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Tag: colliers international

  • 2020, one the poorest years in the last decade for the Bucharest office market

    2020, one the poorest years in the last decade for the Bucharest office market

    2020 was one the poorest in the last decade for the Bucharest office market in terms of demand, reflecting uncertainties generated by the pandemic.

    Overall, gross take-up declined by c.40% compared to 2019 to 214,000 square meters, the lowest level since 2012.

    New demand stood at around 70,000 square meters, according to the 2020 annual report released by Colliers.

    The effects of the ”pandemic year” continue to be felt in the Bucharest office sector in 2021, with a recovery likely to last several years.

    Outside Bucharest, the gross demand in the four major office submarkets – Cluj-Napoca, Timișoara, Iași and Brașov – decreased some 19% in 2020, to 60,000 square meters.

    But, more than half of last year’s take-up came from a single lease, a renewal of over 30,000 square meters in Iași (Amazon).

    These markets hold a cumulated modern office stock of close to 900,000 square meters, less than one third of Bucharest’s, while these cities tend to have a similar pace for job creation.

    156,000 square meters of new modern offices delivered last year

    In terms of delivery, 2020 was a robust year for the Bucharest office market, with some 156,000 square meters of new modern offices delivered.

    Also, there is a big difference compared to the 286,000 square meters seen in 2019, but it is still a fairly robust figure at around 5% of the current modern office stock in Bucharest.

    In 2021, about 250,000 square meters of new modern offices are set to be finalized, with pre-lease ratios at around 40% for new projects at the end of the previous year.

    A positive aspect is that the major additions in 2020 were spread throughout different submarkets, a sign of a mature and stable market.

  • Effects of the pandemic on the housing rental market in Bucharest

    Effects of the pandemic on the housing rental market in Bucharest

    More than half (55%) of Bucharest residents currently living on rent do not plan to buy an apartment next year and want to continue renting, according to a Colliers International study.

    However, 45% of them consider changing their rented housing, the majority (66%) because they want a more spacious or better positioned apartment, including new buildings, and only a third because they want to lower their rental costs.

    The crisis caused by the coronavirus is beginning to show its effects on the housing rental market as well.

    In Bucharest, students have left many empty properties, apartments previously rented per night have been converted into apartments with monthly rent and the number of rental offers in the market began to grow.

    The value of rents remains the main factor for tenants when choosing a rental or another.

    In the current uncertain context created by the Covid-19 pandemic, tenants are looking for security, either by reducing the rent or moving to a smaller space, either by reaching a longer-term agreement with the owners or registering contracts at the National Agency for Fiscal Administration (ANAF).

    Compared to the previous crisis from 2008-2009, lease registration ensures owners binding, enforceable documentation, facilitating money recovery from tenants.

    Beyond the cost of the monthly rent, most respondents who consider it more profitable to rent than to buy their home are also looking for certain functionalities that suit their needs and lifestyle, such as parks, green spaces and playgrounds located in proximity, which have become almost as important as the access to public transport.

    If the proximity to a supermarket has always been a priority, top preferences this year also include pharmacies, which are requested by almost 50% of tenants, according to data from the study requested by Colliers International.

  • Bucharest: More than 90% of tenants paid their rent on time

    Bucharest: More than 90% of tenants paid their rent on time

    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%.

  • Romania: Real estate investments in 2020, 27% higher than those recorded in the whole 2019

    Romania: Real estate investments in 2020, 27% higher than those recorded in the whole 2019

    Almost two thirds (62%) of real estate investors confirm interest for acquisitions of new projects, both in Bucharest and regional cities, and are currently ready to buy at more favourable conditions, given the new economic context generated by the Covid-19 epidemics, according to a survey conducted by Colliers International on the investment market among nearly 50 real estate companies representing investment funds, developers, asset managers and banks.

    Investors continue to show the most interest in industrial and logistics projects, with optimism increasing since April, when Colliers conducted a similar survey.

    The share of respondents stating they want to better understand the situation before making a move has dropped from 67% in April to 30% in October.

