Iulius Mall: 2017 a good year both for office premises delivery and office demand from companies planning to expand

Compared to the other countries in the region, Romania still has some catching up to do in terms of high quality office spaces that measure up to European standards, Laurentiu Manea, Manager Office Buildings Openville told The Diplomat-Bucharest.

2018-04-03 10:53:16

"The office stock available on the Romanian marketplace is lower than in the other countries in the region in terms of the number of square meters of class A offices per thousand inhabitants," said Manea.

"We are certainly seeing an upward trend, with continued development prospects and – most importantly – a stable market with a healthy growth rate. The Romanian marketplace is among the most highly competitive in the region, appealing to major companies by means of the specialized and affordable workforce, as well as the overall lower prices compared to other Eastern European countries."

According to Manea, 2017 was a good year both in terms of office premises delivery and the office demand from companies that plan to expand, particularly IT and BPO/SSC companies: "This trend can also be noticed in secondary cities such as Timisoara, Iasi, and Cluj-Napoca, where we have ten office buildings currently in operation. For example, last year our company delivered 31,000 sqm of class A office premises on the local marketplace in Timisoara, comprised of two buildings erected near Iulius Mall, as part of the Openville mixed-use project. Both buildings have occupancy rates close to 100 per cent, the respective tenants operating in the IT and automotive industries. The IT industry was also the main growth catalyst for other business sectors, such as the residential real estate, automobile and services markets. This market growth resulted from the increasing number of employees and their incomes."

Manea said they are attuned to international green building initiatives and they are committed to getting in line with international sustainability standards: "We develop "green buildings", and all our projects are either certified or pending certification. We received the most recent certification last year, namely LEED® Gold for the United Business Centre Tower building in Cluj-Napoca. Also, all the office buildings in the Openville Timisoara project are designed in accordance with LEED standards and benefit from the implementation of sustainable operation policies. Therefore "green buildings" are the future. These developments are no longer niche ones, but a necessity, and projects combining modern architecture with "green" principles will be increasingly delivered on the market.

There is clear potential and the focus towards this segment is nothing but welcome, translating into direct benefits for developers and tenants by means of cost-effective utilities and overall comfort, and in a wider sense for the community."

Referring back to the cities outside of Bucharest where they operate, Manea said that these cities (Iasi, Cluj, Timisoara) will continue to be appealing, owing to the labour market opportunities, the available talent pool, the base of specialists/senior employees with expertise in international projects, recognized university systems, language skills, living, culture and education conditions, as well as the effect of internal and external migration, as they are destinations where the workforce in other counties chose to work and live.

"Moreover, the costs related to the workforce and the leased premises are lower. In 2018, corporations certainly have a continued interest in regional cities in Romania. Now referring exclusively to Timisoara, namely the Openville mixed-use project, where we are developing the third office building (19,000 sqm) pending delivery this autumn and where we are also preparing to start the works for the fourth building (50,000 sqm), we can say that the major companies present in the city have expansion plans projected over the following years.

"Timisoara is an attractive city owing to numerous factors, but first and foremost is the pool of IT and automotive specialists and their solid research and development skills. There is demand from companies that intend either to open operations in Timisoara or expand here, from investors who request vast, high quality, central spaces, particularly those located in the proximity of a variety of services that are relevant for their employees. Moreover, there are global companies that are not present in Romania but which have plans to open operations in this city. This is natural considering the immense potential of the most important city in the west of Romania. Timisoara is the most developed city after the Capital; nevertheless, the city does not have a stock of office spaces measuring up to European standards, nor does it have a business district measuring up to its own potential. Openville will provide the solution to fill the gap by means of its 130,000 sqm of office spaces."

According to Manea, office market challenges can arise from speculative developments, when construction is undertaken without being based on an actual demand, which in turn can result in high vacancy rates: "Challenges may also arise from the developers' ignorance of the current requirements mandated by companies that lease office spaces. Customizing the premises to meet tenants' requirements and preferences – as early as the building design phase – is of paramount importance. In addition to central locations, vast spaces and modern facilities, companies nowadays also wish to provide their employees with a certain balance between comfort during office hours and the services they need both during and after work. It is for this reason that mixed-use projects, which integrate office, retail and leisure functions, are an effective development model for the office market and catch the tenants' attention. From this perspective, our office buildings are the only ones in Timisoara that are integrated in a mixed-use project and located in the proximity of Iulius Mall and dozens of useful services ranging from food court area and restaurants for lunch breaks, fitness centre, stores and multiplex cinema, all the way to kindergarten, medical practices, relaxation and socializing areas, etc."