EX DING BORDERS OFFICE MARKET IN 15 CEE COUNTRIES - OCTOBER 2019 - AMCHAM ROMANIA
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EX DING BORDERS OFFICE MARKET IN 15 CEE COUNTRIES October 2019
OFFICE MARKET IN 15 CEE COUNTRIES
INTRODUCTION CONTENTS
Welcome to our publication about the office sector in Central and Eastern Europe. The report presents
2
the situation in the office markets in 15 CEE countries (Albania, Belarus, Bulgaria, Croatia, Czechia, Estonia, INTRODUCTION
Hungary, Latvia, Lithuania, Montenegro, Poland, Romania, Serbia, Slovakia and Ukraine). In the study,
we focused on key market indicators such as total office stock, take-up and leasing conditions, vacancy levels,
4-5
space under construction and a forecast for the upcoming years. The presentation of the office market in each
country is also enriched with a short commentary, an interesting fact from the market and photos of modern
office projects.
The report has been divided into 3 parts:
• A map presenting 15 CEE countries with key economic data; ECONOMIC DATA
• The comparative part, where on aggregated charts we present H1 2019 office market data for 15 CEE countries;
• Presentation of the office market in each country.
In recent years, the CEE region has been characterized by dynamic development, which goes hand in hand
with the growth of modern office projects. We forecast that by 2021 the total office stock in the
15 CEE countries will exceed 30 million m2. More and more office buildings can boast of prestigious
certificates, modern technological and environmental solutions or an innovatively designed space.
6-7
OFFICE MARKET
We believe that thanks to this publication the potential of the 15 CEE countries will be rediscovered IN 15 CEE COUNTRIES IN H1 2019
and will be further developed. It is worth looking at what opportunities each country has to offer.
We hope you find this an interesting read!
8-36
15 CEE COUNTRIES
PROFILES
Albania 8
AUTHORS
Belarus 10
Bulgaria 12
Croatia 14
Czechia 16
Estonia 18
Kevin Turpin Dominika Jędrak Anna Maroń Hungary 20
Regional Director Director | Research Analyst | Research Latvia 22
of Research | CEE and Consultancy Services and Consultancy Services
+420 606 725 032 +48 666 819 242 +48 882 014 433 Lithuania 24
kevin.turpin@colliers.com dominika.jedrak@colliers.com anna.maron@colliers.com Montenegro 26
Poland 28
Romania 30
Serbia 32
Slovakia 34
Ukraine 36
2 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 3
RYNEK BIUROWY W KRAJACH CEE
ESTONIA
1 5.0%
ECONOMIC
TALLINN 2 3.9%
1.3 MILLION 3 € 1,341
LATVIA 4 46,150
1 6.5%
DATA
2 4.8%
3 € 1,036
4 80,355 1.9 MILLION
RIGA
LITHUANIA
1 5.7%
BELARUS
1 4.4%
2 3.4% 2.8 MILLION
3 € 1,263 2 3.0%
4 111,260 VILNIUS 3 € 463
4 268,100
MINSK
15
9.5 MILLION
38.4 MILLION
COUNTRIES POLAND WARSAW
1 3.8%
2 5.1% KYIV
162
CZECHIA 3 € 1,173
UKRAINE
1 1.9% 4 1,230,300
1 9.2%
PRAGUE
2 2.9% 42.2 MILLION 2 3.3%
SLOVAKIA
MILLION PEOPLE 3
4
€ 1,263
290,000 10.6 MILLION 1 5.4%
3 € 382
4 1,520,000
2 4.1%
5.4 MILLION 3 € 1,023
27
BRATISLAVA 4 133,060
HUNGARY
MILLION M2 1 3.4%
9.8 MILLION
OF EXISTING 2
3
4.9%
€ 1,100
BUDAPEST
ROMANIA
OFFICE SPACE 4 280,000
19.5 MILLION
1
2
4,0%
4,1%
3.7
ZAGREB
3 € 1,073
CROATIA 4.1 MILLION
4 531,590
1 7.1% SERBIA BUCHAREST
MILLION M
2 2.7% 1 11.7%
2 BELGRADE
BELGRADE
3 € 834 2 4.4%
UNDER CONSTRUCTION 4 160,000 3
4
€ 435
256,000 7.2 MILLION
BULGARIA
1 4.4%
MONTENEGRO 0.6 MILLION
SOFIA 7 MILLION 2 3.2%
1 15% PODGORICA
3 € 617
2 4.5%
LEGEND 4 270,380
3 € 775
1 Unemployment rate (%)
4 19,210
2 GDP growth 2017/2018 (%) TIRANA
3 Average monthly gross salary (EUR/month) POPULATION ALBANIA
4 Number of students 2.9 MILLION 1 12.1%
2 4.2%
3 € 422
4 C O LL I E R S I N T E R N AT I O N A L | P O L S K A | 2 0 1 9 5
4 113,000
OFFICE MARKET IN 15 CEE COUNTRIES
Total office stock (m2) and vacancy rate (%) New supply in H1 2019 (m2)
in H1 2019
200,000
180,000
6,000,000 12%
160,000
OFFICE
5,000,000 10% 140,000
4,000,000 8% 120,000
100,000
3,000,000 6%
80,000
2,000,000 4% 60,000
MARKET
40,000
1,000,000 2%
20,000
0 0% 0
T i nn
Pr ica
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So a
Ta fia
Vi na
W ius
eb
Bu isla e
ch va
da st
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iv
dg sk
Za w
iv
at e
ch a
st
dg k
Pr a
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ga
fia
Ti n
W na
Za s
eb
Vi w
da t
g
at d
Bu res
s
iu
Bu slav
ic
Br rad
llin
Ky
pe
Bu are
sa
Ky
pe
Po Min
sa
Ri
l li
ra
Br lgra
gr
ag
Po Min
Ri
IN 15 CEE
ra
gr
ag
So
or
ln
or
ln
ar
Ta
a
ar
lg
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Be
Be
Total stock Vacancy rate
COUNTRIES
Take-up in H1 2019 (m2) Space under construction in H1 2019 (m2)
500,000 1,000,000
400,000 800,000
IN H1 2019
300,000 600,000
200,000 400,000
100,000 200,000
0 0
da t
Pr ca
ch a
Ti n
st
w
at e
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W na
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dg k
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da t
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Bu res
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Za s
W ana
dg sk
llin
fia
ga
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Bu slav
Br rad
llin
Bu res
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Po ins
fi
Bu slav
Br rad
pe
sa
iu
Ky
i
pe
sa
gr
ag
ra
Ky
Ri
So
or
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Po in
ln
gr
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Ri
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Ta
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The total modern office stock in the 15 CEE countries In H1 2019, in all capitals of 15 CEE countries, tenants
in H1 2019 reached 27 million m2. In H1 2019 leased over 1.5 million m2 of modern office space.
developers completed 707,000 m2 , while 3.7 million The most active tenant sectors included: IT,
m2 is currently under construction. professional services and banking. The BPO/SSC
sector is also developing dynamically in the majority
The largest resources of modern office space of the 15 CEE countries. The most popular city among
were recorded in Warsaw (5.5 million m2), Budapest tenants in H1 2019 was Warsaw (almost 406,000 m2
(3.6 million m2) and in Prague (3.5 million m2). leased space), Budapest came second (243,400 m2)
Stock over 1 million m2 was noted in Bucharest and Prague third (211,030 m2).