    Moreover, the percentage of investors ready to ”buy at more favourable conditions” has increased from 23% to 62%.

    The share of market participants looking to expand their portfolios both in Bucharest and regional cities far outweighs that of those seeking an exit, according to another positive chart in the report.

    Around 57% of respondents with assets/focus in Bucharest are looking for opportunities, as are 32% of respondents with assets in regional cities.

    Regarding the financing availability, there are some improvements since the April survey conducted by Colliers, though the majority of investors (55%) still expect a short-term worsening, versus 74% in the April survey.

    Meanwhile, investment volumes on the local real estate market reached nearly 820 million euro in Romania in the first three quarters of the year, up by 45% versus 2019’s same period and 27% more than in all 2019, making the best three quarters in the last decade, with office assets accounting over 90% of volumes.

    While there is some inertia at play, it is encouraging that the year’s biggest deals – the sale of the NEPI Rockcastle office portfolio for over EUR 300mn to AFI Europe and the sale of Floreasca Park to the Fosun/Zeus JV for over EUR 100mn – were both finalized in August, in spite of the pandemic.[HA1]

    A recession with a much swifter recovery

    The investors are still looking at a recession with a much swifter recovery than that of 2009, with the real estate segment being resilient against this backdrop.

    The main issue on the mind of real estate market participants is the uncertain global economic backdrop (51% of answers), followed by concerns about Romania’s fundamentals, like its fiscal imbalances (40% of answers) and uncertainties about real estate in general (38% of answers). This suggests a fairly difficult backdrop for conducting deals, but it appears that general concerns weigh a bit more than Romania’s specific problems.

  • Colliers has monitored construction works for almost 750,000 sq m

    Colliers has monitored construction works for almost 750,000 sq m

    Colliers International has monitored construction works, from foundation to delivery, for projects with almost 750,000 square meters in the last 5 years, in Romania.

    Three quarters are in the industrial area, almost 20% in the office area and 5% in the residential area.

    Construction works are being carried out at a normal pace during this period on the sites monitored by Colliers International specialists or even at an accelerated pace in some cases, amid plans to recover the delays during the state of emergency, when certain construction works were carried out at a lower capacity than normal.

    Monitoring of construction works entails involvement from the planning stage and periodic inspections to ensure construction works comply with the initial plans.

    Verifications consider a number of indicators that vary from the stage of the construction works and the way in which the budget is allocated, to the stage of the necessary authorizations, compliance with contracts or progress in ensuring access to utilities.

    Each inspection is followed by a report on the development of the project, which provides a very clear overview for the developer as well as for the bank that finances the project.

    Colliers International currently provides construction monitoring services for projects with a total construction area of ​​almost 198,000 square meters.

    Among the most important clients of the company are CTP, Iulius Group (among the most important projects we can mention: Palas Iași, United Business Center (UBC) 1 in Cluj-Napoca, UBC1 and UBC2 in Timișoara), AFI Europe Romania or Impact Developer & Contractor ( with Greenfield Baneasa as a reference project) while the banks with which the company currently collaborates are Raiffeisen Bank Romania, Raiffeisen Bank International AG and OTP Bank Romania.

  • Recovery beyond expectations in Romanian retail. Traffic at 80% of normal

    Recovery beyond expectations in Romanian retail. Traffic at 80% of normal

    The first half of the year was most difficult for retail players, considering the lockdown during the emergency state, but the recovery up until July has been better than most market participants were initially expecting, according to Colliers International’s market report for the first semester of 2020.

    In the industrial & logistics area, it has been business as usual during the pandemic, with some seeing big spikes in activity, but a significant pipeline of speculative developments and a competitive market are tilting the balance in favour or tenants.

    A single retail park, in Miercurea Ciuc, with a bit under 12,000 square meters, was inaugurated in the first half of the year.

