Last year, the Bucharest office market recorded the lowest level of deliveries in the last two decades, with only one major project completed, and total leasing demand decreased by 18% compared to 2023 data, reveals a specialised analysis published on Thursday.
„Total leasing demand fell last year to around 340,000 square meters (…). In contrast, new demand remained at 116,000 square meters, slightly above the 2023 level. The difference between total and new demand reflects the impact of contract renewals, as large companies postponed their decisions due to uncertainties over the post-pandemic hybrid working model. Now that many of these contracts have been signed in previous years, the market is returning to a more stable pace. However, new demand, which includes only contracts adding actual occupied square footage, remains below the annual average of the past decade of 126,000 square meters, and well below 2017’s record of around 170,000 square meters. This indicates slower market growth and more cautious expansion among companies,” Victor Cosconel, partner and head of leasing Office & Industrial Agencies at Colliers, explained in a press release.
According to data centralized by the real estate consultancy company, more and more companies are encouraging their employees to return to the office, something that generates an increased interest in modern and energy-efficient spaces. Currently, in Bucharest, the buildings that make up the top 20 buildings with the largest free surfaces have a vacancy rate of around 33%, while for the remaining 190 office projects, the vacancy rate stands at 7%.
In 2024, new demand accounted for just a third of total demand, a smaller share than in previous years, when it consistently exceeded 40% and in some cases approached 50%, the consultants note.
In this context, the IT&C sector remained the main driver of leasing demand, with 37% of the total, followed by professional and business services (excluding the financial sector) – with 18%.
At the same time, Colliers consultants have observed that more and more companies are realizing that in order to encourage physical presence in the office, they need to invest in modern and comfortable spaces. As a result, tenants prefer new, energy-efficient buildings that are well connected to the transportation network and have much lower vacancy rates than the rest of the market. By contrast, older buildings, located in less accessible areas and which have not been modernized, are losing attractiveness to new developments.
Rents have largely stabilized, but in central areas, including the Central Business District (CBD), upward pressures are maintained, according to the analysis.
Forecasts for 2025 show a further fall in new demand for office space.
„Although market prospects in 2025 may appear pessimistic, Romania’s long-term advantages remain solid. The economy continues to offer one of the most competitive ratios between labour cost and labour productivity in Europe. For building owners, the market is not oversaturated, with only 3.4 million square meters of office space, equivalent to about 1,500 square meters per 1,000 inhabitants in the Bucharest metropolitan area. In fact, the market seems underdeveloped, especially as less than half of this stock has been delivered in the last decade. However, the age of a building does not guarantee energy efficiency or compliance with the latest technical standards. Much of the existing stock is outdated and may no longer meet the requirements of large international tenants. In this context, the market should remain stable and landlords’ ability to attract tenants should be protected. These dynamics will support a gradual flow of new investment as leasing demand grows in the medium term,” said Victor Cosconel.
AGERPRES