(2.6 million m2), Sofia (2.2 million m2), Kyiv
(1.9 million m2), Bratislava (1.8 million m2), Zagreb The lowest vacancy rate was recorded in Belgrade
(1.35 million m2) and Minsk (1 million m2). (3.5%), Minsk (3.8%) and Zagreb (4.5%). The most
amount of available office space in H1 2019 was noted
The largest increase of new supply in H1 2019 in Sofia (10.2%), Bucharest (10%) and Podgorica
was noted in Bucharest with a 23% increase over the (10%).
whole 2018. Second place in terms of the amount
of new office space completed in H1 2019 was taken Currently, the largest amount of modern office space
by Sofia (91,000 m2), followed by Warsaw under construction is in Warsaw (832,730 m2),
(80,500 m2). The majority of modern office projects is Budapest (464,000 m2) and Sofia (437,000 m2).
located in the capitals of the countries, although office We forecast that in 2021 the supply of modern office
markets are also developing in regional cities. stock will exceed the level of 30 million m2.
Waltrovka, developer: Penta, Prague
6 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 7
OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
ALBANIA
LATVIA MARKET COMMENTARY
RIGA
Demand for class A office space continued unabated
LITHUANIA during H1 2019, especially for large-sized open plan
VILNIUS offices. Much of this increase in activity was driven
MINSK
by re-locations and/or expansions of international
companies on the look out for higher quality office
BELARUS space and specifically, serviced offices.
TIRANA POLAND
Tirana’s office stock remained unchanged in H1 2019,
OFFICE MARKET H1 2019
WARSAW
and reached 107,100 m2, with prime office rental
KYIV rates stable. We forecast a slight downward pressure
TOTAL STOCK: 107,110 m2 on primary rental rates over the next few quarters,
PRAGUE
UKRAINE as new projects due to be delivered to the market
NEW SUPPLY: 0 m2 in the next 12 months will increase the availability
CZECHIA
VACANCY RATE: 8.9% of office stock.
SLOVAKIA
BRATISLAVA
TAKE-UP: 330 m 2 European Trade Center (ETC Building),
Primary rents currently stand at EUR 24.50
developer: Edil-Al shpk
m2/month in the CBD and EUR 18.00 m2/month
SPACE UNDER BUDAPEST
37,230 m2 in the periphery, with secondary rates at
CONSTRUCTION: HUNGARY
ROMANIA
EUR 18.00 m2/month in the CBD and EUR 14.00
RENTAL RATES Class A: 24.50-18.00 ZAGREB
m2/month in the periphery.
(EUR/M2/MONTH): CROATIA
Class B: 18.00-14.00 BUCHAREST
BELGRADE
Kastrati Group, Balfin Group, BELGRADE
MAIN DEVELOPERS: SERBIA
Edil Al shpk, Alb Star shpk
OTHER MARKETS: Durres, Vlora MONTENEGRO
PODGORICA
SOFIA BULGARIA
TIRANA
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION
PROJECT DEVELOPER
Downtown One Project Kastrati Construction shpk
Forever Green Tower AL & GI shpk
MET Tirana Building MET Invest shpk
Twin Towers, developer: TID shpk ABA Business Center, developer: Gener 2 shpk
MARKET DATA
Total office stock (m2) evolution Take-up (m2) in Tirana (2015-2021)
and vacancy rate (%) in Tirana (2015-2021)
180,000 20%
Albania is going
through its first green
25,000
18%
16%
140,000 20,000
11.1% 12% 12% 15,000
certification process
100,000 9.8%
8.8% 9.3% 8.9%
9% 8% 10,000
60,000
4% 5,000
20,000
2015 2016 2017 2018 H1 2019 2019 2020 2021
forecast forecast forecast
0% 0
2015 2016 2017 2018 2019
forecast
2020
forecast
2021
forecast
for LEED Gold for
Downtown 1 building.
Total stock Vacancy rate
*take-up calculated as difference between occupied stock
in subsequent years Downtown One Project, developer: Kastrati Construction shpk
8 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 9
OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
BELARUS
LATVIA MARKET COMMENTARY
RIGA
Minsk office market can be characterized
LITHUANIA as a landlord market. Vacancy has been decreasing
VILNIUS over the last two years due to insignificant new
MINSK
supply comparing to growing demand. Currently
the market vacancy rate amounts to 3.8%.
BELARUS
Rents are also growing and stand at EUR 25.00-
MINSK POLAND
30.00 m²/month for class A and EUR 12.00-23.00
OFFICE MARKET H1 2019
WARSAW
m²/month for class B.
KYIV
TOTAL STOCK: 1,024,750 m2 Demand for office space is primarily driven by
PRAGUE
UKRAINE the ICT sector (information and communications
NEW SUPPLY: 37,300 m2 technology): ICT companies occupy 35% of spaces
CZECHIA
VACANCY RATE: 3.8% in speculative business centers.
SLOVAKIA
BRATISLAVA
TAKE-UP: 37,800 m 2
Class B2 office space is prevalent on the market and
amounts to 58% of the supply, class B1 occupies
SPACE UNDER BUDAPEST Riviera Business, developer: Zavod Bulbash
340,000 m2 40% of the market.
CONSTRUCTION: HUNGARY
ROMANIA
RENTAL RATES Class A: 25.00-30.00 ZAGREB
(EUR/M2/MONTH): Class B: 12.00-23.00 CROATIA
BUCHAREST
BELGRADE
Tapas Holding, Dana Holdings, BELGRADE
SERBIA
MAIN DEVELOPERS: Gazprom Transgaz Belarus,
Sigmapolus, Interservice BULGARIA
MONTENEGRO SOFIA
PODGORICA
OTHER MARKETS: Brest, Mogilev
TIRANA
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION
PROJECT DEVELOPER
MU Gazprom Center Gazprom Transgaz Belarus Volna, developer: Sigmapolus Futuris Business Center, developer: Tapas
MU Shanter Hill Interservice
MU Nezavisimostsi ave. Corporation A.N.D.
MARKET DATA Futuris Business
Total office stock (m2) evolution Take-up* (m2) in Minsk (2015-2021) Center is the first
and vacancy rate (%) in Minsk (2015-2021)
1,500,000
13.8%
16%
160,000
building in Belarus
1,200,000 12%
120,000 where multimedia
systems are
900,000 8%
7% 7%
5.5% 80,000
5%
600,000 4% 3.8% 4% 4%
300,000
2015 2016 2017 2018 H1 2019 2019 2020 2021
forecast forecast forecast
0% 40,000
2015 2016 2017 2018 2019
forecast
2020
forecast
2021
forecast
integrated directly
into the architecture.
Total stock Vacancy rate
*take-up calculated as difference between occupied stock
in subsequent years Futuris Business Center, developer: Tapas
10 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 11
OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
BULGARIA
LATVIA MARKET COMMENTARY
RIGA
In H1 2019, the supply of modern office space
LITHUANIA in Sofia marked a 4% total stock growth and
VILNIUS reached 2,202,000 m2.
MINSK
Total take-up was 66,400 m2 for the first half of the
BELARUS year. In the surveyed period, 31% of all deals were
due to relocations, expansions of companies already
SOFIA POLAND
present on the Bulgarian market (25%) and
OFFICE MARKET H1 2019
WARSAW
pre-leases (20%).
