JLL: Bucharest Office Vacancy Rate Falls To 16.1% In Q1

05.03.2011 By Florentina Dragu

Bucharest office vacancy rate declined to 16.1% in the first quarter, from around 18% a quarter earlier, real estate market researcher Jones Lang LaSalle said in a report Tuesday.

The city's office building stock stands at 1.8 million square meters, the researcher said in its quarterly Bucharest City Report.

"Bucharest remains a segmented city, with vacancy in the prime projects/locations meaningfully lower than that of the overall level. With the decrease of quality stock in central locations, we may see the return of pre-lease activity," the report noted.

It said the years 2012-2013 could bring larger projects to the market, in locations featuring easy access to Bucharest's metro network.

Some of the projects poised to complete in 2012-2013 include Hermes Business Campus, Raiffeisen Evolution/Sky Tower, AFI Business Park, Ana Tower and an office building developed by Portland Trust.

Frumoasa Center was the only office project delivered in the first quarter of 2011, the report noted. The building has a surface of 3,500 square meters and is fully occupied.

"For the rest of the year, an additional 110,000 square meters (across 8 projects in the northern part of city), is expected to be delivered. The largest projects include Platinum Convention Center, Crystal Tower, Novo Park G, Cathedral Plaza and North Point," the report showed.

Total take-up including lease renewals in Q1 2011 amounted to approximately 47,000 square meters across 45 leases, with the largest lease signed by Volksbank Romania for 8,057 square meters in Nusco Tower.

"Based on market activity and our current forecasts, we believe that takeup (excluding renewal/renegotiation contracts) in 2011 might reach a similar volume as that in 2010, around 200,000-220,000 square meters," JLL said.

As to prime headline rents, the company said prices were around EUR19 per square meter in the first quarter.

"No major fluctuations of the prime rents are expected throughout 2011," the report noted.