JLL: Vacancy rate on the Bucharest office market dropped last year to a historic minimum

The vacancy rate on the Bucharest office market dropped last year to a historic minimum of about 6.6%, compared with 9.2% at the end of 2017. The decrease occurred on the background of a lower development activity compared to the demand of office space, according to JLL specialists.

Thus, last year, developers completed new office projects totaling 145,000 square meters, as the surface leased through real estate consultants was 335,000 square meters, of which 45% (150,000 square meters) represents new demand (pre-leases, new contracts, extensions of existing surfaces and relocations from other buildings than Class A and B buildings).

JLL was involved in the largest office space leased in 2018, being the market leader at national level, with 23% of the total traded, as well as Bucharest, with almost 25%, among the most important transactions being Microsoft (24,200 square meters) or Thales (5,300 square meters).

“Even though there are significant differences between the 12 office sub-markets in Bucharest in terms of office space available, the vacancy rate continued to decline in 2018 to a historic minimum, amid a relatively modest development of activity in 2017 and 2018. Net demand remained at comparable levels over the past two years, around 150,000 square meters, absorbing the new offer”, said Marius Şcuta, Head of Office of the Agency and Tenant Representation JLL Romania.

The prime rent in Bucharest continued for five years in a row at the level of 18.5 euro/sqm /month, with changes being recorded at the level of the incentives packages offered by the landlords. In 2019, if all the announced projects are completed, the stock will grow by about 300,000 square meters, of which 50% is already pre-leased, according to JLL.