KYIV
TOTAL STOCK: 2,202,000 m2 The main sectors on the demand side were: IT and
PRAGUE
UKRAINE outsourcing (45%), professional services (16%)
NEW SUPPLY: 91,000 m2 and life sciences (8%). Average asking rental levels
CZECHIA
VACANCY RATE: 10.2% remained unchanged. For class A offices they were
SLOVAKIA
BRATISLAVA EUR 15.00 m2/month – CBD, EUR 14.00 m2/month –
TAKE-UP: 66,400 m2 Broad Center and EUR 13.00 m2/month
– for Suburbs.
SPACE UNDER BUDAPEST Telus Tower, developer: GEK Terna
437,000 m2
CONSTRUCTION: HUNGARY
ROMANIA
RENTAL RATES Class A: 13.00-15.00 ZAGREB
(EUR/M2/MONTH): Class B: 10.00 CROATIA
BUCHAREST
BELGRADE
GTC, Garitage Investment, BELGRADE
MAIN DEVELOPERS: SERBIA
Capital Fort
OTHER MARKETS: Plovdiv, Varna, Burgas MONTENEGRO SOFIA BULGARIA
Garitage Park is the
PODGORICA
first Central and Eastern
TIRANA
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION European multifunctional
PROJECT DEVELOPER
Garitage Park Garitage Investment Management
complex to have achieved
Sky Fort
Synergy Tower
Fort Noks
Bulgarian Real Estate Fund (BREF) an Excellent Final
Certificate according to Capital Fort, developer: Fort Noks
the International Scheme
MARKET DATA
of BREEAM Communities
2012. There are only 7
Total office stock (m2) evolution Take-up (m2) in Sofia (2015-2021)
and vacancy rate (%) in Sofia (2015-2021)
3,000,000
2,500,000
14.1%
12%
16%
250,000
200,000
projects registered on the
BRE (British Certification
12%
10.1% 10%
2,000,000 10% 10%
9.2% 9% 150,000
8%
Organization) website
1,500,000
4% 100,000
1,000,000
500,000
2015 2016 2017 2018 H1 2019 2019
forecast
2020
forecast
2021
forecast
0% 50,000
2015 2016 2017 2018 2019
forecast
2020
forecast
2021
forecast
that have achieved such
Total stock Vacancy rate
a final certification rating. Garitage Park, deweloper: Garitage Investment Management
12 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 13
OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
CROATIA
LATVIA MARKET COMMENTARY
RIGA Prime headline rent in Zagreb has been stable
Market is characterized by low vacancy rate during the last few years ranging from
LITHUANIA in the competitive office stock, currently standing EUR 14-15 m²/month. Average rent for class A also
VILNIUS at around 4.5%, which was last recorded in 2008. remained stable, despite drop in vacancy rate,
MINSK
Zagreb office market is characterized by strong standing at EUR 12 m²/month. Average rent
demand in class A buildings and continuous vacancy in class B buildings ranges from EUR 8-10 m²/
BELARUS rate drop due to slow delivery of new supply. month.
ZAGREB POLAND
OFFICE MARKET H1 2019
WARSAW
KYIV
TOTAL STOCK: 1,350,000 m2
PRAGUE
UKRAINE
NEW SUPPLY: 10,000 m2
CZECHIA
VACANCY RATE: 4.5% SLOVAKIA
BRATISLAVA
TAKE-UP: 9,300 m 2
SPACE UNDER BUDAPEST
27,000 m2
CONSTRUCTION: HUNGARY
ROMANIA
RENTAL RATES Class A: 12.00 ZAGREB
(EUR/M2/MONTH): CROATIA
Class B: 8.00-10.00 BUCHAREST
BELGRADE
GTC Group, VMD Group, Trius BELGRADE
MAIN DEVELOPERS: SERBIA
Nekretnine
OTHER MARKETS: Rijeka, Split MONTENEGRO
PODGORICA
SOFIA BULGARIA
TIRANA
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION
PROJECT DEVELOPER
Matrix GTC Group
R21 Croatian Insurance Company VMD Strojarska, developer: VMD Group Sky Office, developer: TEHNIKA
The highest building
MARKET DATA in Zagreb is one
Total office stock (m2) evolution Take-up (m2) in Zagreb (2015-H1 2019*) of the towers within
the VMD Strojarska
and vacancy rate (%) in Zagreb (2015-2020*)
80,000
1,400,000 16%
1,350,000
14%
12%
55,000 complex with
1,300,000
1,250,000
7.5%
4.5% 4.5% 4.5%
4% 4%
8%
4%
30,000 a rooftop bar and
1,200,000
2015 2016 2017 2018 H1 2019 2019 2020
0% 5,000
2015 2016 2017 2018 H1 2019
a 360°view of the
Capital city.
Total stock Vacancy rate forecast forecast
*latest available data *latest available data City Plaza, developer: VMD Group
14 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 15
OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
CZECHIA
LATVIA MARKET COMMENTARY
RIGA
The Prague office market continued its strong
LITHUANIA performance in H1 2019. Some 80,000 m2 of new
VILNIUS office space was delivered to the market during
MINSK
the first six months, with prospects for further
122,000 m2 to be completed before the year-end.
BELARUS
Occupier demand remained strong. Net absorption
PRAGUE POLAND
(total change in occupied stock) was positive both
OFFICE MARKET H1 2019
WARSAW
in Q1 and Q2 and remains in positive figures for
KYIV 17 consecutive quarters. Cumulatively it reached
TOTAL STOCK: 3,566,930 m2 117,000 m2 in 2019 so far, which is a 47% increase
PRAGUE
UKRAINE year on year.
NEW SUPPLY: 79,940 m2
CZECHIA
VACANCY RATE: 4.6% By mid-year, the vacancy rate in Prague was
SLOVAKIA
BRATISLAVA at 4.6%, which represents some 162,500 m2
TAKE-UP: 211,030 m2 of vacant space. This low availability is largely
in favour of landlords and puts pressure on
SPACE UNDER BUDAPEST Florentinium, developer: Penta
317,760 m2 rental growth. Current prime rent for class
CONSTRUCTION: HUNGARY
ROMANIA
A premises in the city centre is in the range
RENTAL RATES Class A: 11.50-26.75
ZAGREB
of EUR 22.00-22.50 m2/month with prospects
(EUR/M2/MONTH): CROATIA for further growth.
Class B: 7.65-20.50 BUCHAREST
BELGRADE
Crestyl, Skanska, Penta, J&T, BELGRADE
There are also some trophy assets in the city
MAIN DEVELOPERS: SERBIA
AFI Europe centre with exceptional build quality which have
MONTENEGRO BULGARIA rents higher than the quoted prime, and similarly
OTHER MARKETS: Brno SOFIA
PODGORICA some pipeline projects have higher asking rents.
Rental growth is spreading from city centre to other
TIRANA
submarkets as well. With the current pipeline and
demand level we do not see room for significant
ALBANIA
LARGEST PROJECTS vacancy increase; therefore, we expect the rental
growth to continue. By the year end, the prime rent
UNDER CONSTRUCTION could increase to EUR 23 m2/month.
