Office Space Bucharest
In Q1 2021, two new buildings were delivered in Bucharest, namely Campus 6.2 (19,800 sq. m GLA), part of the larger Campus 6 project developed in the Politehnica (Central – West) area of the city by Skanska, and Millo Offices (9,700 sq. m GLA) in the Central submarket. The modern office stock of Bucharest will reach the 3 million sq. m threshold (excluding owner-occupier buildings) soon, as important new deliveries are expected in the following months, while the vacancy rate increased to 13.5% overall. A significant difference remains between the vacancy rates for A and B class office buildings, with A class properties recording a level of 10.7%, compared to 22.1% in B-class buildings.
The total leasing activity in Bucharest was of 48,000 sq. m in Q1 2021, with net take-up (excluding renewals) having a robust share of 71%. Compared to Q1 2020, when COVID-19 pandemic was in early stages, demand recorded an 8.6% decrease, thus showing some initial signs of recovery. A number of large transactions are expected to be signed by the end of the year, thus we expect the yearly transactional volume to reach the 300,000 sq. m threshold.
Logistics Real Estate in Romania
The demand for logistics space remained consistent in Q1 2021, with a total leasing activity of almost 200,000 sq. m, more than double when compared to Q1 2020, as the positive trend observed during the COVID-19 pandemic went forward to 2021 as well.
Renewals represent only 16% out of the quarterly volume transacted, the activity being mainly driven by new demand.
The most significant deals signed in Q1 2021 are pre-leases, which have a market share of more than 40%. Corteva Agriscience signed the largest transaction in Q1 2021 by securing a 23,000 sq. m space in a built-to-suit project in Bucharest, while a major retailer also pre-leased a 22,000 sq. m space in Transylvania region to accommodate a new distribution center.
Bucharest attracted 59% of the transactions signed in Q1 2021, the capital city being followed by Timisoara (10% market share), Pitesti (10%) and Brasov (7%). Demand was driven by various sectors, logistics and courier companies (22% market share), along with retail and ecommerce (18%), and Automotive (14%) being the most active.
Retail Real Estate in Romania
The only retail real estate development project completed in Q1 2021 was Sepsi Value Centre, a 16,300 sq. m scheme delivered by Prime Kapital in Sfantu Gheorghe, one of the last county seats which did not previously benefit from a modern retail project. Cinemas and indoor F&B units have mostly remained closed in Q1 due to a surge of COVID-19 cases that kept a series of government restrictions in place.
However, it is expected that a large part of these restrictions will be gradually lifted in May and June, as a result of the vaccination program combined with a decrease of new cases in late April / early May.