Latest News  

Colliers: Outsourcing businesses, prominent pillars of the office sector

Real estate market has gained momentum and transaction volumes will be close to Euro 800 million by the end of the year, encouraged by stable economic environment and growth potential.

2015-11-24 12:26:20 - by Bogdan Tudorache

Outsourcing businesses are still the prominent pillars of the office sector, as Romania becomes more visible for reputable BPOs, SSCs and IT companies, with focus on Bucharest, but also secondary cities.

More than 60,000 people are currently employed in outsourcing activities and forecasts provision up to 150,000 in the next 5 years. Characterized by vibrant activity, office sector in Bucharest is on the verge of a new era of premium quality deliveries in what is to become a half million sqm office hub by 2020, Floreasca – Barbu Vacarescu area, according to Colliers Q3/2015 Market Report.

"Aligned with our expectations from the beginning of the year, real estate market has been characterized by general positive evolution for transactional activity for all sectors. Relying on good macroeconomics indicators, the year brought more intense consumption and higher interest in investment," says Ilinca Paun, Managing Director of Colliers International (photo).

"With take-up picking up and vacancy rates reporting low record levels, developers felt confident enough to start projects across the entire market. Industrial sector will add new stock to the static inventory registered in the past years, while investment market continues to post remarkable results this year also, with total volume expected to reach Euro 800 million by the end of the year", Paun adds.

The current year continued the growth trend begun in 2014 and saw a real estate market dominated by more courageous players. As forecasted at the beginning of the year, Romanian investment market witnessed sizable transactions value wise, exceeding Euro 100 million threshold, and international investors either entering or consolidating their positions on the local market.

Office Market

Floreasca – Barbu Vacarescu sub-market stands out as the new CBD area in Bucharest. The modern stock of buildings in the area was subject to the biggest part of the demand, with 215,000 sqm leased in the past five years. The area will continue to be in the spotlight in the years to come, 155,000 m2 GLA of office space being planned for development. Nevertheless, the competition in the sub-market becomes fiercer with each new announced development. Based on our extensive analysis, three main sources are to generate the future supply in the area: new companies entering the market, companies that will see their leasing agreements coming to maturity in the next years and those located in poor quality buildings that want to upgrade their location.

"In the past years, Romania not only has undoubtedly become an attractive destination for outsourcing industry, but has also changed the way it's being perceived by large companies. Romania is no longer seen solely as a cost-effective destination, but rather a value-added generator and valuable talent pool. Similar to previous years, in 2015 also, the business services industry has driven most of the office demand. We foresee this trend will grow stronger in the future and Floreasca-Barbu Vacarescu area alone is expected to generate up to 300,000 m2 potential demand in the next five years as renowned outsourcing companies are consolidating their business on the local market, but also new players have entered or announced their presence in Romania," said Andreea Paun, Associate Director Office Agency, Colliers International.

Investment Market

The investment market attracted new investors that will have closed by the end of the year transactions worth ca. Euro 800 million, close to the level registered in 2014 of Euro 950 million, being supported by the positive economic context and development of real estate fundamentals, and a yield crunch in competing markets. With more than 3% GDP growth expected for the end of the year, Romania outpaces other European countries and has the smallest public debt to GDP in EU, 38% compared with EU's 90% average.

Bucharest's prime yields are some of the highest in CEE capital cities and have seized investors' interest. With 7,5% yield for office sector, similar for retail and approximately 9% for industrial, with continued downwards pressure, Bucharest offers investors a wide range of high quality real estate assets.

Year to date, Colliers originated and advised on closed transactions of more than Euro 350 million, including the largest deals on the market for industrial – sale of Europolis Logistics Park, retail – sale of Auchan Titan Shopping Center and office – sale of two institutional office properties.