PROJECT DEVELOPER
Harfa Office Center Kaprain Waltrovka, developer: Penta
Bořislavka KKCG Butterfly Karlín by AFI
Dock In Five Crestyl
Europe: the office building
with the largest vertical
MARKET DATA garden in Europe. The
Total office stock (m2) evolution Take-up (m2) in Prague (2015-2021)
facade of the building is
and vacancy rate (%) in Prague (2015-2021)
planted with 41,000 plants
in 584 small „gardens“,
5,000,000 14.6% 16% 560,000
4,000,000 10.6% 12% 520,000
3,000,000 7.5% 8% 480,000
covering the area of
2,000,000 5.1% 4.6% 4%
4.8% 5.1%
4% 440,000 1,500 m2. Designed by
1,000,000
2015 2016 2017 2018 H1 2019 2019 2020 2021
forecast forecast forecast
0% 400,000
2015 2016 2017 2018 2019 2020 2021 David R. Chrisholm of CMC
forecast forecast forecast
Architects.
Total stock Vacancy rate
Butterfly Karlin, developer: AFI Europe
16 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 17
OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
ESTONIA
LATVIA MARKET COMMENTARY
RIGA
The office market in Tallinn has continued
LITHUANIA to demonstrate consistent activity during the last six
VILNIUS and a half years, resulting in buoyant demand and
MINSK
high development activity.
BELARUS By Q2 2019, the estimated total stock (speculative
+ built-to-suit) of modern office facilities was
TALLINN POLAND
approaching ca. 1 million m2. New total supply
OFFICE MARKET H1 2019
WARSAW
delivered to the market reached ca. 94,400 m2
KYIV in 2018 and 13,200 m2 in H1 2019.
TOTAL STOCK: 969,300 m2
PRAGUE
UKRAINE Development activity is seen both in the CBD and
NEW SUPPLY: 13,200 m2 well-developed citywide office subareas (e.g.
CZECHIA
VACANCY RATE: 5.2% Ülemiste City) as well as in new developing areas
SLOVAKIA
BRATISLAVA (e.g. Tallinn harbour area, Telliskivi Quarter).
TAKE-UP: 26,400 m 2
In H1 2019, rental rates for properties in good locations
SPACE UNDER BUDAPEST Maakri Quarter, developer: Maakri Kvartal
130,000 m2 remained more or less stable, although the gap
CONSTRUCTION: HUNGARY
ROMANIA
between the lower and upper margins of asking rents
RENTAL RATES Class A: 14.00-18.00
ZAGREB
continued to widen, seeing an increase in the upper
(EUR/M2/MONTH): CROATIA margins of asking rents.
Class B: 11.00-15.00 BUCHAREST
BELGRADE
Technopolis Ülemiste, Porto BELGRADE
SERBIA The vacancy rate in speculative class A and class
Franco, Fausto, Mainor B1 new buildings remains considerably low (below
MAIN DEVELOPERS:
Ülemiste, Fund Asset, Kawe, MONTENEGRO BULGARIA 6%), indicating a good absorption ratio for new office
SOFIA
Capital Mill PODGORICA premises. Some increase in vacancy rates (as well
as some downward pressure on rents) were observed
OTHER MARKETS: Tartu in several existing older class B1 office buildings
TIRANA
in various locations across the city.
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION
Tammsaare Business Centre, developer: Kaamos
PROJECT DEVELOPER In Tallinn there is Ülemiste
Porto Franco
Fahle Park
Porto Franco
Fausto Capital
City, the largest Smart City
Sepapaja 1, Ülemiste City Technopolis Ülemiste in the Baltics and biggest
privately owned business
MARKET DATA campus in Northern Europe.
More than 15% of total
Total office stock (m2) evolution Take-up (m2) in Tallinn (2015-2021)
and vacancy rate (%) in Tallinn (2015-2021) modern speculative office
space in Tallinn is located
100,000
1,400,000 8%
6.2% 80,000
1,000,000 5.4% 5.3% 5.6%
5% 5.1%
5.6%
6% 6%
60,000
in Ülemiste City.
600,000
4%
40,000
An interesting fact is that
Ülemiste City probably has
2%
200,000 0% 20,000
2015 2016
Total stock
2017
Vacancy rate
2018 H1 2019 2019 2020 2021
forecast forecast forecast
2015 2016 2017 2018 2019
forecast
2020
forecast
2021
forecast the closest office campus to
an international airport. Ülemiste City, developers: Technopolis Ülemiste and Mainor
18 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 19OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
HUNGARY
LATVIA MARKET COMMENTARY
RIGA
At the end of 2019 H1, the total office stock
LITHUANIA in Budapest exceeded the 3.6 million m2
VILNIUS out of which 3.0 million m2 is speculative stock.
MINSK
The total market vacancy rate reached a record-low
BELARUS level of 6.3%. The speculative vacancy rate
is currently 7.6%, with class A office vacancy rate
BUDAPEST POLAND
of 5.0%, and class B rate of 13.6%.
OFFICE MARKET H1 2019
WARSAW
KYIV The market remained landlord driven in 2019, and
TOTAL STOCK: 3,654,200 m2 this trend is expected to continue at least through
PRAGUE
UKRAINE 2020 unless there is a major change in the overall
NEW SUPPLY: 31,700 m2 economic environment.
CZECHIA
VACANCY RATE: 6.3% SLOVAKIA
BRATISLAVA The largest deals are usually closed by tenants active
TAKE-UP: 243,400 m2 in the IT, financial and pharmaceutical sectors and
by state related occupiers. Among large international
SPACE UNDER BUDAPEST Promenade Gardens, developer: Horizon Development
464,000 m2 tenants, we continue to see the dominance
CONSTRUCTION: HUNGARY
ROMANIA
of SSC/BPO related occupiers.
ZAGREB
RENTAL RATES Class A: 13.00-25.00
CROATIA The speculative office pipeline under construction
(EUR/M2/MONTH): Class B: 10.00-17.00 BUCHAREST
BELGRADE
and planned for delivery by 2021 totals 404,000 m2,
BELGRADE
HB Reavis, GTC, Skanska, SERBIA out of which 95,000 m2 office space is expected to
MAIN DEVELOPERS: Atenor, Futureal, Codic, Wing, be handed over by the end of 2019.
Property Market MONTENEGRO SOFIA BULGARIA
PODGORICA The Váci Corridor submarket remained the most
OTHER MARKETS: Debrecen sought-after location in H1 2019 period, both
TIRANA
in terms of leasing activity (33% of the TLA
in H1 2019 period) and the development pipeline
ALBANIA
(50% of the Budapest’s development pipeline will
LARGEST PROJECTS be handed over in this submarket).
UNDER CONSTRUCTION
PROJECT DEVELOPER Mill Park, developer: Skanska
Agora Tower and Hub HB Reavis
Váci Greens (building E&F) ATENOR
Millenium Gardens TriGranit
MARKET DATA The existing class
Total office stock (m2) evolution Take-up (m2) in Budapest (2015-2021) A office stock
is expected to expand
and vacancy rate (%) in Budapest (2015-2021)
by at least 20%
600,000
5,000,000 14%
12.1%
12%
4,000,000 9.5% 500,000
10%
until the end of
7.5% 8% 8%
3,000,000 7.3% 7% 7.5% 400,000
6.3% 6%
2,000,000 4% 300,000
2021, due to the rich
2%
1,000,000 0% 200,000
2015 2016 2017 2018 H1 2019 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021
forecast forecast forecast
development pipeline.
