In 2024, office building owners will face two challenges, having negotiations with banks to refinance outstanding loans in parallel with the renegotiation of lease agreements, to extend the stay of companies in existing spaces. To their advantage is the very small stock of buildings under construction, having very little competition from developers.

“"Landlords will have to look at all ways to retain their current tenants and improve their office occupancy rate, in order to be able to have as many strengths as possible in refinancing negotiations with banks. Considering the current interest rates, higher by at least four points compared to 3-5 years ago, we expect that some owners will have to look for new partners, sell part of their portfolios in order to secure bank guarantees or or look for other partial financing solutions", says Costin Nistor, Managing Director, from Fortim Trusted Advisors, an alliance member of BNP Paribas Real Estate.

Existing buildings will be increasingly sought after by companies, in the absence of new projects. As early as 2023, the engine of the office rental market in Bucharest was the segment of contract extensions in current headquarters, a volume 131% higher than in 2022, amid a decrease in deliveries of new spaces. This trend will continue in 2024.

On the other hand, the volume of take-up transactions, moving to new spaces was 206,434 sqm, decreasing by 2% in 2023 compared to 2022. Together, new space rentals and renegotiations totaled an area of 461,021 sqm, up from the previous year.

"In terms of demand for office space, in the last five years, large companies have been looking first at office buildings under construction or in the process of delivery, in order to have the latest on the market in terms of technology, quality in construction and facilities. However, as deliveries of new spaces drop sharply, to 84%, competition for Premium tenants is reopened in the segment of second or third generation buildings. The condition is that they consider at least a refurbishment of common areas and digitalization of buildings", says Costin Nistor, Managing Director, from Fortim Trusted Advisors, an alliance member of BNP Paribas Real Estate.

More information about the office market in 2023, both in terms of rental volume, office space deliveries, and office building investments, can be found in the market report posted on website Research - Fortim Trusted Advisors