"2015 investment volumes are expected to be similar to that of last year, the difference being that the
market is becoming more diverse with new sources of capital being attracted by the relatively high returns achievable with high quality investments. Moreover, it is notable that large volume transactions (Euro 50 – 100 million) are taking place across all sectors: office, retail and industrial, a positive indication to investors interested to enter the market with scale. With strong asset fundamentals, capital markets liquidity improving and the still generous yield levels present in all sectors, we believe an important arbitrage opportunity is still present in Romania," said Robert Miklo, Associate Director Investment Services, Colliers International.

Bucharest Industrial Market

Industrial market resumed activity and is looking ahead at a future period of increase. For the first time in the last years, Bucharest's logistic stock is expected to increase by the end of 2016 considering that more than 100,000 sqm of new projects currently under construction will be added to the current stock. The constant volume of logistics stock has contributed to lower vacancy rate, reaching values below 8% in H1/2015 on Bucharest market. The new industrial stock will be available at sustainable rent levels ranging between 3.5 – 4.15 Euro/sqm.

"Industrial investments are entering a new era of growth as the interest in spaces and locations in Romania is rising in the late period. Not only Bucharest is seizing investors' enthusiasm, but also other large cities are rivalling the capital, such as Timisoara, Arad, Brasov, Pitesti, Sibiu, etc. The end of the year should reveal a stable and mature market, with new developers ready to consolidate their position. The new stock announced to be delivered next year stands to prove this trend," said Costin Banica, Senior Associate Industrial Agency, Colliers International.

Retail Bucharest market

Based on forecasted increase of household consumption, Bucharest is expected to sustain more than 100,000 sqm of additional non-food retail spaces by the end of 2018. Taking into account future announced projects, Bucharest will be able to sustain total retail inventory above 900,000 sqm. The stock increase will be supported by household consumption evolution which is forecasted to be on a constant upward trend in the future years, reaching 603 Euro/household/month in 2018.

"The economic stability and overall positive vibe of the market, has triggered a more confident behaviour of Romanians. This translated into higher revenues and retail market saw higher turnover volumes compared with previous year, rising up to 10-15% in 2015. This boost of confidence is also visible regarding deliveries, which have doubled this year compared with previous year," said Liana Dumitru, Associate Director Retail Agency, Colliers International.

Bucharest Land Market

North Area and Theodor Pallady have been the most active transactional areas in Bucharest in the past 2 years. Bucharest's northern part, which includes Aviatiei, Barbu Vacarescu, Caramfil, Dimitrie Pompeiu and Floreasca areas, has supported more than Euro 100 million worth investments in land plots, over 20 ha being transacted in this period of time. For Theodor Pallady, residential and retail sectors have fuelled the transactions of 50 ha in total, worth over 60 million Euro.

"We see increased transactional activity on the land market, across all segments, given the good performance of office leasing segment, of retailers and also residential sales. Aviatiei and Theodor Pallady were the most transacted areas, driving together total investments bigger than Euro 150 million, followed closely by Grozavesti-Politehnica. However, the residential land market was dynamic throughout the entire Bucharest, including the very peripheral areas with improving infrastructure. Price levels are stable and depend to a large extent on the plot destination and the status of the zoning process," concluded Sinziana Oprea, Associate Director Land Agency, Colliers International.


0 COMMENTS ^ Go back to Top
WRITE A COMMENT ^ Go back to Top
 
Your email address will not be published.
Nickname
Email
Comment
Validation Code
   
 
 
NEWS
Colliers International, designated to obtain WELL certification for Skanska's Campus 6 buildings

Pioneering in the field, Skanska is the first developer to introduce in Romania the WELL Building standard for the newest company's project developed in Bucharest, Campus 6 and its 2 and 3 office buildings, bei

 Read Full article »
Atos signs cybersecurity industry partnership with NATO

Atos, global leader in digital transformation and the NATO (North Atlantic Treaty Organization) Communications and Information Agency today sign an industry agreement to commit to a rigorous and continuous exch

 Read Full article »
Co-working segment: CBRE advises Spaces in the opening of its biggest center in Romania

CBRE, the world and local market leader in real estate consultancy, advised on the leasing transaction of 4,100 sqm office space for the largest center to be opened by Spaces in Romania.