Total stock Vacancy rate forecast forecast forecast
Telekom building, developer: Wing
20 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 21OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
LATVIA
LATVIA MARKET COMMENTARY
RIGA
For several years the development of the Riga office
LITHUANIA market has been slow. Slow development volumes
VILNIUS have led to the situation that around 73% of the
MINSK
professional office stock is older than 10 years.
However, as of now several projects are under
BELARUS construction and a number of projects have been
announced. Also, interest from new developers has
been observed.
RIGA POLAND WARSAW
OFFICE MARKET H1 2019 KYIV This year already 42,200 m2 have been delivered
and currently 73,900 m2 are under construction.
TOTAL STOCK: 719,550 m2 PRAGUE
UKRAINE An additional 16 projects with a total area of more
NEW SUPPLY: 42,200 m 2 than 275,000 m2 are in the planning stages with
CZECHIA
a high probability of being transferred to active
SLOVAKIA
VACANCY RATE: 7.4% BRATISLAVA construction stages in the next 2 years. Riga still
Origo One, developer: Linstow
does not have a CBD, but most of the development
TAKE-UP: 20,050 m2 is currently planned for the Kipsala, Skanste and
BUDAPEST
SPACE UNDER VEF/Teika business districts.
HUNGARY
73,900 m 2
CONSTRUCTION: ROMANIA
ZAGREB
Take-up activity in the recent year has been lower
RENTAL RATES Class A: 14.00-16.00 CROATIA than anticipated and we can expect that vacancy
BUCHAREST
(EUR/M2/MONTH): Class B: 10.00-13.50 BELGRADE
levels will increase once the new projects enter the
BELGRADE
SERBIA market as the amount of office space pre-leased
Hanner, Vastint, Linstow, during the construction stages is relatively low.
MAIN DEVELOPERS: LNK, Kapitel, M.M.M. projektai, Currently, vacancy levels vary between 4-10%
MONTENEGRO BULGARIA
Eastnine PODGORICA
SOFIA
depending on the office class while the market rent
rates remain stable. The highest demand for office
OTHER MARKETS: -
TIRANA
space for the last 3 years remains from professional
service companies (GBS, including SSC and BPO
ALBANIA
companies), however mostly through expansions
LARGEST PROJECTS as only a few new companies enter the market
every year.
UNDER CONSTRUCTION
PROJECT DEVELOPER Jaunā Teika, developer: Hanner
Z-Towers
Jaunā Teika 4th stage Henrihs
Towers Construction Management
Hanner The Pine – the first
Origo One Linstow
office building in Riga
to be constructed out
MARKET DATA
of wood and the first
in the Baltics to qualify
Total office stock (m2) evolution Take-up (m2) in Riga (2015-2021)
and vacancy rate (%) in Riga (2015-2021)
1,000,000
10.5%
12%
10% 50,000
for WELL Building
Standard, additional
800,000
8% 8% 40,000
7.4% 7.5%
600,000 5.7% 6%
4.9%
to LEED Platinum,
4.5% 30,000
4.2% 4%
400,000
20,000
2%
200,000
2015 2016 2017 2018 H1 2019 2019 2020 2021
forecast forecast forecast
0% 10,000
2015 2016 2017 2018 2019
forecast
2020
forecast
2021
forecast
is currently in planning
phase by Eastnine.
Total stock Vacancy rate
The Pine, developer: Eastnine
22 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 23OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
LITHUANIA
LATVIA MARKET COMMENTARY
RIGA
The Vilnius office market observes active
LITHUANIA development of new projects – 26,450 m2 of new
VILNIUS office space was completed in H1 2019, while
MINSK
a pipeline amounting to as much as 225,140 m2
is under construction.
BELARUS
New modern supply is further raising quality
VILNIUS POLAND
standards as well as bringing greater emphasis
OFFICE MARKET H1 2019
WARSAW
on sustainability and innovation. This is in line with
KYIV the needs and expectations of tenants and today’s
TOTAL STOCK: 702,020 m2 workforce, resulting in the entry of new international
PRAGUE
UKRAINE players.
NEW SUPPLY: 26,450 m2
CZECHIA
VACANCY RATE: 5.3% Although demand for office space is strong, rapid
SLOVAKIA
BRATISLAVA expansion is expected to affect vacancy levels in the
TAKE-UP: 35,800 m2 market, with the greatest impact on older business
centres.
SPACE UNDER BUDAPEST Business Stadium West BC, developer: Hanner
225,140 m2
CONSTRUCTION: HUNGARY
ZAGREB
ROMANIA
RENTAL RATES Class A: 14.70-16.50 CROATIA
(EUR/M2/MONTH): Class B: 6.60-13.50 BUCHAREST
BELGRADE
BELGRADE
SERBIA
Technopolis, M.M.M. projektai,
MAIN DEVELOPERS:
Hanner, Darnu Group, Vastint MONTENEGRO BULGARIA
SOFIA
PODGORICA
OTHER MARKETS: Kaunas, Klaipeda
TIRANA
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION
PROJECT DEVELOPER Quadrum BC, developer: Schage Real Estate S7 BC (stage I), developer: M.M.M. projektai
Business Garden Vilnius (stage I) Vastint
Nova BC Technopolis
Business Stadium North BC Hanner
41% of the stock
MARKET DATA in Vilnius is BREEAM
Total office stock (m2) evolution Take-up (m2) in Vilnius (2015-2021) or LEED certified.
Quadrum BC is
and vacancy rate (%) in Vilnius (2015-2021)
1,200,000 8%
the first building in
7.5%
100,000
1,000,000 6.5%
6.3% 6%
5.3% 5.3% 80,000
800,000 4.3% 4.3% 5%
Lithuania to achieve
4%
600,000 60,000
2% 40,000
400,000
200,000
2015 2016 2017 2018 H1 2019 2019 2020 2021
forecast forecast forecast
0% 20,000
2015 2016 2017 2018 2019 2020 2021
a BREEAM New
Construction certificate.
Total stock Vacancy rate forecast forecast forecast
Quadrum BC, developer: Schage Real Estate
24 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 25OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
MONTENEGRO
LATVIA MARKET COMMENTARY
RIGA
In the past decade Montenegro has shown
LITHUANIA considerable growth, and many consider the country
VILNIUS to be one of the fastest rising tourism markets in the
MINSK
world. With its stable economic growth over the past
few years, it is sure to continue to attract foreign
BELARUS investments in the foreseeable future.
PODGORICA POLAND
Modern class A office buildings include
OFFICE MARKET H1 2019
WARSAW
Europoint, Normal Tower, Capital Plaza, Cijevna
KYIV Komerc/Societe General headquarter, Millennium
TOTAL STOCK: 69,010 m2 Center and Celebic Business Center.
PRAGUE
UKRAINE
NEW SUPPLY: 0 m2 Demand for office space in Podgorica significantly
CZECHIA
VACANCY RATE: 10% increased in 2019 compared to the previous years.
SLOVAKIA
BRATISLAVA The vacancy rate in Podgorica is around 10%, with
TAKE-UP: 62,110 m 2
expectation of stabilization below 10% by the end
of 2019 when the new developments are properly
SPACE UNDER BUDAPEST Čelebić City Center, developer: Čelebić
15,000 m2 absorbed.
