Skanska inaugurates the first rooftop runway in Romania. The runway is 280 meters long and it’s located on the roof of the Campus 6.2 and 6.3 buildings in Bucharest.
The two A-class office buildings in Campus 6 have 11 stories, the track being located on top of them, at a height of about 42 meters.
The final layer of the track is made out of tartan certified by the International Association of Athletics Federations for use in all international athletic competitions.
However, the rooftop runway on Campus 6 in Bucharest is not the first of its kind built by Skanska.
Among the capitals in the Central and Eastern European region where Skanska has integrated this type of employee facility are Budapest (H2Office building) and Prague, where the 150-meter runway on the roof of the building Visionary was launched in 2018.
BCR has concluded the ownership transfer of the landmark Bucharest Financial Plaza, the former headquarters of the company from Calea Victoriei to Immofinanz.
Immofinanz plans a renovation of the property into a high-quality and green myhive building with a sustainability certification of at least Gold.
Located next to the Old Town, Bucharest Financial Plaza is a landmark with 26.300 sqm GLA.
The property was completed in 1998, being the most imposing building in the city at that time, and was refurbished in 2012.
The building can be easily split between its two sections, Tower (17th floors) and Podium (6th Floors), and it has the largest natural illuminated atrium in the city.
BCR moved its headquarters in 2020, in a 14.400sqm space, in Business Garden Bucharest, a LEED Platinum certified office complex.
Romania’s commercial real estate investment volume ended 2020 with a volume of €588.5 million, half versus 2019 but similar with 2015.
Although 68% of the total investment volume was transacted during the first six months, the second half of the year witnessed the largest transaction of 2020, marking the entrance on the Romanian market of a new Chinese investor.
Fosun acquired Floreasca Park office building in Bucharest for €101.5 million thus reconfirming the attractiveness of the Bucharest office investment market.
Also in 2020, the biggest investment deal negotiated in 2019 was finalised when AFI Europe completed the transaction process with NEPI Rockcastle for three office buildings in Bucharest (Floreasca Business Park, The Lakeview, and Aviatorilor 8) and one in Timisoara (City Business Park) for an estimated total volume of €308 million.
2020 ended auspiciously for the office investment market as S IMMO, advised by CBRE, agreed the transactional terms for a forward purchase of the Campus 6.2 and 6.3 office buildings, for approximately €97 million.
More than a third (36.5%) of employees who responded to a recent survey initiated by Genesis Property believe that the entire team within the company they are working for will return to the office this year.
Most say that offices have become an important part of their job in the context of Covid-19 and over 57% will evaluate this aspect more closely in the future, when they will seek a new job.
While proximity of the office to their home remains an important factor for most employees (65%), the pandemic year increased the importance of health measures taken in the building (for 51% of respondents) and of the workspace structure, with greater emphasis on delimited offices that facilitate distancing (for 49.3% of respondents).
At the same time, 41% say that, from now on, they will carefully evaluate what technologies are available in the workplace to ensure better protection for their health and for the health of their colleagues.
The post-pandemic office: safer and more creative
Looking ahead, in addition to the health measures that more than 60% of respondents to Genesis Property’s survey consider necessary in office buildings today and in the future, many employees believe there is also room for further changes.
52% believe that, in the future, offices should provide employees an integrated work, lifestyle, entertainment, and socializing experience.
Another 45% consider that the current situation represents an opportunity for the integration of technologies based on artificial intelligence which can eliminate repetitive and routine activities whilst redefining how they will work in the future.
Lastly, 40% want to have the opportunity to work in spaces that give them a better environment to manifest their creativity.
The occupancy costs of office spaces represent, on average, between 3 and 4% of the turnover of services companies in Bucharest, and they may fall even below 2%, in some cases, according to an Cushman & Wakefield Echinox analysis.
The analysis takes into account the results from 2019 achieved by companies in various fields, such as software development, advertising agencies, IT consulting, engineering and technical consulting, business support services, accounting and financial audit, architecture or real estate agencies.
