DTZ Echinox: New supply 10 times lower in H1 2011 puts pressure on prime office rents in Bucharest (RO)

The first half of the year 2011 brought a 90% drop in the new office supply for Bucharest, according to DTZ Echinox analysis.

The office space delivered in the first six months of the current year totals 12,950 m², compared to 125,813 m² in the same interval of the previous year.

The decrease in available office stock is related to the intensification of the leasing activity on this segment, as the net take-up marks a growth of approximately 30%, according to DTZ estimations for the first half of this year. The volume of net take-up in H1 2010 was of 82,500 m², while for the same interval of the current year, we estimate a value of at least 105,000 m².

During the first six months of this year, DTZ recorded a net take-up of about 18,500 m² and a gross take-up of 19,400 m² respectively.

Among the main transactions mediated by the company there is the leasing of 10,000 m² by UniCredit, in Novo Park, one of the major deals of the year on the office market. UniCredit leased all four floors of building 'G' in Novo Park in order to accommodate the back-office activities of the group. The DTZ office team represented numerous companies from the IT, pharma and energy industry in the process of relocation or extension of their headquarters in Romania and it is an exclusive leasing agent for the office spaces available in America House.

Taking into consideration the constant rhythm of leasings and announced new office supply of only 80,000 m² until the end of the year, approximately 60% of the delivered surface in H2 2010, we expect the Bucharest office market to follow the trend of the CEE region, and experience a raise in rents, which could surpass €18.5-€19.5/m²/month for prime locations by the end of 2011, continuing with a slight increase in 2012-2013.

Source: DTZ Echinox

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