2020 was one the poorest in the last decade for the Bucharest office market in terms of demand, reflecting uncertainties generated by the effects of the Covid-19 pandemic on the tenants’ plans. Overall, gross take-up declined by c.40% compared to 2019 to 214,000 square meters, the lowest level since 2012, while new demand stood at around 70,000 square meters, according to the 2020 annual report released by Colliers. The effects of the “pandemic year” continue to be felt in the Bucharest office sector in 2021, with a recovery likely to last several years, says Business-Review.eu.
Outside Bucharest, the gross demand in the four major office submarkets – Cluj-Napoca, Timișoara, Iași and Brașov – decreased some 19% in 2020, to 60,000 square meters, though more than half of last year’s take-up came from a single lease, a renewal of over 30,000 square meters in Iași (Amazon). Colliers consultants continue to hold a rosy long-term view for these markets, which hold a cumulated modern office stock of close to 900,000 square meters, less than one third of Bucharest’s, while these cities tend to have a similar pace for job creation in “officeable” sectors, with a prospect for acceleration in the future.
Colliers innovates and responds to current challenges and future needs in the office market with Office 360°, a complete approach of the office with all its touchpoints, carried out in a unique and highly complex process that is tailored to the very last detail to fit the companies’ needs and strategic plans. Colliers’ approach to cost control at each stage of the office transformation delivers additional savings often in excess of 10-15%, when compared to the values obtained usually from contractors, in negotiations during the tender stage.
In terms of delivery, 2020 was a robust year for the Bucharest office market, with some 156,000 square meters of new modern offices delivered, quite a bit less than the initial assessment of around 200,000 square meters at the start of the year. Also, there is a big difference compared to the 286,000 square meters seen in 2019, but it is still a fairly robust figure at around 5% of the current modern office stock in Bucharest. In 2021, about 250,000 square meters of new modern offices are set to be finalized, with pre-lease ratios at around 40% for new projects at the end of the previous year.
In the sublease market, as a positive aspect, a significant part of the upcoming tenants in subleased spaces, some of which likely were not accustomed to modern offices until now, may extend their leases with the landlord a few years. This market was fueled by the coronavirus pandemic hit, with most employees in offices starting to work from home. Also, the explosion in coronavirus cases as of autumn 2020 scrapped the plans for a come back. In general, somewhere between 10% and 20% of employees came to work, but a lot of companies had single digit percentages.
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