Real estate investors to focus on Bucharest office spaces
02 January 2008
According to a study conducted by the EuroMetropola Company, real-estate developers try to create plots of land portfolios for the projects that they will start in the next two to three years.
“For the developers that have a generous budget the big fight is over the plots of lands in central and ultra central areas, feasible for commercial, residential or office-building use. Because these available plots of land are in increasingly low numbers, their owners have become interested in entering partnerships with real-estate investors” Monica Marin, partner manager within EuroMetropola, explained.
She pointed out that generally the owners contribute to the new business with the plot of land and the investment funds generate the needed sum for constructions.
”A joint venture is the preferred option for the owners oriented towards developing a long term business that could generate a much larger profit than they would have obtained by selling the plot of land” real-estate analysts added.
Office-building spaces are becoming increasingly scarce in Bucharest, a reason that explains the fact that a lot of this type of buildings are leased long before they are built, shows a study authored by the City Expert agency.
Like in the case of residential projects, the demand for office buildings surpasses the offer. “Due to the lifestyle and the large wages, an internal migration towards Bucharest has been registered” Eugen Paternic, general manager within City Expert real-estate agency, pointed out.
The IT and telecommunications companies continue to be the most important tenants in Bucharest’s northern area. The central-north area is the most expensive in what concerns the office-building spaces, an area where the headquarters of the most important international banks and local market companies can be found.
The rent for 2008 is estimated at EUR 20 per square meter per month for these locations, with slight variations of up to EUR 14/sq.m/month. Although the prices rise, the Romanian real-estate market will remain attractive on the long term, a fact also confirmed by the specialists within the Coldwell Banker Commercial real-estate consultancy company.
The office-building segment in Romania is mainly cantered in Bucharest, representing 60 per cent of the total stock, significantly surpassing several large cities such as Brasov, Cluj, Constanta and Timisoara.
The office-building stock in Bucharest has reached 1.2 million square meters with another 400,000 square meters set to be finalized by the end of 2009. With an estimated demand of approximately 2.5 million square meters, one could foresee that the offer will satisfy the demand for office-buildings in approximately 3 to 4 years.