People of Cushman & Wakefield Echinox
Throughout H1 2016 Bucharest’s modern office stock increased by 6%. At the end of June, existing class A and B office space amounts 2.39 million sq. m. Overall, 6 office buildings were delivered, having a total GLA of 135,000 sq. m. Given that new office deliveries last year amounted 85,000 sq. m, in H1 2016 new supply was higher by 60%.
For the second half of 2016, another 185,000 sq. m of office space are expected to be completed. Compared with H1 2016, when most of the new supply was delivered in Barbu Vacarescu – Floreasca (Central North submarket), in H2 2016 the highest level of new supply will be recorded in Pipera South – 25%.
In Bucharest gross take-up recorded throughout H1 2016 exceeds 190,000 sq. m. Net take-up represents more than 68%, with 130,000 sq. m transacted and is divided between relocations within A and B class – 25% and new demand – 75%. Compared to the same period last year, net take-up is higher by 16%. Moreover, new demand (relocations from old stock, expansions and new operations) has increased by 50% y-o-y. The largest contribution to the level of new demand was represented by expansions and new operations (new companies entering the market and existing occupiers opening new businesses).
More than 60,000 sq. m were the subject of renegotiation and renewal transactions in H1 2016. Compared with the same period in 2014 and 2015, this type of leasing activity has increased. Overall, the decision to stay put has been preferred by office occupiers that were entirely satisfied by location and financial terms. The vast majority of renegotiation and renewal transactions have been concluded in areas that have attracted occupiers’ interest in the last two years, areas such as Pipera South, West, CBD or Central North.