CONSTRUCTION: HUNGARY
ROMANIA
RENTAL RATES Class A: 16.50
ZAGREB
Rental levels for modern office space in Podgorica
(EUR/M2/MONTH): CROATIA range between EUR 14.00 – 22.00 m²/month.
Class B: 12.50 BUCHAREST
BELGRADE
Class A office buildings in good locations can be
MAIN DEVELOPERS: Zeta Gradnja BELGRADE
SERBIA rented at EUR 17.00 m²/month. Lower quality office
space varies between EUR 10.00 – 14.00 m²/month.
OTHER MARKETS: -
MONTENEGRO BULGARIA
The most interesting
SOFIA
PODGORICA
TIRANA
structure is the Europoint
building, located close to
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION the Morača river. What sets
PROJECT DEVELOPER the office building apart Capital Plaza, developer: Abu Dhabi Capital Investment
Business Center
Office building
Čelebić
Zeta Gradnja
from others is its energy
Office building Normal Company
efficiency. The building
has 8,890 m2 of available
MARKET DATA office space, and has heat
pumps installed to utilize the
Total office stock (m2) evolution Take-up (m2) in Podgorica (2015-2021)
and vacancy rate (%) in Podgorica (2015-2021) ground water of the River
120,000 15% 15% 15% 16% 80,000 Morača as a heat source.
105,000
90,000 10% 10% 10% 10% 10%
12%
60,000
This helps to reduce the
75,000
8%
40,000
energy required for heating,
ventilation, air conditioning
4%
60,000
45,000 0% 20,000
2015 2016
Total stock
2017 2018
Vacancy rate
H1 2019 2019 2020 2021
forecast forecast forecast
2015 2016 2017 2018 2019
forecast
2020
forecast
2021
forecast
and water heating.
Europoint, developer: Proinvest
26 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 27OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
POLAND
LATVIA MARKET COMMENTARY
RIGA
LITHUANIA High demand and lower new supply compared
VILNIUS to H1 2018 caused a growing deficit of office space
MINSK
in Warsaw. The supply gap is visible especially
in central zones, where the vacancy rate at the
BELARUS end of H1 2019 was 5.6%. We predict that rental
rates for office projects in these zones will gradually
WARSAW POLAND
increase.
OFFICE MARKET H1 2019
WARSAW
KYIV Currently, there are approximately 40 office buildings
TOTAL STOCK: 5,543,680 m2 under construction in Warsaw with a total area
PRAGUE
UKRAINE of over 832,700 m2, which will gradually fill the supply
NEW SUPPLY: 80,540 m2 gap in the next 24 months. The largest projects
CZECHIA
VACANCY RATE: 8.5% include Varso Place, The Warsaw HUB and Mennica
SLOVAKIA
BRATISLAVA Legacy Tower.
TAKE-UP: 405,950 m2
The office supply in regional cities is growing faster
SPACE UNDER BUDAPEST
832,730 m2 than in Warsaw. In H1 2019, developers delivered
CONSTRUCTION: HUNGARY
ROMANIA
241,300 m2 of modern office space, and 844,100 m2
RENTAL RATES Class A: 14.00-24.00 ZAGREB
is under construction.
(EUR/M2/MONTH): Class B: 12.00-18.00 CROATIA
BUCHAREST
BELGRADE
In H1 2019, there was also rapid growth in the flexible
Skanska Property Poland, BELGRADE
and coworking space market, which offers Warsaw Spire, developer: Ghelamco
SERBIA
MAIN DEVELOPERS: Ghelamco, HB Reavis, an alternative to long-term lease for young
Cavatina, PHN, BULGARIA entrepreneurs, start-ups, freelancers and increasingly
MONTENEGRO SOFIA
PODGORICA often for corporations. International coworking
Kraków, Wrocław, Trójmiasto,
operators will continue their expansion outside the
OTHER MARKETS: Katowice, Łódź, Poznań, capital, targeting the largest office markets in Poland.
TIRANA
Szczecin, Lublin
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION
PROJECT DEVELOPER
Varso Place
The Warsaw HUB
HB Reavis
Ghelamco
Varso Place - the
Mennica Legacy Tower Mennica Poland/Golub
Gethouse highest project in the
MARKET DATA European Union is
Total office stock (m2) evolution Take-up (m2) in Warsaw (2015-2021) under construction
and vacancy rate (%) in Warsaw (2015-2021)
7,000,000
14.2%
16% 900,000 in Warsaw (310 m).
12.3%
The complex is
860,000
11.7% 12% 12%
5,000,000
9% 10% 820,000
8.7% 8%
8%
780,000
planned to be
3,000,000
4%
740,000
1,000,000 0% 700,000
completed in 2021.
2015 2016 2017 2018 H1 2019 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021
forecast forecast forecast forecast forecast forecast
Total stock Vacancy rate
Varso Place, developer: HB Reavis
28 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 29OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
ROMANIA
LATVIA MARKET COMMENTARY
RIGA
With a modern office stock of around 2.6 million m2
LITHUANIA in mid-2019 (excluding significant surfaces of
VILNIUS owner-occupied buildings), Bucharest is arguably
MINSK
one of the most dynamic markets in the CEE region.
Of course, this is closely related to the labour force,
BELARUS which offers a nice mix of good skills (including
sought-after foreign languages) as well as much
BUCHAREST POLAND
lower costs than in Western Europe. But this might
OFFICE MARKET H1 2019
WARSAW
be true for a lot of other cities in the region, but
KYIV Romania and Bucharest do have a couple of things
TOTAL STOCK: 2,603,500 m2 that set it apart from other peers and even other
PRAGUE
UKRAINE more developed markets in Europe: a very strong
NEW SUPPLY: 185,000 m2 IT&C community.
CZECHIA
VACANCY RATE: 10% SLOVAKIA
BRATISLAVA The Bucharest office market is currently enjoying
TAKE-UP: 188,300 m 2
a growth spurt in terms of supply, with the leasable
area of buildings coming online in 2019 and 2020
SPACE UNDER BUDAPEST Oregon Park, developer: Portland Trust
358,400 m2 representing a quarter of the existing market. While
CONSTRUCTION: HUNGARY
ROMANIA
this process is likely to pressure the vacancy rate
RENTAL RATES Class A: 18.00 ZAGREB
a bit, it is worth underscoring that Bucharest still
(EUR/M2/MONTH): CROATIA has quite a lot of stock built about a decade ago and
Class B: 11.00 BUCHAREST
BELGRADE
part of it would not meet today’s qualitative/technical
Globalworth, AFI Europe, BELGRADE
SERBIA standards.
Skanska, Portland Trust,
MAIN DEVELOPERS:
Vastint, Forte Partners, One MONTENEGRO BULGARIA Consequently, vacancy tends to vary quite a lot from
SOFIA
United PODGORICA submarket to submarket and even between projects
in the same submarket. Furthermore, on a relative
OTHER MARKETS: Cluj-Napoca, Timisoara, Iasi (per capita) basis, Bucharest’s office surface
TIRANA
is still some 30% below Warsaw’s, which is also
ALBANIA
significantly below other Western European markets,
LARGEST PROJECTS so there might still be quite a lot of room to grow.