    While several retail projects were delayed amid the coronavirus lockdown, others moved forward, like NEPI’s Shopping City Targu Mures (nearly 40,000 sqm), completed in July, and AFI Brașov (45,000 sqm) and Prime Kapital’s Dambovita Mall (33,000 sqm) are set to opened with little delay in autumn.

    Overall, a 200,000 square meters pipeline in 2020 is not too different than Colliers International consultants estimated ahead of the Covid-19 events (about 246,000 sqm), and experts expect a quick recovery throughout the next 12 months, with Romania having the potential to surpass 4 millions square meters of new retail space at the end of this year or the beginning of the next one.

    Foot traffic in shopping centers at 80% of normal levels

    Foot traffic has gradually returned to towards 80%, of normal levels for this period of the year after the reopening of malls in June, based on information that Colliers International consultants received from major landlords, while for some retail parks, particularly in certain parts of the country, sales are already above 2019-levels.

    Google mobility indicators for Bucharest show that foot traffic in all retail and entertainment areas is some 25% below a baseline set using figures for the early January-early February period, which tends to be much busier than summer months, when people travel a lot on holidays instead of going shopping.

    However, sales remain even half below last year’s in some segments such as restaurants and coffee shops, fashion as of mid-2020, so spending intentions have not fully returned.

    Furthermore, the V-shaped recovery of consumption continued strongly in June, with retail sales having recovered three quarters of the decline seen in March and April and overall sales turning positive for the year in the January-June period.

    While the future path of the recovery will depend on how the pandemic situation evolves, as well as the dynamic of the labour market, it is clear that things are moving much faster than with the previous recession: retail sales do not return, in real terms, to levels seen in 2008’s summer until mid-2015.

    Statistical data suggest that the recovery is quite uneven, with clothing sales lagging quite a lot as spending shifted in the last couple of months towards items like DIY or sportswear (including camping).

    The vacancy rate remains low in the dominant shopping centers

    While the dominant shopping centers fared well and have not seen an uptick in vacancy, others have felt something like this, though vacancy remains, for the most part, manageable, in single digit territory, maybe increasing from sub 2% levels – including non-existent – towards 5% in good, but not dominant shopping centers.

    It is clear that the times we are living are not easy neither for retailers nor for landlords, therefore the parties are taking a step by step approach in negotiating temporary rent discounts, after  analyzing  the performance of the business at the end of each month.

    Modern industrial and logistic stock reached 4.7 million square meters at the end of June

    Around 120,000 square meters in new modern industrial & logistics spaces are estimated to have come online in the first semester of 2020 throughout Romania, with 100,000 square meters in the vicinity of Bucharest, which is less than half the level seen a year ago.

    Colliers International consultants explain that some clients have decided to postpone their expansion plans for 2021 and also a big part of the speculative developments were put on hold amid the coronavirus pandemic, meaning that we can expect the overall supply for 2020 to be nearly 30% lower than potential at the start of the year.

    The second half of the year is seen to be much more active, with nearly 300,000 square meters in new deliveries expected, two thirds in Bucharest, as quite a few big contracts were signed fairly recently, and the tenants are expecting to move in. This took overall modern industrial & logistics stock to 4.7 million square meters at the end of June, with Bucharest amounting to 2.4 million square meters.

    Healthy competition on the developer side has helped cap rents in spite of the strong leasing market in recent years. Consequently, rents are quite good for tenants, in the area of 3.8-3.9 euro per square meter for prime industrial & logistic spaces around Bucharest and around 3.7-3.9 in other parts of the country (but in very good areas).

    Colliers International consultants note that amid the pandemic, incentives are higher, with landlords offering more rent-free months than before; this means that, in some instances, the net-effective rent can reach some 20% below the headline (versus around 13% before).

    Otherwise, vacancy is still comfortably in single digit territory. It is hovering around 7-8% and has not seen any material changes amid the coronavirus situation.

    Such levels are consistent with a neutral market, but with the significant pipeline of speculative developments (including such deliveries in recent years) plus a competitive market tilting the balance in favour or tenants.