The analyzed companies, whose revenues are mainly generated from work performed in office spaces, achieved in 2019 a total turnover of 8 billion euros, with about 112,000 employees and an average productivity of 70,000 euros per employee.
The occupancy cost of the office spaces for these companies, consisting of rent, service and utilities tax, was estimated at 255 million euros per year, the equivalent of about 190 euros / employee / month.
In the context of the Covid-19 pandemic, which imposed a series of social distancing rules to limit the spread of the virus, companies implemented procedures for working from home for most employees, reducing the physical occupancy of offices to the level of 35 – 40%.
Given that the new working model has come up with a number of challenges, but also with benefits, most companies are currently analyzing how they will operate on the medium and long term, while they carefully monitor the productivity evolution and reanalyze the occupancy costs.
ManpowerGroup leased 1.063 square meters in The Light One office building, developed and owned by River Development.
ManpowerGroup joins companies such as CTP, Regina Maria Medical Clinic, Kinetic, ON Semiconductor or Sweat Concept in the building.
The new headquarters meets all the requirements of the company that aims to expand the business, and the very well connected area will help easy access both for the company’s employees and for candidates looking for new jobs.
The Light One is the first of the three Class A office buildings in the entire mixed-use office & residential project – The Light.
The building has a leasable area of 21,653 sqm (GLA) and a height of 11 floors – 2S + GF + 11 floors and is BREEAM certified with the Excellent grade.
The office market in Bucharest continues to grow, in the first nine months of the year being delivered new spaces with a total area of 124.000 square meters.
Developers have in various phases of construction buildings with a cumulative area of 388.000 square meters, according to real estate consulting company Cushman & Wakefield Echinox.
The commercial stock (for leasing) of office buildings in Bucharest reaches about 2,9 million square meters, other buildings with an area of around 150.000 square meters being occupied by the owners.
At the same time, demand in the first three quarters amounted to 160.000 square meters, 43% decrease compared to the same period of last year, with transactional activity being dominated by lease renewal and renegotiation contracts, which accounted for almost 46% of request.
While the second quarter, under the impact of the restrictions imposed by Covid-19 pandemic, was one of the weakest for the Bucharest office market in the last decade, with a traded volume of only 44.500 square meters, demand showed week signs of return in the third quarter, when the traded volume amounted to 63.600 sqm.
In this context, the vacancy (contractual) rate of the office spaces is 10.8%, with a significant difference between class A (8.2%) and class B (18.2%) office spaces.
On the other hand, the use of offices is about 40-50% of the usual level before the outbreak of the pandemic, given that the vast majority of companies continue to operate in Work from Home or hybrid system.
The most important office projects under construction are One Cotroceni Park, J8 Office Park, Globalworth Square, U Center, One Tower, Miro Offices, Țiriac Tower, Dacia One, Millo Offices, Expo or Sema London & Oslo, for one among these spaces under construction, the developers have signed pre-lease contracts with various tenants.
Most tenants complied with their contractual obligations to owners of the office buildings managed by Colliers International between July and September, even though many companies operated in a hybrid system, combining remote activity with office presence.
Thus, the share of tenants who paid their debts on time was 91% in the third quarter of this year, compared to 87% in the same period in 2019.
In the third quarter of the ”pandemic year”, tenants in class A office buildings also confirm the good intentions and practices in relation to the obligations they have assumed.
In September, for example, 88% of tenants paid their obligations on time to office building owners, compared to 81% in September 2019, when business activities were not hit by the crisis caused by the COVID-19 pandemic.
Even though they have been the most affected lately, more than a third (76%) of retail tenants have managed to comply with their contractual obligations, which include rent, utilities and service costs, and paid them on time in the third quarter of the ”pandemic year”, a slightly higher percentage compared to the same period in 2019.
