In 2022 the Romanian office rental market registered a growth of 5% compared to 2021 and 20 % compared to 2020. This trend is expected to continue in 2023. However, this year the demand for office space is greater than the supply with more than 112,000 sqm of space available for rent in new office buildings, according to the Market Outlook 2023 report.
The modern stock of office spaces will reach 3.4 million sqm in Bucharest by the end of the year, with five office buildings under construction. According to the analyses of CBRE Romania, transactions in this segment will maintain the growth trend, even in a context where some multinationals have still not made a firm decision on how they will continue to use the office spaces. Based on the report Nine O’Clock Romania defined 3 trends that will dominate the market in 2023.
Office leasing will continue to grow
After the intense activity in the Office segment in 2022, when spaces were rented in all areas of Bucharest – Center is still attracting over 70% of the total rental activity -, the office space rental market is drawing near the pre-pandemic level, a growth trend that will remain in 2023. Another positive sign is the constant increase of approximately 7% year-on-year in new rentals and expansions, reaching a percentage of 28% in 2022, which represents the peak of the last 5 years for this type of transaction.
Less space, more demand
Compared to the office space rental in 2022, 60% of this activity consists of new transactions, excluding renegotiation and contract extension transactions, representing an increase of 5% compared to 2021 and 20% compared to 2020. Meanwhile, the number of square meters to be delivered in 2023 is much lower than the Bucharest standard, with an expected delivery of 5 new office buildings, totalling a surface area of approximately 112,500 sqm, much lower than the traditional annual standard from Bucharest between 200,000 sqm (2020) and 300,000 sqm (2022).
Working in offices becoming more attractive
Productivity is higher and results are achieved more easily when employees work together or talk face-to-face in the office. That is why office work increases in preference versus remote work when a hybrid system is implemented.
“The office space rental market is growing and experiencing an exceptional period with unprecedented beneficial changes. Office buildings are no longer about class A or B, but about office spaces in green buildings, in projects that support the appropriate human interactions and about efficient ways to build communities around facilities that one cannot find elsewhere. As more and more companies look for spaces that meet ESG criteria and fulfil people’s desires, workspaces underwent a transformation, with facilities and design concepts for employees, with a focus on developing communities, which makes office work grow in people’s preferences”- says Tudor Ionescu, Head al A&T Services Office at CBRE Romania.
According to the Report, 74% of office buildings in Bucharest have green certificates and meet ESG conditions, a trend that continues to grow, as one of the main criteria in the companies’ choice of office space.