The real estate market in Romania registered last year the fastest growth in the last 5-7 years. Developers have intensified their activity in all sectors of real estate, taking advantage of the good market situation and growing demand.
New supply reached 5-year record levels, registering growth of 11% for the residential market, + 39% for shopping centres new supply, while the area of offices completed in Bucharest was 4 times larger than in 2015.
Office market saw record-high levels of demand in 2016, coupled with an upward evolution in pipeline activity across the main markets. With a generally stable evolution of vacancies, the rental levels have maintained unchanged.
New buildings with a total of 265,000 sq m GLA were completed last year in Bucharest, a 7-year highest level. Northern Bucharest concentrated 65% of new deliveries, followed by the west (21%) and the central area (14%).
Almost half of the newsupply, representing 121,000 sqmGLA,was delivered in Barbu Vacarescu. This area has started to develop at a high pace after 2009 and has transformed last year into the largest office area in Bucharest with 371,500 sqmGLA.
Bucharest’s modern office stock reached 2.44 million sq m GLA at year-end, out of which 75% is A-class stock. The current office density of 1,295 sq m / 1,000 inhabitants remains still far from other Central Europe’s Capitals such as Warsaw, Prague and Budapest (2,000-3,000 sqm/ 1,000 pop.).
Demand jumped to a new record last year, both in Bucharest and outside the Capital, fueled by the economic growth, expansion of IT&C, BPO and shared service centres, coupled with new entries and consolidation deals.
Bucharest’s take-up increased by 56% y/y, to a record-high of 390,000 sqmGLA of major leases. New demand represented 37% of the annual volume, followed by relocations (33%) and renewals/renegotiations (30%).
There were recorded 33% new leases, 30% renewals/ renegotiations, 26% pre-leases and 11% expansions, at relatively similar distribution as in 2015.
The largest leases signed last year in Bucharestwere Renault-Dacia (47,500 sqmBTS pre-lease) and BCR (17,300 sqmpre-lease at The Bridge). There were recorded 5 leases in between 10,000-15,000 sq m, 12 leases having areas of 5,000-10,000 sqmand 21 leases of 3,000-5,000 sq m.
Full report: Romania Real Estate Market Report, March 2017