Also, tenants of the industrial spaces managed by Colliers International mostly tried to pay their obligations on time, the number of companies that were able to comply with all contractual obligations between July and September of this year being smaller, compared to the same period in 2019, but the share of tenants who paid their debts on time remained over 80%.
One of the largest investors on the Bucharest office market, Austrian Immofinanz, signed contracts for more than 41.000 sqm during the first nine months of 2020.
Contracts include prolongations and expansion of existing premises as well as new tenants, in the company’s office buildings – eight active properties, plus two office buildings in the process of refurbishing, all located in Bucharest and Voluntari.
More than half of the contracts have been signed for IRIDE park and myhive S-Park, where several companies extended the renting period or leased additional areas.
Among the new tenants in the Immofinanz portfolio are UNIVA, which has opted to rent an area of over 2.000 square meters in the Global Business Center building and Samsara, a Cluj-based brand, known as one of the first exclusively vegetarian restaurants, vegan and raw-vegan in the country.
Samsara will open a production, delivery (pick-up) and catering center in IRIDE. At the same location, Hartmann and Tabac XPress rented new space.
Pink Postmaster has extended the contract for the spaces in the Pipera II office building and in Pipera warehouse (for an area of approximately 2,000 square meters), and Grundfos Romania in the myhive S-Park building.
Harman decided to continue collaborating with IMMOFINANZ for its offices in myhive Metroffice building for an area of more than 10,000 square meters.
Hartmann moves its office in Bucharest within the IRIDE Park project owned by Immofinanz.
Hartmann leased a 500 square meters workspace in the myhive IRIDE | nineteen office building, the transaction being brokered by the real estate consulting company Cushman & Wakefield Echinox.
The myhive IRIDE | nineteen office building, located in the north of Bucharest, on Dimitrie Pompeiu Street, is part of the IRIDE office park and is currently in a process of modernization.
The myhive IRIDE | nineteen project has a leasable area of over 18.000 square meters, for companies such as: Sodexo Romania and Rohde & Schwarz Topex.
The office market in Bucharest and in the major regional cities, Cluj-Napoca, Timișoara, Iași and Brașov, continues to develop, with local and foreign investors having projects under construction or scheduled for delivery with an area of approximately 500,000 square meters that will be put into use in the next 16 months.
This are the latest data of Bucharest Office Market and Office Regional Cities Reports, realised by the real estate consulting company Cushman & Wakefield Echinox.
The most active market remains Bucharest, with projects of about 340,000 square meters scheduled for delivery by the end of 2021, followed by Timişoara (80,000 square meters), Cluj-Napoca (36,000 square meters) and Braşov (25,000 square meters).
The most active developers in terms of surfaces scheduled to be delivered in the next period are One United (94,000 sqm), Iulius Group (60,000 sqm), Portland Trust (45,000 sqm) and Forte Partners (41,000 sqm).
At the end of the first semester, the modern office stock in Bucharest was about 2.9 million square meters leasable area, without taking into account the buildings occupied directly by the owners, while the stock in regional cities was approaching the 1 million square meters threshold, the largest markets being Cluj-Napoca (347,000 sqm), Timişoara (245,000 sqm) and Iaşi (226,000 sqm).
The vacancy rate varies from 10.3% in Bucharest, with values of 4.7% in Floreasca – Barbu Văcărescu and 7.4% in CBD, to 5.6% in Cluj-Napoca or 5.7% in Braşov.
The prime headline rents remained stable, at a level of 19 euro / sqm / month in Bucharest and 15 euro / sqm / month in Cluj-Napoca or Timişoara, after a long period in which the competition between developers kept the local market rents at a competitive level compared to similar cities in Central and Eastern Europe.
