Hanner Group sold the office component of the mixed-used project Jauna Teika Riga to EfTEN Real Estate Fund 4.
Jauna Teika team will keep on providing the established lifestyle in the co-working spaces Teikums, conference center Fantadroms, fitness center Squad Hour and all food and entertainment facilities.
The office campus consists of four buildings, with a gross leasable area of about 60,000 sqm.
About 50 tenants are located in Jauna Teika buildings, including financial services companies DNB Bank, BIGBANK and Intrum, iIT companies TietoEVRY and Accenture, co-working company Teikums, chemical companies Cabot and Solvay.
More than 6000 people are currently working in Jauna Teika offices.
According to Skanska’s survey among people in CEE, nowadays nearly half of office workers go to the office every day.
The same percentage being valid for Romanian employees who have returned to their workplaces.
18% of Romanian employees work in a hybrid model, with 3 or 4 days a week in the office, while 20% of Romanian employees work only from home.
Top choice: hybrid model with office work dominating
For 51% of the employees surveyed, the ideal working model involves at least 3-4 days a week working from the office. This trend is visible in all CEE countries.
Specifically for the respondents from Romania, 27% would like to work in the office at least 3-4 days a week, this being their ideal working model.
Another 22% of them would like to work exclusively from the office and 19 % would prefer to work only from home.
Offices need to offer more than before
The most important aspects of remote working listed by CEE employees include the ease of organizing family life (51%), good working conditions at home (48%), and saving time on commuting to the office (45%).
The study notes several differentiators in terms of what would motivate employees in the four countries to return to the office.
For Romanian employees, the most important thing is for the workplace to reach high-quality standards, including sanitary ones and the possibility to relax and work outdoors.
For Polish employees, a first motivating factor would be the possibility to use the restaurants or canteens at the employer’s expense.
Employees in the Czech Republic and Hungary, on the other hand, want to work in a quiet place or individual, separate rooms for work.
Hungarians would also appreciate free parking spaces.
Dream office: comfort, safety, and good IT connection
Among the first three indicators of an ideal office for Romanians are: very good quality IT equipment (39%) and green, open spaces for work and relaxation (33%).
Other crucial aspects include a quiet space that allows concentration (32%), professional lighting that does not tire the eyes (27%), separate or individual workspaces (18%).
Among the barriers that Romanians have regarding returning to the office are the impossibility of serving a warm and healthy meal at work (14%).
17% do not want to spend their time in a confined space with air conditioning, and 26% fear of getting the virus once they return to the office.
The study also confirms the great importance of safety issues. The results show that high sanitary standards can encourage working in the offices, while lack of them causes fear of contracting the virus.
Daily disinfection of the office (41%), lower population density (37%), and non-contact solutions (37%) are the main factors that would positively affect employees’ sense of safety.
The volume of leasing transactions on the Bucharest office market increased in Q1 2021 to 48,000 square meters, a 9% decrease from previous year.
Moreover, the share of pre-lease contracts increased from 20% to 46%, reveals the research data of the real estate consulting company Cushman & Wakefield Echinox.
In terms of deliveries, in the first quarter of 2020, there have been completed the Campus 6.2 buildings and Millo Offices, the two buildings having a total area of almost 30,000 sqm.
In comparison, in the first quarter of 2020, new office spaces with an area of 79,000 square meters were delivered in Bucharest.
However, this year’s deliveries will be above the level of 2020 and by the end of this year another approximately 220,000 sqm of new modern office space are expected to be delivered.
The (leasing) commercial stock of office buildings in Bucharest reaches about 2.98 million square meters
Other buildings with an area of approximately 150,000 sqm being occupied by the owners, while projects with a total area of 370,000 sqm are currently under construction.
In this context, the office spaces vacancy rate (contractual) is 13.5%, with a significant difference between A class (10.7%) and B class (22.1%) office buildings.
Mindspace launches ”Hybrid office”, its new array of on-demand solutions for companies and individuals adapting to the new work model.
Mindpass Daily and Mindpass Multi offer on-demand, casual access to office spaces for 1, 4, 8 or 12 days a month, and can be purchased online.
Prices start at ($30, £20, PLN 85, 135₪, €18).
The ”Hybrid Office” offers a private office to companies under a hybrid model with teams who prefer working in-office on their WFH rotations.
This solution includes Mindspace membership benefits such as access to meeting rooms, event spaces, common areas and the many amenities available on site.
Diaverum decided to expand and relocate their operations into a larger, more efficient office space that creates optimal conditions for business development.
The company leased 765 sqm, almost 65% of the iconic 14th floor of Charles de Gaulle Plaza, with spectacular view to Herastrau Park.
Diaverum is a leading global provider in renal care services, serving almost 40,000 patients with 6 million treatments annually.
In Romania, the company has 27 Nephrology and Dialysis clinics and around 1.100 employees.
FORTIM Trusted Advisors, an Alliance Member of BNP Paribas Real Estate in Romania, assisted Diaverum in the relocation process.
