DTZ Echinox: Office rents hit ten-year high in 2008

In the office market, the level of rents had an upward trend, the year 2008 has recorded the highest rental level in the last 10 years, reaching 25 – 26 euro/sqm/month within the prime office locations, reads the recent study carried out by real estate advisor, DTZ Echinox.

rentable area which makes it suitable to be compared to the level registered in Warsaw year-on-year. Despite the fast pace of growth, the Bucharest stock level is relatively low compared to other capital cities in the core CEE markets, such as Warsaw, Prague or Budapest, with current supply of modern class A and B exceeding 1,150,000 sqm at the end of 2008.

For prime office schemes, parking rents are quoted at a range of 120 – 150 euro (for the underground spaces) and 90 – 110 euro (for the on site spaces) per month for each parking space. Parking spaces within the non-central locations of Pipera or Baneasa are amounting 75 – 90euro/sqm/month (for the underground spaces) or 50 – 70euro/sqm/month (for the on site spaces), reads DTZ Echinox analysis.

“In 2008 the Bucharest office market has continued to experience a strong occupier demand, although the take-up rate was influenced by a shortage of modern A class facilities. The northern side of the city of Bucharest has continued to be the most appealing for new office developments; from the total annual supply the subzone is represented by 43 percents. Furthermore, the new emerging locations are catching the developers’ interest such as the west and centre-west areas, hindmost being amounted at 13.6% of the total office supply made available within the current year”, said the representatives of DTZ Echinox.

Despite the level of development, in 2008 the vacancy rate remained extremely tight, being estimated to reach a level below 1% for prime office areas and approximately 3% for the northern subzone.

According to DTZ Echinox, in 2008, the investment real estate transactions in Romania accounted for approximately 990 million euros, out of which 7.7% were concentrated in the office segment, registering a steep decrease in comparison with the value recorded in 2007 of 21.5% market share.

DTZ is a leading global real estate advisory and consultancy firm with more than 12,500 staff who advise and act for leading multi-national companies, major financial institutions, governments, developers and investors. The parent company, DTZ Holdings plc., is listed at London Stock Exchange since 1897.

In November 2002, after 9 years of operations on the Romanian real estate market, Echinox Consulting entered a partnership agreement with the multinational company DTZ, one of the leading global real estate services companies, Echinox Consulting becoming the local DTZ representative office, operating under the trade name of DTZ Echinox.

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