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Secular tailwinds of an emerging economy

Un text care sa scoata in evidenta capabilitatea de research a companiei.
Office stock density
Favorable fundamentals
  • Tightening the gap with European capitals
  • Mid-long term convergence potential
  • 120 % catch-up potential to the EU-27 capitals (plus London and Zurich)
Sources
Avison Young Research, CBRE, CW, JLL, Colliers, Danos, Eurostat, World Population Review Population greater area for Valletta, Paris, Helsinki, Nicosia, Dublin London office stock includes Grade A and quality Grade B buildings.
prime-headline-rent
Favorable fundamentals
  • Tightening the gap with European capitals
  • One of the most affordable capitals in the EU
  • 90% catch-up potential to the EU-27 capitals (plus London and Zurich)
  • +20% catch-up potential to region (Budapest, Prague, Warsaw)
Sources
Avison Young Research, CBRE, CW, JLL, Colliers, Danos
prime office yield
Favorable fundamentals
  • Tightening the gap with European capitals
  • Mid-long term convergence potential
  • 210 bps catch-up potential to the EU-27 capitals (plus London and Zurich)
Sources
Avison Young Research, CBRE, CW, JLL, Colliers, Danos

Strategy to buy in submarkets with occupancy momentum

Current vacancy imbalances among Bucharest submarkets confirm tenants tend to be interested in a selection of submarkets in which higher demand translate in reduced vacancy rates and increase rental levels.
Average-vacancy
Favorable fundamentals
  • 7% neutral vacancy
  • Balanced power between landlords and tenants
  • Currently, CBD average vacancy is below the neutral vacancy
Sources
Avison Young Research

Vacancy and headline rent in CBD

As vacancy decreases, rental income is posed to show growth due to increased market tension and limited development projects.
CBD
Favorable fundamentals
  • Headline rent and vacancy polarization
  • Headline rent excluding incentives
  • Average vacancy including Class A and B office buildings
Sources
Avison Young Research

Supply gap vs pipeline

Current office supply on the Bucharest market is muted due to limited building permits being granted in the city leading to a diminished supply of new office sqm currently in construction, to be delivered in the next 3 – year period.
Supply
Sources
Avison Young Research

Structural supply gap to continue

Lack of new projects in the CBD

Lead time over 4-5 years - the long timeline required before a project can be completed and operational, caused by multiple stages such as regulatory approvals, design, permits, leasing, construction/fit-out and final commissioning

Financial feasibility (proforma) of a project is very tight under the current rental market

Ongoing permitting bottlenecks are making new developments increasingly challenging