Bucharest metro traffic doubled in March. Employees are gradually returning to the office
The number of metro passengers increased by 53 percent in Q1 2022 compared with the same period of 2021, a record for the last two years being registered in March, once the pandemic related restrictions were lifted, which indicates a gradual resumption of activity in the Bucharest office buildings, according to an analysis performed by the Cushman & Wakefield Echinox real estate consultancy company based on data provided by Metrorex.
The increase in the number of passengers could be observed from early February, when restrictions were still valid and when a traffic of over 9 million people was recorded, compared with approximately 5.4 million in January 2022 and 5.7 million in February 2021. An average of 6 million pasengers / month has been recorded from March 2020, when the state of emergency was imposed, and most employees began working from home, compared with an average of over 14 million before the pandemic.
In March, when the COVID-19 restrictions were completely lifted, the metro traffic continued to increase, reaching more than 12 million passengers, double compared with the same month of last year.
Therefore, almost 26.5 million people used the metro in Q1 2022, compared with 17.3 million in the first quarter of 2021, which corresponds to an average of 227,800 passengers / day vs. 192,300 passengers / day.
A 95 percent increase in traffic was recorded on the M1 and M3 lines in March 2022 compared with the same month last year, with a corresponding figure of 91 percent in the case of the M2 line (Berceni-Pipera). The three lines in question provide connections with the main office hubs in Bucharest, such as Floreasca-Barbu Văcărescu, Piața Victoriei, Politehnica-Grozavești, which together accomodate over 150,000 employees (50 percent of the total employees who work in modern office buildings in Bucharest), the increase in traffic being a consequence of their gradual return to the office.
Mădălina Cojocaru, Partner Office Agency Cushman & Wakefield Echinox: “There is an obvious increase of the activity in office buildings since the beginning of the year, and, judging from our ongoing discussions with both tenants and landlords, more employees will return to their offices, even if they work in a hybrid system. This aspect is also proven by the metro traffic evolution, as the Bucharest Metro is widely used by the employees from modern office buildings. There is still a large number of employees who prefer working from home, but we believe that the share of those who come to the office will increase significantly by the end of the year, as we estimate an effective occupancy rate of office buildings of 60 percent compared with 20 percent at end of 2021.”
The office market in Bucharest continued on its positive momentum in terms of demand for new spaces, as the total transacted area in the first quarter saw an increase of 69 percent compared with the same period of 2021 and of 54 percent compared with the first three months of 2020, reaching a total of 80,800 sq. m.
Moreover, the net take-up (excluding renewals) evolution should be noted, as it had a consistent market share of 72 percent, significantly higher than the last 2 years’ average of 56 percent.
IT&C companies were the most active tenants, contracting 47 percent of the leased area in Q1 2022, while office projects in the Center submarket recorded the highest take-up (30 percent share). The Q1 take-up shows that there is a clear potential for the market to break the 300,000 sq. m threshold in 2022 for the first time since 2019.
In terms of new deliveries, three office projects were completed in Bucharest in the first quarter, consisting of the Sema Parc extension with the London and Oslo buildings (31,000 sq. m GLA), the first phase of @Expo (21,000 sq. m) and Tandem (21,000 sq. m), the total new supply reaching 73,000 sq. m.
The modern office stock in Bucharest was of 3.27 million sq. m (excluding owner-occupied buildings) at the end of March, while the vacancy rate increased slightly to 15.3 percent from 13.5 percent at the end of March 2021.