 Read Full article »
Francesca Postolache, Partner PwC joins People in Shared Services & Outsourcing Forum on October 18, at Bucharest

Francesca Postolache, Partner PwC, joins us next Thursday to take forward major subjects such as Digital Transformation and Next-Generation Talent Development.

 Read Full article »
Telekom Romania opens in Brăila its sixth BPO center

Telekom Romania announces the opening in Braila of BPO (Business Process Outsourcing) centre dedicated to companies that need such services and which prefer to rely on a professional and experienced provider

 Read Full article »
Delphi Technologies inaugurates global IT center in Bucharest

Delphi Technologies, a leading provider of advanced propulsion solutions to automotive manufacturers has opened its first multidisciplinary global IT center in Bucharest. This new site will provide information

 Read Full article »
London Stock Exchange Group appoints Andreea Stanescu as General Manager for Romania

London Stock Exchange Group (LSEG) announced that Andreea Stanescu has been appointed General Manager, Romania. Andreea will be reporting to Dee Liyanwela, Head of Business Services Ltd (BSL) Sri Lanka and Roma

 Read Full article »
Google to offer free courses for young programmers and business incubators

Google announced the launch of the "Digital Workshop for Programmers", aimed at offering free courses to students who want to learn to program and young people who want to become technology entrepreneurs. These

 Read Full article »
ANIS scholarships gathered 35 innovative projects since launch

Employers' Association of the Software and Services Industry (ANIS) announced it registered 35 innovative projects within the first edition of its program called "ANIS' Scholarships".

 Read Full article »
Matthieu Pasquier is the new CEO of Societe Generale European Business Services

The Board of Societe Generale named Matthieu Pasquier as the new CEO of Societe Generale European Business Services, effective July 16, the company announced.

 Read Full article »
 
 
MOST READ ARTICLES
» Andrei Romanescu, Managing Director of...
» ROMANIAN OUTSOURCING AWARDS FOR EXCELL...
» Delphi Technologies inaugurates global...
» Genpact's COO: Staying ahead of the cu...
» French energy operator Total opened su...
» Ready for People in Shared Services & ...
» Grégoire Vigroux appointed the new Vi...
» Oracle reaches 4,200 employees and pla...
» Colin Lovering to moderate the talks o...
» Synergy of skills
 
EDITOR CHOICE
People in Shared Services and Outsourcing Forum, 2018: What kind of future, tomorrow will bring?

We have just concluded the fourth edition of our annual event People in Shared Services and Outsourcing Forum, the get-together of the Who's Who in the industry of business shared services in Romania.

 Read Full article »
Olga Botusan, Stefanini, keynote speaker at People in Shared Services & Outsourcing Forum on October 18, at Bucharest

This Thursday, at People in Shared Services & Outsourcing Forum 2018, Olga Botusan EMEA HR Director at Stefanini joins us to talk about Digital Transformation and Next-Generation Talent Development.

 Read Full article »
Colin Lovering to moderate the talks of People in Shared Services & Outsourcing Forum on October 18, at Bucharest

The moderator of the 4th edition of the annual event dedicated to the human resources in shared services & outsourcing industry, COLIN C. LOVERING ISM, Chairman of BRCC and Senior VP, Avison Young Real Estate i

 Read Full article »
Andrei Mihai Crăciun joins the speakers of People in Shared Services & Outsourcing Forum on October 18, at Bucharest

Andrei Mihai Crăciun the Head of office for Innovation, Technological Transfer and Intellectual Property Office from West University of Timisoara will be joining us to discuss whether the private-state actors

 Read Full article »
Sergiu Negut, on the stage of People in Shared Services & Outsourcing Forum on October 18, at Bucharest

On October 18th, Sergiu Negut joins People in Shared Services and Outsourcing Forum to share with us his ideas of ways to support the industry's human capital necessities and create a more efficient cooperation

 Read Full article »
Latest News  
 
about us | newsletter | contact | members area | GDPR policy
Copyright © 2015 by Diplomat Media Events Design by Diplomat Media Events