Office space market sees 400 ml euro worth of investments as of mid-year, up 18 pct (survey)

Investments in the office market amounted to 404 million euro as of mid-year, almost 18 pct higher from H1 2017, and chances are that the 1-bln euro threshold is exceeded, representatives of Colliers International Romania said in release this Tuesday. 

The weightiest deals were sealed for Bucharest-based office and retail projects (the sale of Oregon Park to Lion's Head, the sale of the first phase of the Campus 6 project to CA Immo, the purchase of Militari Shopping Center by the Prime Kapital/MAS REI association). An interesting transaction with an institutional investor was concluded in Cluj-Napoca, where British investment fund First Property acquired the Maestro Business Center office building. 

Both the number of investors and the amount of transactions increased in the first half of the year, with the average value of assets changing hands in one deal standing at approximately 40 million euro as to 25 million euro in the year before. This is the highest average amount in the past decade, a sign that the market has grown mature, said Colliers experts. 

A total area of 33,000 sqm changed hands in Bucharest in H1 2018, and the handover of projects covering another 150,000 sqm is expected for H2, the survey by the real estate consulting firm shows. The cities of Timisoara and Cluj-Napoca added around 72,000 sqm of modern office buildings. 

The total demand for rental space in Bucharest dropped to 150,000 sqm and net demand stood at 84,000 sqm, slightly higher than last year and marking a new post-crisis peak for the first semester. The tenants were mainly interested in center-west and central neighborhoods (28 pct and 26 pct of the total demand, respectively). 

More than a quarter of the total demand for office space was generated by the IT&C sector, followed by energy and industry (almost 25 pct). Co-working companies rented a record-high surface of 16,800 sqm. Demand by this sector is already twice as high as the 2017 all-year figure and such transactions will keep on occurring. 

Reported rental deals stood a little below 110,000 sqm, yet Colliers experts assume that (unreported) direct transactions account for a significant chunk of the market given that the vacancy rate is very low.