Bucharest Office Market Records Lowest Deliveries in 20 Years – Colliers Report

In 2024, Bucharest's office market recorded the lowest level of new deliveries in the past two decades, with only one major project completed — AFI Loft, offering approximately 16,000 square meters of office space, according to the annual report published by Colliers.

Total leasing activity declined by 18% compared to the previous year, although new demand remained at a similar level to 2023. Meanwhile, more companies are encouraging employees to return to the office, driving increased interest in modern and energy-efficient office spaces.

Colliers experts note a growing polarization in the market: the top 20 buildings with the highest vacancy levels report an average vacancy rate of around 33%, while the remaining 190 office projects maintain a much lower average rate of just 7%.

New demand accounted for only one-third of total leasing activity in 2024, down from previous years when it consistently exceeded 40%, and in some cases approached 50%. This trend suggests a slowdown in market expansion compared to earlier periods of rapid growth.

IT&C Remains the Driving Force

The IT&C sector remained the primary driver of leasing demand, accounting for 37% of the total volume, followed by professional and business services (excluding financial services), with 18%.

Colliers consultants observe a clear trend: more companies are bringing employees back to the office. While hybrid work continues to be a widespread practice, implementation varies across organizations.

This shift is reflected in a significant decline in sublease space compared to two years ago. Companies increasingly recognize the need to invest in modern, comfortable workspaces to encourage in-office attendance.

Tenants Prefer Quality, Efficient, Well-Connected Buildings

Tenants are drawn to new, energy-efficient buildings that are well connected to public transport, and these buildings exhibit significantly lower vacancy rates than the rest of the market. In contrast, older buildings in less accessible locations, especially those that have not been modernized, are becoming less attractive to tenants.

While rental levels have mostly stabilized, central areas — including the Central Business District (CBD) — continue to face upward pressure. The limited availability of prime space makes it increasingly difficult for tenants to find suitable options, giving landlords the opportunity to raise asking rents.

This trend is likely to continue into 2025, provided market dynamics remain favorable. The overall vacancy rate slightly exceeded 14% by mid-2024. Colliers experts highlight growing discrepancies between high-quality and lower-quality buildings, as well as between well-connected areas and those with poor infrastructure.

These differences are evident in rental dynamics and occupancy levels. Although the average vacancy rate is around 14%, buildings with the largest unoccupied areas report vacancy rates of 33%.

Some of these figures are driven by temporary factors (such as major tenants vacating), while in other cases, lower occupancy levels are due to structural issues, such as poor energy efficiency or unfavorable location for employees.

Expansion Likely to Slow Amid Global Uncertainty

In a fragile economic and political environment, both domestically and globally, large companies are expected to remain cautious, Colliers emphasizes. This uncertainty is compounded by slow economic growth in many Western countries and unclear policies under the new Trump administration in the United States.

This caution is also reflected in labor market trends: although employment continues to grow in Romania, the pace has slowed significantly compared to previous years.

As a result, expansion plans are likely to be more limited and selective than during the pre-pandemic period. Colliers expects new demand to slightly decrease in 2025.

Nevertheless, due to the limited availability of quality office space and the near-total absence of major developments in the pipeline, the vacancy rate is expected to continue declining.

The only new mixed-use office project scheduled for delivery in 2025 is One Gallery, developed by One United, offering 6,500 square meters, already fully pre-leased.