Office Space Rent Down As Much As 35%

Afraid of not being able to find solvent tenants as fast as possible, office building owners have significantly reduced their rents and have become much more flexible about lease terms. Influenced by the current market trend, owners accept to cut rents by an average of 20% in order to close the deal as soon as possible, especially if the prospective tenant is a solid company with a long reputation, ready to sign the lease for 3-to-5 years.

According to a press release from EuroMetropola, although the average discount is about 20% of last year"s rent, some owners have reduced their expectations by as much as 35% in a bid to secure good tenants and close the deal immediately. EuroMetropola exemplified with a building on Calea Calarasilor, finished in 2008, currently available for 13 EUR/sq.m., a building on Unirii Boulevard, scheduled for delivery in 2009 and available for 12 EUR/sq.m. and a building on 13 September Street, finished in 2008 and available for 20 EUR/sq.m. Office space in Dorobanti and Baneasa is available for 15-16 EUR/sq.m.

According to EuroMetropola, the construction of small office buildings, financed from private resources, and large buildings, which were pre-leased or sold as soon as works started and are now in an advanced stage, remains unaffected. Nevertheless, the overall surface of office space to be delivered this year is far below initial expectations. Even with a smaller supply, the vacancy rate is currently around 1 - 1.5%, compared to almost zero in late 2007.