2023-02-07-莱坊-European_Office_Dashboard_-_Bucharest_Q4_2022_2页_486kb

Bucharest Office Market Summary - Q4 2022

Core Content

This report provides an overview of the Bucharest office market in the fourth quarter of 2022, highlighting key metrics such as take-up, vacancy rates, and prime rents. It also touches upon broader economic indicators in Romania, including new business starts, employment expectations, and the unemployment rate, to give context to the office market dynamics.

Key Market Figures

• Take-up:

  • In Q4 2022, the take-up amounted to 87,623 sqm, representing a -1.4% year-on-year (YOY) change.
  • This is almost double the volume of Q4 2020 and similar to Q4 2021 levels.
  • The total take-up for the year 2022 reached 305,000 sqm, aligning with pre-pandemic annual figures and indicating a successful recovery of office demand.

• Vacancy Rate:

  • The vacancy rate in Q4 2022 increased to 15.0%, up from 14.0% in Q3 2022, but remained unchanged compared to Q4 2021.
  • The 5-year average vacancy rate is 11.6%, suggesting a slight increase in supply relative to demand.

• Prime Rent:

  • Prime rents rose by 5.6% year-on-year, reaching €228 per square metre per annum.
  • The report anticipates continued growth in prime rents in 2023.

Market Trends and Outlook

• The IT & Communication sector is the main driver of rental activity, accounting for 36% of total take-up.
• Despite the current tenant-friendly conditions, the lack of new building permits may result in fewer new projects being delivered in the coming years.
• This could shift the office market dynamic towards a landlord-favourable environment, potentially driving further rental growth in 2024 and beyond.

Economic Context in Romania

• New Business Starts:

  • After a slump in 2020, new business activity in Romania has recovered and reached 5-year highs in recent months.

• Employment Expectations:

  • Employment expectations in the Romanian service sector have remained fairly steady throughout 2022.
  • In Q4 2022, the rate fluctuated slightly, but the overall trend has been consistent.

• Unemployment Rate:

  • The Romanian unemployment rate increased to 5.6% in December 2022.
  • This is lower than the peak of 6.7% in June 2020 but still above pre-pandemic levels.
  • The Ukraine crisis has contributed to labour disruptions in the country.

• Services Confidence Indicator:

  • The indicator improved from 5.3 in October to a record high of 9.6 in November, then dipped slightly to 7.2 in December.
  • Services inflation may impact the outlook for 2023.

Contact Information

Local Research Contact

• Ileana Stanciu - Necea
  • Head of Research
  • Email: Ileana. Stanciu-Necea@ro.knightfrank.com
  • Phone: +40 21 380 85 85

Local Office Occupier Contact

• Horatiu Florescu
  • Chairman & CEO
  • Email: hf@knightfrank.com
  • Phone: +40 21 380 85 85

London Contact

• Colin Fitzgerald
  • Head of Occupier Strategy & Solutions EMEA
  • Email: colin.fitzgerald@knightfrank.com
  • Phone: +44 20 7861 1203

Disclaimer

• Knight Frank Research Reports are available at knightfrank.com/research.
• The report provides strategic advice, consultancy services, and forecasting to a wide range of clients, including developers, investors, and public sector entities.
• The report is for general information only and should not be relied upon for decision-making.
• Reproduction of this report is not allowed without prior written approval.