  • The Romanian investment market grew in the first half of the year

    The Romanian investment market grew in the first half of the year

    The first half of the ”pandemic year” closed with a total value of investment transactions worth 408 million euro in Romania, around 18% above the first semester of 2019.

    Office assets accounted at nearly 86% of volumes, according to Colliers International’s market report for the first semester of 2020.

    Still, the outlook is uncertain since several large big-ticket items have either been frozen or fell through. On the opposite pole, the local land market continues to see deals closing and significant interest.

    Similar to the CEE region, Romanian investment volume was up in the first half of the year, to 408 million euro, around 18% above the first semester of 2019.

    Over one quarter of the volumes recorded in Romania was generated by the GTC portfolio sale to the Hungarian Optimum Private Equity Fund, which includes several office projects in Bucharest (deal estimated around 116 million euro for Romania).

    Two similar-sized deals (in excess of 50 million euro) came from the closing of the third phase of The Bridge office project (purchased by the owners of the Romanian DIY chain Dedeman) and Global City Business Park offices (purchased by Greek-owned Arion Green).

    In fact, nearly 86% of volumes were generated by office projects, mostly located in Bucharest.

    There is potential to see some opportunistic or value-add transactions

    Overall, 2020 may look like a sluggish year, with volumes in the 600-700 million euro range, though a lot will depend on if and how the deals which were frozen or fell through during the lockdown period may be recovered.

    There is also potential to see some opportunistic or value-add transactions, though we would argue that it may take some time for the seller or his companies to hit trouble, requiring a fire sale approach to raise some cash quickly.

    At the Central and Eastern Europe (CEE) level, almost all markets have seen an increase in yields compared to end-2019 for office and retail assets. Investment volumes in the CEE region printed at nearly 6.3b billion euro in the first semester of the year from just under 6 billion euro, which translates into a roughly 5% increase.

    New plots are put up for sale with rather normal prices, as if the pandemic did not exist

    In the land market, the activity is almost normal and some deals even went ahead during the lockdown period. Demand from retail players has arguably been the best in the first semester of the year.

    Though demand for plots geared at big shopping centers/malls has indeed stagnated, retail park developers and big box owners all continued to look towards new projects in various parts of the country that have a subpar offering of modern retail spaces. We even have a new entry on this space that surfaced during the lockdown period.

    Nevertheless, a few big deals, in excess of 10 million euro, that seemed likely to close in 2020 may not happen this year, rather next year. Residential developers are still holding on to a fairly robust demand for land, though not on par with 2018-2019 levels, which have seen record highs (hence, a lot of them have strong land banks); still, most remain on the lookout for any opportunities, including consolidating land around current projects.

    Supply remains adequate, from various categories of sellers which have been present in the market in the last years. New plots are put up for sale even now and not necessarily at any discounted prices, but rather normal prices, regardless of the pandemic context, on account of continuing demand.

    Furthermore, there have not been any distressed assets to begin with, though the economic woes are still only a few months old and time may bring out some financial weaknesses for some individuals or companies, forcing them to scale back prices for a quick sale.

    On the price front, Colliers International consultants expect things to remain rather flat (with potential downward adjustments only on a case-by-case basis), unless things take a sharp turn for the worse. 

  • First semester of the “pandemic year” in Bucharest office market

    First semester of the “pandemic year” in Bucharest office market

    New office space delivered in the first half of the year reached nearly 105.000 square meters, in tune with Colliers International’s estimates, but total demand in Bucharest was down by nearly 28%, to a bit over 124,000 square meters, while new demand halved after an exceptional year, to under 45,000 square meters.

    Overall, Colliers International consultants do not expect to see too much in terms of new contracts, except for companies that are actually pressured to relocate or expand, in the context in which their representatives have no clarity on how work processes will take place in the future or how their own business will evolve.

    Building activity in the office market continued almost normally during spring, even in the pandemic lockdown context, and there are no major delays for buildings due in 2020, with a potential pipeline of about 230,000 square meters, mainly already fully contracted or mostly pre-leased, according to data from Colliers International.