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.
Skanska invests EUR 76M in the first phase of Port7, a mixed-use project located in Prague. The construction contract is worth about CZK 1.7 billion.
The ten-story office building will have a total leasable area of around 27,700 square meters, with two underground parking levels.
The investment also includes underground parking levels for the planned second phase of Port7.
The full Port7 complex will offer about 35,000 square meters of A-class office and retail premises in three buildings, with retail stores, restaurants, cafés and fitness centers located on the ground floor of the buildings.
Romania almost doubled its share in the region’s turnover over the previous year and entered the big league, after Poland and the Czech Republic, but before Hungary, Slovakia and Bulgaria.
In a year severely affected by the pandemic, in which Poland, Czech Republic and Hungary all saw year on year declines in volumes, Romania, Slovakia and Bulgaria all saw positive trends.
Overall, volumes in 2020 declined by 24% compared to 2019 with the year closing at about 10.4 billion euro.
Poland remained leader in the region, with investment volumes accounting for 51% of the overall CEE6 total with a total value of investment transactions worth 5.2 billion euro.
Czech Republic followed with a 26% share, thanks to a large residential portfolio sale.
Romania completes the top with a 8.5% share and a volume in the area of almost 900 million euro (up by about 40% over 2019).
The transaction completed by NEPI Rockcastle, advised by Colliers, involving the sale of four office projects to AFI Europe accounted for almost a third of the local investment market in 2020.
The office sector was dominant all over the region in 2020 in terms of transactional activity, with a share of 41% of the total volume of investments, followed by industrial and logistics spaces sector (32%) and away from the more challenged retail and hospitality sectors (12%).
Bucharest, highest yields in the region
Bucharest has some of the highest yields in the region for the office sector (7%), compared to at most 4.25% in Prague, 4,65% in Warsaw or 5.25% in Budapest.
Going forward, rents will remain relatively stable, with prime headline still around 18 euros per square meter in the office sector in Bucharest (and an average in the region of 14 euro per square meter).
In the last quarter of 2020, in Bucharest there were transactions of office spaces with a total area of 77,000 square meters, the highest quarterly value of the year.
The annual volume of transactions reached approximately 237,000 meters squares, according to Cushman & Wakefield Echinox.
Compared to the previous year, the transactional office area decreased by 39%, while the share of renewal contracts increased from 21% to 45%.
The most important office project completed in the last quarter of 2020 was One Tower, with a leasable area of 24,000 square meters, part of the mixed project One Floreasca City, the total deliveries of new office spaces in 2020 totaling 155,000 square meters, a decrease of 46% compared to 2019.
The commercial stock (destined for lease) of office buildings in Bucharest amounts to approximately 2.95 million square meters, other buildings with an area of approximately 150,000 square meters being occupied by the owners, while projects with a total area of 350,000 square meters are currently under construction, being scheduled for delivery between 2021-2022.
In this context, the (contractual) vacancy rateof office spaces is 12.5%, with a significant difference between class A (9.7%) and class B (20.7%) spaces.
The most important office projects under construction are One Cotroceni Park, J8 Office Park, Globalworth Square, U Center, Miro Offices, Ţiriac Tower, Dacia One, Millo Offices, Expo or Sema London & Oslo, the developers having signed pre-lease contracts for about 60% of the spaces.
The new offices are part of a mixed-use building covering 12,300 square meters that has been completed this year and another similar building covering 12,700 square meters is set to be finalized in the second quarter of 2021.
The total investment in both developments amounts to 39 million euros.
With this new opening, Electroputere Parc adds 4,300 square meters of commercial spaces and 8,000 square meters of office spaces, alongside 650 new underground parking spaces for customers and employees.
The new commercial spaces are already occupied by brands like Hervis, Volvo, Pepco, Takko and Sportissimo, as well as several coffee shops and restaurants.
The Class A office building is also almost entirely leased. The main tenant, covering 60% of the gross leasable area, is HELLA, the leading automotive supplier specialized in innovative lighting systems and vehicle electronics that has 4,500 employees in Romania in total.
Electroputere Parc to upgrade in 2021
Construction works for a second tranche of the mixed-use development of Electroputere Parc are well underway, with plans to be finalized in the second quarter of 2021.
This will add another building offering 12,700 additional square meters of mixed-use spaces.
Once this second tranche is completed, the total gross leasable area of the new complex will increase to 25,000 square meters, of which 9,000 square meters for retail and entertainment and 16,000 square meters for offices.
The French real estate group Catinvest, which owns and manages Electroputere Parc, also owns and manages several other shopping centers in Romania – Carrefour Orhideea and Cora Pantelimon in Bucharest and Carrefour TOM in Constanta – as well as in Eastern Europe – Auchan Savoya Park in Budapest and Tesco Borska Pole in Plzen.
Catinvest is also active in France in residential and shopping centers activities. In total, Catinvest owns and manages more than 500,000 square meters of spaces in France and Eastern Europe.
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.
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.
