Office market evolution over the past 5 years in Bucharest and major regional cities

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The Romanian office market has registered a large increase in modern office stock and deliveries over the past 5 years, both in Bucharest and major regional cities, such as: Cluj-Napoca, Timisoara, Iasi and Brasov and the year 2019 is expected to bring a new record in modern office stock supplies, especially in the capital city, but not only.

Due to the economical evolution of regional cities, the real estate developers are showing an increasingly large interest for investments in modern office buildings, over 565,000 sq. m of GLA of new offices being currently under construction and expected to be completed in 2019, all across Romania.

Bucharest is expected to reach the 3 million sq. m threshold in modern office supply in 2019

According to recent market research, the modern office stock for Bucharest has reached a total of 2.9 million sq. m, 75% being represented by A-class standards office buildings, corresponding to a density of 1.590 sq. m GLA / 1000 inhabitants, value that is 50% higher than it was registered in 2015.

By the end of 2018, a new office stock of 149,600 sq. m of GLA was delivered in Bucharest, similar values with the year 2017, when the new office deliveries have reached around 138,000 sq. m of GLA.

In the first half of 2019, approximately 128,000 sq. m of modern office buildings were delivered in Bucharest, and taking into account the projects estimated to be completed until the end of this year, the volume of new deliveries could double, reaching a record value of 377,000 sq. m.

If all the projects announced to be delivered until the end of this year will keep schedule, the modern office stock in Bucharest will reach 3 million sq. m, out of which almost 1 million was built over the last 5 years (2014-2019), as it can be easily observed in the following table.

The demand for modern office buildings in Bucharest has also doubled over the last five years, even though the number of delivers is bigger year by year.

*The office deliveries values were estimations expected to be reached until the end of the mentioned year (some of the projects were delayed for the next year)

*The values for year 2019 are estimated to be achieved until the end of the year, according to latest research and forecasts.

*Data Source: www.cwechinox.com, www2.colliers.com, www.jll.com


The Regional Office Markets have registered a consistent growth over the past 5 years

The four biggest Romanian regional markets in modern offices are Cluj-Napoca, Timisoara, Iasi and Brasov, in 2019 a total of approximately 160,000 sq. m being expected to be delivered in those areas, if no delays in projects’ construction are encountered.

Over the last 5 years the stock for modern offices has doubled for major regional cities, Cluj-Napoca being at this moment the largest office market outside Bucharest, with a total stock of approximately 300,000 sq. m to be reached until the end of 2019, followed by Timisoara with around 270,000 sq. m of modern office stock, out of which over 50% was delivered over the past 5 years. Due to internal migration and a growing confidence from businesses that they can find the right employees and customers there, the regional office markets had seen important results in new office deliveries and stock growth during the 2014-2019 timeline.

*The office deliveries values were estimations expected to be reached until the end of the mentioned year (some of the projects were delayed for the next year)

*The values for year 2019 are estimated to be achieved until the end of the year, according to latest research and forecasts.

*Data Source: www.cwechinox.com, www2.colliers.com, www.jll.com

 

FORECAST: What should we expect for the next years?

  • Taking into account the evolution of Bucharest modern office market over the past 5 years we can estimate a potential of 400,000 sq. m new deliveries for the next two years (2020-2021).
  • Given the past years’ history in new office deliveries schedule it is possible that important projects expected to be delivered until the end of 2019, to be delayed for next year.
  • We can expect that the consistent growth for the Central-West area of Bucharest (the fast-growing Piata Presei and Expozitiei Boulevard area) in new modern deliveries to continue also in the next two years, along with the Floreasca - Barbu Vacarescu area and CBD.
  • The investments in new modern office spaces will increase for major regional cities in the next few years, given the big potential in new developments and the favourable evolution in office stock and deliveries for those areas, especially in Cluj-Napoca and Timisoara.
  • We expect an increase with at least 20% of total office stock in major regional cities (Timisoara, Cluj-Napoca, Iasi and Brasov) for the next year.
  • The developers could be moving their attention also towards other important Romanian cities with big developing potential, such as Sibiu and Constanta.

About Vitalis Consulting and Our Contribution to Romanian Office Market

Vitalis Consulting is an award winning Consultancy Company in the Construction and Real Estate sector, activating in Romania, Ukraine, Moldova and UK, with over 13 years of industry experience and a consistent portfolio of key projects and clients, from various areas, such as: office, residential, hotel, industrial and logistics, commercial.

During our industry experience we have become a key player in the office sector and not only, having under coordination over 30 modern office projects both in Bucharest and regional cities, some of the projects being currently under construction and some others being already delivered, enriching the total modern office stock across the country with over 500,000 sq. m.

In Bucharest, we are currently offering construction management services for 10 key modern office projects, in total built area of approximately 233,000 sq. m, some of which are estimated to be delivered until the end of 2019 and some others in 2020 and 2021.

Regarding the major regional cities, we have coordinated over the years important office projects is Iasi, Sibiu and Craiova, with a total built area of over 30,000 sq. m.

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