    The first half of the year saw a delivery of nearly 105,000 square meters in new modern office spaces, with the bulk coming online in the first quarter of the year. Two thirds of the total surface resulted from Ana Tower and the third phase of Globalworth’s Campus project.

    Besides the drop in demand as companies have to cope with uncertainties, another aspect likely to press new demand in the future should be the rise of spaces for sublease.

    This is because some companies that had relocated in recent years had also leased a large buffer space in case they continued to hire people and expand the business; now that these plans seem out of the window, this may free up quite a bit of spaces for sublease.

    Furthermore, work from home, either a few days a week on a permanent arrangement (during this state of alert), should also free up space going forward.

    No major changes have been seen in terms of rents until now, but Colliers International consultants say that we are likely to see moves.

    Over the near term, there are quite a few forces acting on the rent side: first, because tenants may not feel inclined to move, due to incurring costs, and their current landlords may not be as flexible with offering lower rents; meanwhile, than companies willing to take on new spaces (via a relocation or pure new demand) will likely lead to landlords being sensibly more generous (especially via incentives/gratuities rather than lower contractual rents). Also, there are quite a few major spaces, fully fitted, available for sublease at competitive rents.

    An important observation to make is that without the Pipera Nord submarket and class B buildings, vacancy would still be comfortably in single digit territory for class A office buildings.

    On the other hand, as things stand now, we will likely see lower demand going forward as well as pressures on rents.

    Vacancy is likely to climb towards 13-14% by year-end, with total demand for 2020 likely to cool down to a more mellow figure around 200,000 square meters, roughly half seen in 2019 and below the 300,000 square meter average seen this cycle.

    Because of time needed to negotiate deals, travel difficulties of decision-makers in international companies as well as uncertainties likely to linger into next year, 2021 may not look exceptionally good, but it could still surprise positively if the recovery quickens, with labour market indicators offering some encouraging prospects for now.

  • Romania is well positioned to attract industrial capacities from Asia

    Romania is well positioned to attract industrial capacities from Asia

    The Central and Eastern European Region (CEE) may attract new production capacity as the global economy undergoes major changes in the pandemic context, according to a Colliers International report on the regional industrial market.

    Romania is very competitive in terms of costs, and industrial production has increased significantly in recent years, qualities that can turn the country into a magnet for investments in the production area.

    The global economy is undergoing a period of intense changes in the context of the pandemic, and the relationship between Europe and China is expected to shift significantly in the future. More and more specialists are talking about a relocation of important production capacities operated in Asia by European companies, eager to better control the supply chain.

    A major impediment, however, would have been, until recently, the significantly higher production costs in Central and Eastern Europe compared to China. As wages in China have advanced enormously in the last 10 years, this change is becoming more and more possible, especially in the context of a pandemic that has put huge pressure on the supply chain.

    The Central and Eastern European area has seen one of the highest rates of economic growth in the last decade, and industrial production has kept the pace. Probably the biggest advantage that countries in this region have is the labor market, with wages several times lower than in Western Europe and, in recent years, surprisingly similar to those in China, according to Colliers International’s report.

    Labour cost in CEE saw an increase

    Specifically, the Czech Republic, Hungary, Poland, Slovakia saw an increase in labor costs of 1.6 to 2.6 times from 2004 to 2018, while Bulgaria and Romania recorded increases of just over 3 times in the same period.

    For comparison, labor costs in the German production sector are about 3 times higher than in the Czech Republic and Slovakia, about 4 times higher than in Hungary and Poland, almost 6 times higher than in Romania and almost 8 times higher than in Bulgaria.

    The pace of productivity growth has remained above the pace of cost advances, and, in all Central and Eastern European countries, the gap between value added per employee and labor costs has widened significantly between 2004 and 2018.

    It is worth noting that in Romania, the gap between value added per employee and labor costs is slightly below that of China, with neighboring countries also following, with small differences.

