The largest supply of modern office space in 15 CEE countries was recorded in Warsaw, Budapest and in Prague, while the biggest increase of new supply in H1 2019 was noted in Bucharest (185,000 sqm), according to the newest report by real estate consultancy company, Colliers International. On a per capita basis, Bucharest’s office surface is around one third below Warsaw’s, which is also significantly below other Western European markets, so there might be room to grow.
The Colliers report, launched at EXPO Real 2019, analyzes office markets in 15 CEE countries: Albania, Belarus, Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Montenegro, Poland, Romania, Serbia, Slovakia and Ukraine.
Most modern office projects are located in the capitals of the countries, although the office market is also developing in regional cities. In the first half of 2019 in all capitals of the 15 analyzed countries tenants leased over 1.5 million sqm of modern office space. More and more office buildings boast of prestigious certificates, modern technological and ecological solutions and innovatively designed space. The most active tenant sectors are IT, professional services, banking and BPO/SSC.
Bucharest has turned into one of the most dynamic economies in the CEE region. This is closely related to the labor force, which offers a nice mix of good language skills as well as much lower costs than in Western Europe. Romania and Bucharest do have a couple of things that set it apart from other peers and even other more developed markets in Europe: a very strong IT&C community.
“While vacancy is expected to be on the rise over the next couple of years, there are some silver linings. Bucharest still has quite a lot of stock built about a decade ago and part of it would not meet today’s qualitative/technical standards. Vacancy tends to vary quite a lot from submarket to submarket and even between projects in the same submarket. Furthermore, on a relative (per capita) basis, Bucharest’s office surface is still around one third below Warsaw’s, which is also significantly below other Western European markets, so there might still be quite a lot of room to grow”, said Sebastian Dragomir, Director Office Advisory at Colliers International Romania.