The Bucharest Office Market After a Decade of Transformations

The first five years, 2015-2019, were defined by record transactions and large-scale projects, with a constant annual growth of relocation transactions in the Bucharest office market.

2019 marked a historic peak, with 309,200 sq m of leased offices, including (Pre) Leases and Expansions, but excluding Renewal and Renegotiation transactions.

In 2020, the market experienced a turning point—a true “from hero to zero” moment. Not quite “zero”, but a substantial reduction: only 107,400 sq m transacted, 65% less than the previous year. Probably the sharpest slowdown in the office space market in the capital.

The following years, 2021-2024, were years of stabilization of relocation transactions in Bucharest, remaining around 200,000 sqm (+/- 2%), in an environment marked by unexpected challenges: the rise of hybrid labor, the war in Ukraine, rising construction and energy costs, inflation and the emergence of artificial intelligence systems.

The average annual transaction volume in the last four years recorded a 35% decrease compared to the pre-pandemic year (2019) and a 20% reduction compared to the average transactions in the period 2015-2019.

Taking into account the previously mentioned adverse factors and the increasing international geopolitical uncertainty, we consider this market contraction to be moderate, demonstrating the resilience of the office rental sector.

Regarding the volume of Renewal and Renegotiation transactions, if in the five pre-pandemic years the average level was around 79,000 sqm, the following period brought a gradual increase, reaching, on average, an 80% advance.

2023 stood out as an atypical year, reaching a record volume of 240,700 sqm of renewal and renegotiation transactions—three times more than the average level in previous years. This exceptional growth was due, in part, to the decision of some companies to initiate renewal negotiations in advance, before the expiration of contracts, in order to optimize the occupied area and the rent level, thus ensuring a new, more financially efficient contractual cycle.

How did office transactions evolve in 2024?

2024 was a year of consolidation of efforts to stabilize the market. In the Capital, the volume of (Pre) Leases and Expansions reached 187,000 sqm, only 6% below the average of the last three years.

In a context marked not only by three domestic elections, but also by significant international elections, this evolution can be considered quite favorable.

Renewals and Renegotiations remain at a relatively high level, exceeding 157,000 sqm. Although they register a significant decrease compared to 2023, the volume traded is almost double compared to the average of the pre-pandemic period.

Most (Pre) Lease and Expansion transactions were recorded in the 1,000-3,000 sqm space segment, where 74,400 sqm were traded, up 32% compared to 2023, but also compared to the average of the last three years.

This increase was not only reflected in the volume traded, but also in the number of transactions, which rose from 38 in 2023 to 46 in 2024. It is a positive signal for the market, indicating an intensification of relocations among medium-sized companies, of 1,000-3,000 sqm and, implicitly, a higher level of trust and predictability on their part.

In second place, in terms of volume of spaces traded by area, was the segment of spaces up to 1,000 sqm, totaling approximately 55,300 sqm. This recorded a decrease of 5% compared to 2023 and of 13% compared to the average of the last three years.

Regarding the areas of activity with the greatest dynamism in 2024, companies in IT&C and BPO maintained their dominant position. However, their share decreased significantly, from 45% in 2023 to 31% in 2024.

In second place are companies in the services and consumer goods sector, with a share of 12%, slightly increasing compared to the previous year, closely followed by professional services, which represented 11% of the traded volume.

An important trend observed in the last three years is the decline in transactions carried out by companies in the medical and pharmaceutical sectors, whose share decreased from 25% in 2021 to only 7-9% in the following years.

New project deliveries and prospects for 2025-2027

However, the challenges of the office market are not over. If 2024 marked a historical minimum in the deliveries of new spaces in the last two decades, 2025 could drop even lower. In the prime space segment, only one project has been announced, ONE Gallery, the restoration of the Ford Hall in Floreasca, which will add, in addition to retail spaces, approximately 7,000 sqm of offices. In addition, three boutique office buildings, with areas of up to 5,000 sqm, could be completed this year, half of the spaces already being pre-leased. However, the first signs of recovery have already appeared in 2024, with major projects planned for 2026-2027. Specifically, seven class A office buildings, totaling over 210,000 sq m, are announced for delivery, 40% of which are located in the Center-North area.

In 2024, rents for prime projects, located in well-positioned areas with low vacancy rates, continued to increase slightly for the second consecutive year.

However, there were buildings and areas where rents stagnated or even decreased. This phenomenon occurs especially in projects with large vacant areas, in areas with high supply or in locations with poor access to transportation.

These trends reflect a clear preference of companies for high-quality, energy-efficient and certified “green buildings”. In contrast, older buildings are under pressure to invest in modernization or to sell when owners cannot support renovations and functional reconfigurations. For these buildings, alternative solutions include attracting niche tenants—schools, clinics—or even repurposing into residential, where the location and structure of the building allow for this transformation.

For projects that will be delivered in the period 2026-2027, headline rents are at a higher level, ranging between 18-20 euros/sqm, depending on the location. The increase in these rents is determined by several factors, including: the increase in construction costs (materials, labor, energy) and the increase in the cost of financing due to higher interest rates, which put pressure on investment budgets.

In addition, increasingly strict requirements regarding sustainability and quality standards, along with the limited supply of new projects, caused by the low number of permits, contribute to this upward trend.

Of course, the office space market, like other segments of the economy, is influenced by domestic and international economic developments. Factors such as the presidential elections in May 2025 and the postponed economic reforms will play an important role in the direction of the market. In the absence of major turbulence, there are favorable prospects for a stabilization and relaunch of market growth, including in the pre-leases segment. As the current office stock is absorbed in the next 12-18 months and new projects materialize, the market could enter a new expansion cycle.