UNDER CONSTRUCTION
PROJECT DEVELOPER AFI Park, developer: AFI Europe
Campus Globalworth
Campus 6 Skanska
Expo Business Park Portland Trust
MARKET DATA The Bucharest office
Total office stock (m2) evolution
and vacancy rate (%) in Bucharest (2015-2021)
Take-up (m2) in Bucharest (2015-2021) market is the fastest
4,000,000
14% 14%
14%
15%
16% 400,000 growing among the
CEE capitals, with the
14%
3,500,000
12% 12%
3,000,000 9.8% 9.5%
10% 10% 300,000
2,500,000
2,000,000
8%
6%
200,000
modern office stock up
by over 10% in the year
4%
1,500,000
2%
1,000,000 0% 100,000
ending June 2019.
2015 2016 2017 2018 H1 2019 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021
forecast forecast forecast forecast forecast forecast
Total stock Vacancy rate
Hermes Business Campus, developer: Atenor
30 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 31OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
SERBIA
LATVIA MARKET COMMENTARY
RIGA
Demand for high-quality modern business premises
LITHUANIA remains relatively high when compared to the
VILNIUS available space. This has in turn resulted in quick
MINSK
absorption of previously delivered projects within
the CBD area and has led to favorable market
BELARUS conditions for landlords, who still retain precedence
in negotiations. A constant high demand during this
BELGRADE POLAND
period has resulted in even lower vacancy rates,
OFFICE MARKET H1 2019
WARSAW
reaching levels as low as 2-3% in the prime market.
KYIV
TOTAL STOCK: 772,000 m2 Office construction is at a historic high and changes
PRAGUE
UKRAINE in market parameters are expected when all of these
NEW SUPPLY: 40,110 m2 projects are delivered. There is currently over
CZECHIA
VACANCY RATE: 3.5% 180,000 m² in the active pipeline, which will result
SLOVAKIA
BRATISLAVA in an increase of prime office stock by ca. 25% until
TAKE-UP: 40,000 m 2
2021. There has also been a greater focus
on Downtown Belgrade, following stronger demand
SPACE UNDER BUDAPEST Usce Tower, developer: MPC Properties
202,000 m2 from tenants for this part of the city.
CONSTRUCTION: HUNGARY
ROMANIA
RENTAL RATES Class A: 14.00-17.00
ZAGREB
Headline rents within class A and class B office
(EUR/M2/MONTH): CROATIA buildings in Belgrade have remained stable throughout
Class B: 11.00-13.00 BUCHAREST
BELGRADE
2018 and slight increase is expected in 2019. Service
GTC, MPC Properties, Erste BELGRADE
charges have remained stable in the previous
MAIN DEVELOPERS: SERBIA
Group Immorent, AFI Groupl 18 months, and range EUR 4.00- 4.50 m²/month.
MONTENEGRO BULGARIA Rental values are expected to remain stable until the
OTHER MARKETS: Novi Sad, Nis SOFIA
PODGORICA delivery of new office stock, which is currently under
construction.
TIRANA
ALBANIA
LARGEST PROJECTS
UNDER CONSTRUCTION
PROJECT DEVELOPER Blue House, developer: Blue Center
Green Heart GTC
NCR Kampus Merin Holdings
Navigator 2 MPC Properties
The vacancy rate in
MARKET DATA the Belgrade office
Total office stock (m2) evolution Take-up (m2) in Belgrade (2015-2021) market is amongst
and vacancy rate (%) in Belgrade (2015-2021)
1,200,000
1,000,000 8.5%
10% 10%
12%
10%
120,000
the lowest in Europe,
currently standing
7% 8% 100,000
800,000 7%
6%
600,000 4% 5%
4%
at 3.5%.
80,000
3.5%
400,000
2%
200,000 0% 60,000
2015 2016 2017 2018 H1 2019 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021
forecast forecast forecast forecast forecast forecast
Total stock Vacancy rate
GTC 41,developer: GTC
32 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 33OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
SLOVAKIA
LATVIA MARKET COMMENTARY
RIGA
The office market in Bratislava is undergoing a rapid
LITHUANIA expansion with 51,000 m2 being added to the modern
VILNIUS office stock in H1 2019 and more than 133,000 m2
MINSK
currently under active construction waiting
to be delivered throughout 2019-2020. Growing
BELARUS supply results in a slight increases in vacancy rates,
even though the decline in occupancy is rather
BRATISLAVA POLAND
subtle.
OFFICE MARKET H1 2019
WARSAW
KYIV Demand remains healthy with most of the take up
TOTAL STOCK: 1,826,690 m2 traditionally being attributed to IT and Professsional
PRAGUE
UKRAINE Services. In terms of the volume by transaction type,
NEW SUPPLY: 51,000 m2 most of the deals include prolongations, new leases
CZECHIA
VACANCY RATE: 8.1% and pre-leases.
SLOVAKIA
BRATISLAVA
TAKE-UP: 110,590 m 2
Rental rates remain stable with quoted rents for
prime premises usually being higher than the actual
SPACE UNDER BUDAPEST Nivy Tower, developer: HB Reavis
133,110 m2 contracted rents. Current market trends dictate an
CONSTRUCTION: HUNGARY
ROMANIA
increasing focus on tenant’s needs leading to the
RENTAL RATES Class A: 14.50
ZAGREB
growh in popularity of the flexible offices concept.
(EUR/M2/MONTH): CROATIA
Class B: 12.50 BUCHAREST
There is a current
BELGRADE
MAIN DEVELOPERS: HB Reavis, J&T, Penta BELGRADE
SERBIA
OTHER MARKETS: Košice
market trend towards
MONTENEGRO SOFIA BULGARIA
PODGORICA
TIRANA
ALBANIA
the renovation of old
LARGEST PROJECTS
UNDER CONSTRUCTION
industrial properties
PROJECT DEVELOPER into modern and Part of Bratislava’s new CBD, source: JTRE
vibrant office spaces.
Sky Park Phase I Penta Investments
Nivy Tower HB Reavis
Tower 5 (NFŠ) NFŠ, a.s.
One example of that
MARKET DATA is the mixed use
Total office stock (m2) evolution Take-up (m2) in Bratislava (2015-2021) project Pradiareň
and vacancy rate (%) in Bratislava (2015-2021)
2,000,000
12% 1900, involving the
refurbishment of the
8.8% 10% 10% 10%
250,000
1,800,000
7% 8.1% 8% 8%
6% 6% 200,000
1,600,000
former Bratislava
6%
1,400,000 150,000
4%
1,200,000 2% 100,000
1,000,000
2015 2016 2017 2018 H1 2019 2019 2020 2021
forecast forecast forecast
0% 50,000
2015 2016 2017 2018 2019
forecast
2020
forecast
2021
forecast
Thread Factory Source: developer’s website yit.sk
("Pradiareň 1900").
Total stock Vacancy rate
Pradiareň 1900, developer: YIT
34 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 35OFFICE MARKET IN 15 CEE COUNTRIES
TALLINN
ESTONIA
UKRAINE
LATVIA MARKET COMMENTARY
RIGA
There has been a revival in the office rental market,
LITHUANIA both from tenants seeking to improve their working
VILNIUS conditions by moving from older to newer offices,
MINSK
and from developers starting to build or design
new business centres. Similarly to Q1 2019, there
BELARUS is a lack of office space. Currently, for those
considering relocation to a 5,000 m² office in the
KYIV POLAND
central business district, the supply is limited to
OFFICE MARKET H1 2019
WARSAW
a few office buildings.
