Pre-leased office space in H2 down 50%Publish date: 03-11-2009
Almost 25 percent of the total space due to be delivered in the second half of 2009 is pre-leased, with the occupancy rate 50 percent lower than levels posted in 2007-2008, when pre-leased spaces made up 45-60 percent of total finalized spaces, according to a study by BNP Paribas Real Estate.
"The decline in demand and newly proposed projects scheduled for delivery in H2 2009, which total some 270,000 square meters (constructed surface), will maintain the downward pressure on the level of rents for the second half of this year. However, the pace of decline will be slower than in H2 2008 and the first half of this year due to owner resistance and the fact that the profitability limit for their investments has been reached," the BNP Paribas Real Estate study indicates.
Rents charged in the first six months of this year dropped 10-15 percent for all types of buildings, in all areas, with sharper declines for offices located uptown. Moreover, BNP Paribas Real Estate specialists said that owners are increasingly offering incentives, which has led to the 10-15 percent drop in base rents and a 20-25 percent decline in net effective rent.
"In the first half of this year, the office market continued the downward trend in rents initiated in the second part of 2008, given the sharp decline in demand and the rise in the number of properties available on the market," the authors of the study said.
In the first six months of this year, the average rent charged for A class offices located downtown was a monthly €18-€20 per square meter. For B class properties located in attractive areas, rents ranged from €12-€16/sqm/month, while those for offices located in secondary areas amounted to €10-€12/sqm/month. Uptown, where transport network coverage is low, rents charged varied between €9-€11/sqm/month, in spite of the high quality standard of buildings in that area.
According to the study, the standard period for lease contracts signed in the first six months in 2009 was three years.
- Insurance market stagnated in 2013 while GDP chare dropped to 1.3%
- The Romanian Leasing Market as of December 31, 2013
- Millennium Bank reports best results since its launch, helped by stronger banking income and cost cuts
- BCR cheapens First Home loans and lowers interest loans for loans in lei
- Millennium Bank's new Salary account clients receive up to 600 lei bonus and their utility bills' payment
- GarantiBank and Seamless introduce SEQR in Romania: the newest mobile payment solution
- Bancpost telecom services, now provided exclusively by Romtelecom and COSMOTE Romania
- Millennium Bank cards offer discounts in Domo stores
- BCR Supervisory Board reshuffles Management Board
- NBR decide to lower the monetary policy rate to 4.25 percent per annum
- Common appointments in Romtelecom and COSMOTE Romania
- Up to 5.5% annual interest rate for Millennium Bank's promotional three-month lei deposit
- Eurozone in recovery mode but gap between North and South still widening
- UniCredit Tiriac Bank and RBS Romania announce the successful completion of the retail clients' migration
- Millennium Bank grants First House loans in lei