Top 10: Office deals in 2017. What’s next in 2018?
In the context of a flourishing economy, the local office market sees the positive effects, with six deals exceeding 10,000 sq. m in 2017.
Compiling data released on the market, BREC has put together The Top 10 Romanian Biggest Office Deals in 2017. Totaling a surface of 122,553 sq. m, the top brings together companies from different sectors: auto, banking, consultancy, energy and IT &Telecom.
Based on a legacy of distinction in science, technical education and mathematics combined with Romanians’ robust language skills, the local tech sector is expanding rapidly, translating into a strong hub for IT & outsourcing. Wages in Romania remain far below the EU average, making it an enticing option for outsourcing. According to industry insiders, the tech sector – which employs about 150,000 people – is expected to double its share of GDP to 12% by 2025, aided by one of the fastest broadband internet speeds in the world (behind only Singapore, Hong Kong, South Korea and Iceland).
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- Out of the total of 122,553 sq. m, 65,153 sq. m in demand comes from the IT & Telecom sector.
- The top is dominated by the Capital City: out of the 10 deals, just one was outside of Bucharest, in Timisoara.
- Barbu Vacarescu – Pipera remains the area with the biggest density of AAA tenants, attracting 3 out of the 10 deals.
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Renault has renewed its surface in North Gate, in the biggest office deal on the market. North Gate was acquired by One United in 2017, the company forming a new office division where they have co-opted local investor, Ionut Dumitrescu.
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ING has preleased 20,000 sq. m in Blue Rose Office Park, the new project Portalnd Turst is developing in what seems to be a new office hub of Bucharest – Expozitiei. ING and Renault share the first place on the podium of the biggest deals closed in 2017.
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IBM has leased 13,600 sq. m in the first phase of The Bridge, the business park developed by Forte Partners near Basarab overpass. IBM has already moved into the new building at the end of 2017.
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Amazon was one of the new players entering the office market in 2017. Amazon Web Service, a division of the international giant, has leased 13,500 sq. m, in a new project Globalworth has recently finalized in Pipera. The company is now under a heavy recruiting process, following to hire 1,100 IT specialists.
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Oracle renewed its deal in Sky Tower, the tallest building in Romania, with 37 floors and a height of 137 meters. The office tower belonging to Raiffeisen Property International is 98% leased.
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The single transaction out of Bucharest in our top is in Timisoara. Nokia has pre-leased here 10,230 sq. m in Bega Business Park, the project developed by a family-owned company – Marius & Emil Cristescu. Nokia has become the multinational with the biggest HQ outside of Bucharest.
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Rompetrol renewed in 2017 its office contract from City Gate, the towers dominating Piata Presei Libere Sq, near Romexpo. The petroleum industry giant and one of the key players in the fuel sector in Southeast Europe has extended the contract with GTC for another 5 years.
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Bitdefender pre-leased in 2017 9,250 sq. m for its new HQ in Bucharest. The Romanian IT company will move this year 900 employees in Ordhideea Towers, the project developed by CA Immo near Basarab overpass. The two H-shaped towers, are linked together by a bridge hidden behind a glass façade.
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One of the oldest contracts in the office market is still on! Orange renewed its contract with CA IMMO for its HQ in Europe House, one of the landmark buildings in Bucharest’s CBD. Orange has been occupying the building for more than 10 years.
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According to info released on the market, PwC has signed a pre-lease of 8,000 sq. m in Ana Tower, the property developed by local business man George Copos. The info hasn’t been confirmed yet.
WHAT’S NEXT?
Uncertainty over Brexit is having an impact, with companies looking at alternatives within the EU in case the UK pursues an exit that restricts trade. London Stock Exchange is looking for 6,500 sq.m in Bucharest for 500 analysts.
Technology is expected to remain a strong sector in demand for offices in 2018: Microsoft is looking for 15,000 sq.m, Siemens is also on the market for a surface of around 5,000 sq.m, while Ericsson is rumored to make a new move in 2018 for a new office space.