  • Office deliveries in Bucharest could break 300,000 sqm

    In the third quarter of 2019, 66,000 sqm of new modern office buildings came online in the Bucharest office market and there are big chances to break the 300,000 sqm threshold, according to real estate consultancy company Colliers International.

    The higher vacancy and infrastructure discrepancies will likely support a more thorough segmentation of the market, with the gap between well-located buildings and those at the opposite spectrum likely to increase over the medium term.

    The third quarter saw a gross demand at 74,800 sqm in Bucharest, up by c.18% in the January-September period (to around 263,000 sqm). However, the net take-up is still down some 20% in the first three quarters of 2019, to 83,600 sqm, with 35,000 sqm in Q3 2019.

    Over 100,000 sqm of leasing transactions in the first 9 months of 2019 were generated by relocations from competitive stock, on track for an all-time high this year. Around two thirds of these deals are pre-leases, meaning that their impact is yet to be felt on the vacancy rate, which remains in a market neutral-area of c.10%.

    Some 66,000 sqm in new modern office buildings came online in the third quarter, coming from 3 projects – Expo Business Park in the Expozitiei area (c.38,400 sqm), The Light in Center West submarket (c.21,700 sqm) and Eminescu Office near Romana Square (c.6,300 sqm), thus taking the grand total for deliveries this year to over 250,000 sqm in the first three quarters of the year.

    There are big chances to break the 300,000 sqm threshold in terms of deliveries, but as usual, there is always the danger that one or more may get delayed into 2020

    „Bucharest is gradually turning into a tenant market overall (a trend likely to become more visible in 2020), which may lead to pressures on the aggregate headline rate, though in isolated cases, some submarkets or even highly sought-after buildings within some submarkets may still reward landlords with a stronger position in negotiations”, Sebastian Dragomir, Director Office Advisory at Colliers, said.

    The IT&C segment was by far the star of the show yet gain, generating close to 58% of the total market demand (and the bulk of the net take-up as well), followed at a great distance by the financial and professional services segments, both with a market share of around 11%.

    In terms of locations, take-up focused both on active submarkets in terms of new deliveries and also established markets amid renewals, with Center West accounting for almost 20% of gross take-up in the first three quarters of the year, followed by 5 other submarkets with a share of between 10 and 14% of total demand.

    Overall, high-frequency indicators suggest that the very near-term outlook remains largely good for the Bucharest office market, with demand still likely in line with the trend seen this economic cycle, though external uncertainties cloud the longer-term outlook.

  • The modern office stock in 15 CEE countries will reach 30 mil sqm by 2021

    The largest supply of modern office space in 15 CEE countries was recorded in Warsaw, Budapest and in Prague, while the biggest increase of new supply in H1 2019 was noted in Bucharest (185,000 sqm), according to the newest report by real estate consultancy company, Colliers International.

    On a per capita basis, Bucharest’s office surface is around one third below Warsaw’s, which is also significantly below other Western European markets, so there might be room to grow.

    The Coliers report analyzes office markets in 15 CEE countries: Albania, Belarus, Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Montenegro, Poland, Romania, Serbia, Slovakia and Ukraine.

    Most modern office projects are located in the capitals of the countries, although the office market is also developing in regional cities. In the first half of 2019 in all capitals of the 15 analyzed countries tenants leased over 1.5 million sqm of modern office space.

    More and more office buildings boast of prestigious certificates, modern technological and ecological solutions and innovatively designed space. The most active tenant sectors are IT, professional services, banking and BPO/SSC.

    „Total modern office stock in 15 CEE countries in H1 2019 reached almost 27 million sqm. At that time, developers completed 707,000 sqm and 3.7 million sqm is currently under construction. The largest supply of modern office space was recorded in Warsaw, Budapest and in Prague, while the biggest increase of new supply in H1 2019 was noted in Bucharest. Second place in terms of the amount of new office space completed in the same time took Sofia, followed by Warsaw,” says Dominika Jędrak, Director of Research and Consultancy Services, Colliers International.

