Craiova is a talent pool generator for the southern part of the country, thanks to its higher education institutes. The city is a more affordable alternative for investors to either Bucharest or Timisoara, benefiting from good transport routes from all main business areas of the country.
The demand for office space in Craiova is generated especially by financial-banking sector, BPO (Business Process Offshoring), SSC (Shared Services Center) and automotive companies. Some of the most renowned companies present in Craiova are Star Storage, Telus International, IT Six Global Services, Iquest Technologies, Comdata, E-mag Pirelli, Netdania, Keppler Rominfo.
Such tenants are looking for A and B class office schemes with a very good IT infrastructure.
The number of people employed in the IT&C companies is expected to increase in the next period; today almost 3,000 of employees are working in Craiova for this segment.
The Craiova Office Market has a relatively new history of around 5 years, with substantial development happening in the period 2010 – 2013.
The modern office stock is estimated to be 30,000 sq m of class A and B, which is equivalent to almost 1% of the Bucharest office stock – with 14% of Bucharest’s population. The gross rentable area of the biggest office building is 7,000 sq m, while the majority of the office buildings have a rentable area which varies between 1,000 – 2,000 sq m. The development and growth of tenants in Craiova is curbed by the lack of sufficient Class A and B office stock.
For this year and next year there are over 7,000 sq m under construction in the semi-central area all developed by local entrepreneurs/local private investors.
In 2013 the local authorities delivered Centrul Multifunctional, with a rentable area of 12,600 sq m and 220 parking spaces. Centrul Multifunctional covers: exhibition area indoor and outdoor, a conference hall and office space. This year 3 other buildings will be delivered in the same project with a total rentable area of 4,200 sq m and 131 parking spaces.
The overall vacancy rate for class A and B in Craiova stands at around 18%, whereas the vacancy rate for class A office buildings is estimated at 6%.
Prime office asking rents in Craiova vary from 10 to 12 EUR/sq m/month for Grade A and stand between 6 to 10 EUR/sq m/month for Grade B office buildings.
2015 started off with more intense feedback from international companies looking to expand their current operations in Craiova, as well as new companies looking at opening SSC or BPO divisions. Qualified, professional and cheap labour, attractive state incentives for IT segment and real-estate costs are motivating business growth in this area and increasing investors’ interest. (source: CBRE)