The most important office projects to be delivered in regional cities (S2 2020 – 2021)
City
Project
GLA(sq m)
Developer
Delivery
Timişoara
UBC 0
55,000
Iulius Group
2021
Timişoara
ISHO III
17,000
Mulberry Development
2021
Timişoara
Romcapital Center II
8,500
Altus
2020/2021
Cluj-Napoca
Banca Transilvania HQ
16,000
Banca Transilvania
2021
Cluj-Napoca
Record Park
11,500
Speedwell
2020
Cluj-Napoca
Cluj BC (phase III)
8,700
Felinvest
2020
Braşov
AFI Park Brasov I
15,000
AFI Europe
2020
Braşov
Coresi Business Campus U1
10,500
Ceetrus – Ascenta
2021
Iaşi
United Business Center 8
5,100
Iulius Group
2020
TOTAL
147,300
Source: Cushman & Wakefield Echinox
The most important office projects to be delivered in Bucharest (S2 2020 – 2021)
IT&C and computer companies were the most active on the office space rental market in Bucharest, generating over 40% of demand in the first half of this year, followed by the banking and financial sector, with 25% of the area contracted and by medical and pharmaceutical companies, with about 9% of total take-up.
In the first half of the year, the office space rented in Bucharest totalled approximately 100,000 square meters, of which IT&C and computer companies contracted about 40,000 square meters, banking and finance – 28,000 square meters, and pharma companies rented over 8,500 square meters.
Thus, after almost 50% reduction in Q1 2020 compared to Q4 2019, the decline in office demand in Bucharest continued during Q2, albeit at much lower rate of 19% when compared to the previous quarter.
Total gross transaction volume reached approx. 44,500 m² in Q2 and almost 100,000 m² in H1 2020.
Compared to the first half of last year, demand fell by half due to the COVID-19 crisis. The average transaction size in Q2 2020 was approx. 1,400 m².
Net take up accounted for 16,000 m², or 36% of gross take up during the period. Compared with net take up in Q1 2019, it stood at little over 33%.
JLL was the market leader in Bucharest, with over 36% market share in the first half of the year in terms of transactions intermediated.
In terms of vacancy rate, Q2 experienced a slight increase, from 8.7% in Q1, to approximately 9.3%.
Vacancy rate in the different sub-markets in Bucharest
Sub-market
Stock (m²)
Average rent (Euro/m²/mth)
Vacancy %
1. CBD
320,400
16 – 18.5
4.7
2. Center
342,000
15 – 17
6.5
3. Dimitrie Pompeiu
440,700
12 – 14
8.8
4. Floreasca – BV
520,200
15 – 16
4.8
5. Center – West
439,700
14 – 16
13.3
6. East
51,100
12 – 14
18.1
7. South
41,800
10 – 12
0
8. West
157,900
10 – 13
0
9. North – West (Expozitiei)
222,800
15 – 17
6.5
10. Baneasa – Otopeni
159,800
15 – 17
8.2
11. Pipera North
210,500
11 – 13
35.9
TOTAL
2,906,900
9.3
Source: Bucharest City Report Q2 2020
About 214,000 square meters of offices will be delivered in 2020 in Bucharest, so that the modern stock will exceed 3 million square meters
After strong deliveries of 78,200 m² during Q1 2020, the pace slowed down in Q2 and the office buildings completed during the period added 27,900 m² to the modern office stock in Bucharest.
The projects delivered in Q2 include The Bridge phase 3 in the Center-West sub-market with approx. 21,200 m² GLA, and the Zone 313 in the Floreasca-Barbu Vacarescu sub-market, adding 6,700 m² GLA.
Deliveries in Q2 2020 represent approximately 33% of the volume recorded in Q2 2019, when 85,500 m² were added to the market.
Several important deliveries are waited for the second half of 2020, totaling 108,000 m². Thus this year the modern stock would increase by 214,000 m², exceeding the milestone of 3 million m² in Bucharest.
Among these the largest are Globalworth Square with 25,700 m², and One Tower, adding 23,600 m², both situated in the Floreasca – Barbu Vacarescu sub-market, as well as the second and third buildings in Campus 6, adding another 36,900 m² to the Center – West sub-market.