KYIV
TOTAL STOCK: 1,916,500 m2 The vacancy rate will continue to gradually decline.
PRAGUE
UKRAINE New office supply commissioned in 2019 will
NEW SUPPLY: 18,500 m2 amount to approximately 88,000 m², which is the
CZECHIA
VACANCY RATE: 6% largest increase in the last 5 years. However, even
SLOVAKIA
BRATISLAVA this volume of new supply will not fully satisfy the
TAKE-UP: 90,000 m 2
existing demand within the office market.
UNDER CONSTRUCTION BUDAPEST Guliver BC, developer: TRI O LLC
70,000 m2 The trend towards a moderate increase in rental
AREA: HUNGARY
ROMANIA
rates will continue in the next 6 months. It should
RENTAL RATES
ZAGREB
Class A: 19.60-26.70 also be noted that the active development of
(EUR/M2/MONTH): CROATIA innovation parks (such as: UNIT.City, Innovation
Class B: 12.50-18.70 BUCHAREST
BELGRADE
District IT Park, Manufactura, and LvivTech.City),
KAN Development, INOR, SERBIA
BELGRADE
and the emergence of large co-working centers in
MAIN DEVELOPERS: MERX REAL ESTATE, FMG, traditional office buildings demonstrate that the trend
UFuture, TRK EngineeringMONTENEGRO BULGARIA towards collaborative office spaces is on the rise.
SOFIA
PODGORICA
OTHER MARKETS: Lviv, Dnipro
TIRANA
ALBANIA
UNIT.City is Ukraine’s first
LARGEST PROJECTS innovation park. It is one of
UNDER CONSTRUCTION
PROJECT DEVELOPER
the biggest platforms merging
IQ BC, developer: KAN Development
25 Zhilyanskaya St. INOR
exceptional infrastructure and
137-139 Velyka Vasylkivska St. Vector an innovation ecosystem for
4 Korolenska St. TRK Engineering
IT and technology companies
in Central and Eastern Europe
MARKET DATA (CEE). Located in Kyiv,
UNIT.City sits on 25 ha, just
Total office stock (m2) evolution
and vacancy rate (%) in Kyiv (2015-2020*)
Take-up (m2) in Kyiv (2015-2019*)
220,000 6 km from the city center and
180,000
forms an entire city block of
2,500,000 17.5%
14.4%
20%
mixed-use real estate: offices,
residential properties, innovative
2,000,000 15% 140,000
educational institutions, R&D
1,500,000 10%
7.6% 100,000
6.5% 6%
1,000,000 5.5% 5%
centers, VR and AR laboratories,
5%*
500,000 0% 60,000
2015 2016
Total stock
2017
Vacancy rate
2018 H1 2019 2019
forecast
2020
forecast
2015 2016 2017 2018 2019
forecast and 3D-printing and additive
*latest available data *latest available data manufacturing facilities. UNIT.City, developer: UDP
36 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 37OFFICE MARKET IN 15 CEE COUNTRIES
CONTACTS
CEE EMEA LATVIA
Luke Dawson Damian Harrington Deniss Kairans Toms Andersons
Managing Director Director | Head of EMEA Research Partner I Managing Director Director I Research and Advisory
and Head of Capital Markets | CEE Phone +44 7867 360489 Phone +371 6778 33 33 Phone +371 677 833 33
Phone +420 739 571 597 damian.harrington@colliers.com colliers.latvia@colliers.com Toms.Andersons@colliers.com
luke.dawson@colliers.com
ALBANIA LITHUANIA
Stela Dhami Manjola Çondi Ramune Askiniene Diana Lebedenko
Managing Partner Senior Associate Partner | Managing Director Senior Market Analyst | Consultancy
Phone +355 69 20 22 575 Valuation | Advisory Services Phone +370 5 249 1212 Department
stela.dhami@colliers.com Phone +355 69 22 11 578 ramune.askiniene@colliers.com Phone +370 5 249 1212
manjola.condi@colliers.com diana.lebedenko@colliers.com
BELARUS MONTENEGRO
Denis Chetverikov Darya Lapitskaya Milovan Novaković Nikola Kostić
Partner | Managing Director Associate Director of Research Managing Director MRICS Manager I Commercial Agency
Phone +375 172 569 569 and Advisory Department Phone +38 26 938 8814 Phone +38 26 938 8813
denis.chetverikov@colliers.com Phone +375 172 569 569 milovan.novakovic@colliers.com nikola.kostic@colliers.com
darya.lapitskaya@colliers.com
BULGARIA POLAND
Verka Petkova Adriana Toncheva Monika Rajska-Wolińska MBA, MRICS Paweł Skałba
Partner I Director I Business Senior Consultant | Managing Partner | EMEA Board Senior Partner
Development Research and Marketing Member Director of Office Agency
Phone +359 896 777 614 Phone +359 896 777 686 Phone +48 668 139 759 Phone +48 602 258 435
verka.petkova@colliers.com adriana.toncheva@colliers.com monika.rajska@colliers.com pawel.skalba@colliers.com
CZECHIA ROMANIA
Tewfik Sabongui Ondrej Vlk Laurentiu Lazar MRICS Silviu Pop
Managing Partner Head of Research Managing Partner Head of Research
Phone +420 777 150 669 Phone +420 602 940 066 Phone +40 722 308 309 Phone +40 721 176 701
tewfik.sabongui@colliers.com ondrej.vlk@colliers.com laurentiu.lazar@colliers.com silviu.pop@colliers.com
CROATIA SERBIA
Vedrana Likan Nuccia Kos Ana Vukovic Ilija Samardzija
Managing Partner Senior Consultant Managing Director Key Account
Phone +385 99 3117 364 Real Estate Advisory and Agency Services Phone +381 11 313 99 55 and Operations Manager
vedrana.likan@colliers.com Phone +385 95 593 0136 ana.vukovic@colliers.com Phone +381 63 10 77 849
nuccia.kos@colliers.com ilija.samardzija@colliers.com
ESTONIA SLOVAKIA
Avo Rõõmussaar Maksim Golovko Richard Urvay Tamila Nussupbekova
Partner I Managing Director Analyst | Head of Research Managing Director Associate | Research
Phone +372 52 79 638 Phone +372 56 951 250 Phone +421 918 802 865 Phone +421915143383
avo.roomussaar@colliers.com maksim.golovko@colliers.com richard.urvay@colliers.com tamila.nussupbekova@colliers.com
HUNGARY UKRAINE
Tim Hulzebos Tamás Steinfeld MBA, MRICS Alexander Nosachenko Aleksey Lanko
Managing Director Associate Director Managing Director Director I Office Department
Phone +36 30 986 6093 Phone +36 70 286 2505 Phone +38 067 2301777 Phone +38 067 2452787
tim.hulzebos@colliers.com tamas.steinfeld@colliers.com alexander.nosachenko@colliers.com aleksey.lanko@colliers.com
38 C O LL I E R S I N T E R N AT I O N A L | H 1 2 0 1 9 39EX DING
BORDERS
OFFICE MARKET
IN 15 CEE COUNTRIES
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