Colliers: New entries on the market will stimulate the office request in the next year

The first half of the year registered a total take-up of 128,500 sq. m, with approx. 55,000 sq. m net take-up, 40 pct increase compared to the similar period of 2013.

Among the main trends of the market, the study highlights the continuity of the prevalence of the IT & C companies, a significant increase of the pre-leasing transactions, as well as new companies ready to enter the market next year.

"There were significant movements on the office market since the beginning of 2014 – the request increased during the entire period, culminating with a series of contracting of important areas towards the semester’s end. After five years of precautions, the market gives obvious signs of regaining trust, with new projects at the horizon, in development, stimulated by the growth of the request for new entries, expansions and consolidations of the market.

Most building owners made consistent efforts in adapting their offer and in spite of some financial pressures, the owners proves creativity and reaction capacity in adapting to the structures demanded by the tenants, both with respect to the financial packages, as well as the delivered space", said Georgiana Andrei, manager Office and Retail Division within Colliers International.

A significant percent of the request was represented by the new brands entered on the local market (Kellog and Lenovo). In the avant-garde of the movement came the IT companies and those in the financial and insurances sector.

The transaction activity was powered by the expansions and the relocations from the non-competitive market stock, through the IT & C companies, which were the main players regarding the rented area. Moreover, the net take-up is expected to continue the ascending trend, due to the wave of expansion of the IT & C, outsourcing companies, as well as of the companies in the industry and agriculture which will bring new request in the second half of 2014.

New companies from USA and china were active in prospecting the market and most probably they will close transactions in the following 12 months, the Colliers’s study shows.

The banking segment is also susceptible to produce a new series of consolidations due to the segments of Mergers and Acquisitions, this segment will be achieving peak as some of the players will announce acquisitions.

The studied period also showed a strong recovery of the pre-contracts, which represented 32 percent of the total activity of the market, mainly through the IT & C segment, which insured most of the transactions. This was due mainly to the organic growth of the experienced companies, which increased their space requests.

The most important pre-leasing contract in the first half of 2014 was the consolidations of the operations of Vodafone in an office space of 16,000 sq. m in Bucharest One, an office building developed by Globalworth in Floreasca-Barbu Vacarescu area. The transactions as brokered by Colliers International.

Regarding the new stock, the total office stock in the end of the first half of 2014 was 1,735,000 sq. m. The office stock increased with 79,000 sq. m, contributing to the 5 pct increase of the existing stock. More than half of this volume was available for rent in the end of the semester. The only project completely pre-rented was AFI Park 2, which will be taken over by an important games producer, while the other buildings had an occupancy rate between 30 and 60 pct.

Due to the fact that the request has exceeded the offer, the vacancy rate decreased from 18 pct to 17.2 pct. The best areas from the point of view of the vacancy rate are Charles de Gaulle, Centre-West and Dimitrie Pompeiu, with vacancy rates between 5 and 8 pct.

The expectancy is that by the end of the year approx. 42,000 sq. m new office spaces to be delivered, with most of the area already rented. It is expected that the new deliveries to increase the stock in Barbu Vacarescu-Floreasca area, but also to consolidate the IT hub in Politehnica area.

The Colliers analysts expect that the level of rents will not decrease, as it has already reached the minimum level in many of the studied zones. (source: dailybusiness.ro)