    Central Europe – renovation of industrial properties into modern office space is one of the market trends

    In Czechia and Slovakia in the first half of 2019, over 130,000 sqm of modern office space was commissioned in Prague and Bratislava. There is also a current market trend towards renovation of old industrial properties into modern and vibrant office spaces. One example of that can be a mixed-use project Pradiareň 1900, involving the refurbishment of the former Bratislava Thread Factory.

    Bucharest has turned into one of the most dynamic economies in the CEE region. This is closely related to the labor force, which offers a nice mix of good language skills as well as much lower costs than in Western Europe. Romania and Bucharest do have a couple of things that set it apart from other peers and even other more developed markets in Europe: a very strong IT&C community.

    „While vacancy is expected to be on the rise over the next couple of years, there are some silver linings. Bucharest still has quite a lot of stock built about a decade ago and part of it would not meet today’s qualitative/technical standards. Vacancy tends to vary quite a lot from submarket to submarket and even between projects in the same submarket. Furthermore, on a relative (per capita) basis, Bucharest’s office surface is still around one third below Warsaw’s, which is also significantly below other Western European markets, so there might still be quite a lot of room to grow”, Sebastian Dragomir, Director Office Advisory at Colliers International Romania, said.

    Warsaw is also developing very quickly, there are approximately 40 office buildings under construction with a total area of over 830,000 sqm, which will gradually fill the supply gap in the next 24 months. The largest projects include The Warsaw HUB, Mennica Legacy Tower and Varso Place – the highest building in European Union. 

    At the end of H1 2019, the total office stock in Budapest exceeded the 3.6 million sqm. The market remained landlord driven in 2019. The largest deals are usually closed by tenants active in the IT, financial and pharmaceutical sectors and by state related occupiers. The speculative office pipeline under construction till 2021 accounts to 404,000 sqm, out of which 95,000 sqm office space is expected to be handed over by the end of 2019.

  • Colliers International advised on the sale of Liberty Technology Park

    Colliers International advised on the sale of Liberty Technology Park office complex, owned by Fribourg Development in Cluj-Napoca, one of Romania’s most important regional real estate hubs. Colliers International also acted as advisor in obtaining financing for the acquisition, where the buyer was White Star Real Estate and its joint venture partner, the endowment fund of a top private university in the USA.  

    The partnership between a real estate player and an educational institution is common practice in other Western countries, but the acquisition of the offices in Cluj represents a unique transaction for the Romanian market, as it brings a change in the pattern of present investors, laying out a pioneering investment case.

    Liberty represents 18,000 square metres of former industrial buildings, redeveloped over the last six years by Fribourg into a modern, industrial feel office park. The technology park comprises five Class A office buildings, BREEAM certified with innovative, eco-friendly and energy efficient technologies, with an additional 3 hectares of land for further development.

    Located in the northern part of the city, Liberty Technology Park enjoys the presence of internationally renowned IT&C and R&D tenants, such as Siemens, IBM, Arvato and Altran. In addition, the Spherik Accelerator was launched here, which strives to improve the local start-up community and help it grow faster internationally.

    About White Star Real Estate

    The buyer, White Star Real Estate, is a regional real estate developer and asset and property manager with offices across the CEE in Warsaw, Prague, Budapest, Bucharest and Moscow.

    The company has built over 50 projects since 1997, including landmark office buildings, warehouses, logistics parks and other industrial projects, retail, mixed-use concepts and residential developments, and currently manages over 2.4 million sqm of commercial properties for their clients.

    White Star has been present in Romania since 2006, its most prominent project being Lakeview, a 25,000 sqm class A office building.

    Second deal for Colliers International in Cluj

    The sale of Liberty Technology Park marks Colliers International’s second office investment deal in Cluj-Napoca. The company also advised on the sale of Maestro Business Center office building last year, making Colliers International the first international agency to advise an office transaction in a regional city of Romania.

    The acquisition was made by First Property Group, a UK investment fund, and it also changed the investment scene in a city then dominated by local capital.