Colliers: Green office buildings and strong market dynamics position Bucharest as key CEE player
<p>Bucharest is one of the largest and most mature office markets in Central and Eastern Europe (CEE), standing out for the expansion of its green building stock and the integration of sustainability standards, alongside Warsaw, Prague, and Budapest, according to Colliers' report" CEE Office Markets on the Green Path - Decarbonisation Potential," which analyses office markets in 11 cities across the region.&nbsp;</p>

<p>Although the pace of new office deliveries has slowed recently, sustainability remains a priority for developers, Colliers said.&nbsp;</p>

<p>Roughly 93% of new office buildings in Bucharest, constructed in the last seven years, and 70% of older buildings over 15 years old hold green certifications, reflecting a strong commitment to sustainability and energy efficiency. In comparison, only Warsaw surpasses Bucharest in terms of green-certified office buildings, with 98% of newly built office spaces holding certifications.&nbsp;</p>

<p>Bucharest's office market closed 2024 with a total leasing demand of nearly 339,000 sqm, marking a 20% decline compared to the historic peak in 2023 yet remaining above the five-year average.</p>

<p>"Office markets in CEE are undergoing a transformation, driven by an aging building stock and increasingly stringent decarbonization requirements imposed by European regulations and global trends. Romania is a key player in the region and while well positioned to adopt sustainability standards, it also has a significant stock of older buildings, comparable to those in Bratislava and Budapest," said Victor Coșconel, Partner | Head of Leasing | Office &amp; Industrial Agencies at Colliers.</p>

<p>Moreover, according to Colliers' leasing data, efficient buildings in prime locations are in higher demand among tenants. The vacancy rate for relatively new buildings in Bucharest, where the percentage of green certifications is very high, remains in the single digits. By contrast, older buildings - often in less central locations and with lower energy efficiency - have vacancy rates approaching 20%.</p>

<p>With only one new delivery in 2024 - AFI Loft, at around 16,000 sqm - Bucharest's modern office stock has reached around 3.4 million sqm. According to the latest Colliers report, 31% of this stock consists of buildings constructed in the last seven years, 27% are between 8 and 10 years old, and 42% were delivered more than 15 years ago.&nbsp;</p>

<p>Colliers advisors note that demand for newly built, certified, and energy-efficient office space remains high in Romania, similar to other mature markets in the region. In Bucharest, newly built office buildings (0-7 years old) have a significantly lower vacancy rate of just 5% and command higher rents, reflecting tenants' preference for operating cost savings and modern amenities.</p>

<p>"Mature markets such as Bucharest and Prague are experiencing a slower pace of new development - less than 5% of the existing stock - in contrast to cities such as Vilnius and Tirana, where 45% and 84% respectively of the total stock is currently under construction. On the other hand, Romania is focusing on modernizing its existing buildings, maintaining market balance, and avoiding oversupply risks," noted Victor Coșconel.</p>

<p>"Green certifications, combined with the balance between supply and demand, further strengthen Bucharest's position as a preferred destination for investors and tenants who prioritize sustainability. This model of adaptation and sustainable development highlights Romania's maturity within the regional office market," he added.&nbsp;</p>

<p>In Bucharest, office space in buildings up to seven years old rents at an average of around EUR 16.5 per sqm, compared to EUR 13 per sqm in buildings older than 15 years.&nbsp;</p>

<p>Colliers consultants point out that the age and quality of buildings are not the only factors influencing rental prices, as location often plays a decisive role in tenants' choices. In Victoriei Square, for example, rents for modern office buildings often reach EUR 22 per sqm, with some properties exceeding this level.</p>

<p>At the regional level, tenants are also willing to pay higher rents for new buildings due to lower operational costs and modern amenities. This trend is evident in markets such as Prague (EUR 17.7 per sqm), Warsaw (EUR 21 per sqm), and Athens (EUR 28.5 per sqm). Additionally, the preference for office spaces in newer buildings (0-7 years old) is reflected in higher occupancy rates compared to older properties.</p>

<p><i>irina.marica@romania-insider.com</i></p>

<p><i>(Photo source: <a href="https://www.dreamstime.com" rel="noopener" target="_blank">Andreasg/Dreamstime.com</a>)</i></p>