Although the pace of new deliveries has slowed recently, sustainability remains a priority for developers. Approximately 93% of new office buildings in Bucharest, built in the last 7 years, and 70% of older buildings, over 15 years old, hold green certifications, reflecting a strong commitment to sustainability and energy efficiency. For comparison, only Warsaw surpasses Bucharest in terms of green certifications, with 98% of new buildings certified. The Bucharest office market ended 2024 with a total leasing demand of almost 339,000 square meters, registering a 20% decrease compared to the historical high in 2023, but remaining above the average of the last five years.
“The office markets in CEE are undergoing a transformation process, influenced by the aging building stock and the increasingly stringent decarbonization requirements imposed by European regulations and global trends. Romania is a major player in the region and, although well positioned in adopting sustainability standards, has a significant stock of old buildings, comparable to that of Bratislava and Budapest. Modernizing these buildings represents a major investment opportunity, which can strengthen the market’s competitiveness in the long term and attract developers interested in meeting current sustainability requirements. The performance of green certifications increases the attractiveness of the local market for investors and contributes to the creation of a competitive business environment,” explains Victor Coșconel, Partner | Head of Leasing | Office & Industrial Agencies at Colliers.
Moreover, efficient buildings, located in good areas, are more sought after by tenants, according to rental data, says the Colliers consultant. The vacancy rate for relatively new buildings in Bucharest, where the percentage of green certifications is very high, is in the single digits, while for old buildings - often located in less central positions and with reduced energy efficiency - the vacancy rate is approaching 20%. On the other hand, data for 2024 shows a slowdown in the market from the perspective of total rental demand, but, in terms of new demand, last year it reached 116,000 square meters, a level similar to that of 2023.
With a single delivery in 2024 - AFI Loft, with approximately 16,000 square meters -, the modern office stock in Bucharest reached approximately 3.4 million square meters, being represented by 31% of buildings built in the last 7 years, 27% with an age of 8-10 years and 42% delivered more than 15 years ago, according to the latest Colliers report. The vacancy rate for modern offices built in the last 14 years was between 12-14% in 2024, compared to almost 16% for buildings delivered before 2010. Colliers consultants note that the demand for new, certified and energy-efficient spaces remains high in Romania, as in other mature markets in the region. In Bucharest, new buildings (0-7 years old) have a much lower vacancy rate of only 5% and attract higher rents, which shows the preference of tenants for operational savings and modern amenities.
“Mature markets, such as Bucharest and Prague, are experiencing a slower pace of new developments - below 5% of the existing stock, unlike cities such as Vilnius and Tirana, where 45% and 84% of the total stock are under construction, respectively. Romania, however, is focusing on modernizing existing buildings, maintaining a balance in the market and avoiding the risks of oversupply. Green certifications, along with the balance between supply and demand, strengthen Bucharest's position as a preferred destination for investors and tenants who prioritize sustainability. And this model of adaptation and sustainable development underlines Romania's maturity in the regional office market”, states Victor Coșconel.
The limited delivery schedule in 2024 and 2025, adds the Colliers director, could lead to an increase in rents for class A offices in well-positioned locations, a trend amplified by the growing demand for spaces that comply with sustainability standards. In Bucharest, office spaces in buildings up to 7 years old are rented on average at around 16.5 euros per square meter, compared to 13 euros per square meter in buildings older than 15 years. In the context where Bucharest does not have an oversupply of offices per capita, companies' efforts to encourage employees to return to the office more frequently could generate an increase in demand in the medium term. Colliers consultants point out that the age and quality of buildings are not the only factors that determine the level of rent, as location is often the determining criterion that determines tenants to choose certain areas. Thus, the rent for modern office buildings in Piața Victoriei reaches 22 euros per square meter in many cases and jumps pointwise from this level for certain buildings.
Regionally, tenants are also willing to pay higher rents for new buildings, due to lower operating costs and modern amenities, and this is visible in markets such as Prague (17.7 euros/square meter), Warsaw (21.0 euros/square meter) or Athens (28.5 euros/square meter). The preference for office space in new buildings (0-7 years) is also reflected in higher occupancy rates compared to older buildings.
Colliers (NASDAQ, TSX: CIGI) is one of the global leaders in real estate advisory and investment management services. With operations in 70 countries, its 22,000 professionals work together to provide expert advice to clients. For almost 30 years, our experienced management team has delivered annual investment returns of approximately 20% to shareholders. With annual revenues of $4.5 billion and assets under management of $99 billion, Colliers maximizes the potential of real estate properties and assets and accelerates the success of clients, investors and employees.
