximity of Unirii Square and will have a commercial area of 18,000 sqm and 73 m of height, divided on 18 floors. The developer estimates an average rent of EUR 15 /sqm/month, which involves annual revenue of EUR 3.2 million after the building will be fully let.
For the moment, the investor has discussions with potential tenants on 40 pct. of the area. The construction is provided by Bog Art and has a scheduled completion date for the second quarter of 2018.

In the period should be put on the market The Mark tower, situated at the crossroad of the new Uranus Blvd. with Calea Griviţei. The real estate developer S Immo, controlled by Erste Group and Vienna Insurance Group, is already working at the complex made of two office buildings with a rentable area of nearly 24,000 sq.m. One building will have 14 floors and the other six. Until now, S Immo has invested in the acquisition of the land nearly EUR 20 million and allotted another EUR 45 million for the completion of the project.

The company is considering the financing offers of some banks from Germany and Austria in order to support the development. The investor is targeting a rent of EUR 18.5 /sqm/month, which will insure annual revenue of EUR 5.6 million. The investment yield aimed by S Immo is 8.5-9.5 pct.

Another Austrian company, CA Immo, is developing Orhideea Towers, a project with a rentable area of 37,000 sqm, including two towers with 12 and 16 floors respectively. The first tenant will be the financial software developer Misys, which will occupy 8,000 sqm within the project, starting from March 2018. CA Immo is working here with a monthly average rent of EUR 15.5 /sqm/month, leading to an annual revenue of EUR 6.8 million, one the buildings will be fully let.
The complex is developed in the western part of the city, where the largest volume of new offices will be delivered in 2018, namely 41 pct of the total announced.

New zones
IF most of the new office developments are grouped in the zones Barbu Văcărescu - Dimitrie Pompeiu and Orhideea - Politehnica, there are also investors testing new spots on the Bucharest’s map. One of the developers is Vastint, the real estate division of Inter IKEA, which started last year the construction of the office and residential complex Timpuri Noi Square. 

After the completing and renting of the five office buildings within AFI Park, near the mall in Cotroceni, AFI Europe started in September the works of their second business park in Romania. AFI Tech Park va fi will include two office buildings with a height of eight floors and a tower with 14 floors, offering a total rentable area of 50,000 sq.m. The new project will host nearly 5,800 employees, according to Capital magazine’s calculations. Situated near J.W. Marriott hotel, the plot of 17 hectares where the complex will be built was bought by AFI Europe with EUR 17 million. The developer starts with a first phase, to deliver 20,000 sqm on the market in the first quarter of 2018.

All these developers are aiming IT tenants, as well as financial services companies and call center operators, but the office request lower than the offer, which already generates an increasing number of buildings with vacant spaces. (source: