KEY SHIFTS

• A particular case, Bucharest roadblock in permitting will put PRESSURE ON OFFICE RENTS, which will go upwards. Office deliveries will be very scarce - 110,000 sqm new office space is announced in 2023 and 85% less in 2024. By 2025 and 2026, the capital city will witness the delivery of less than 70,000 sqm. 2022 has already sensed increases over 5% in rents, but 2023 will probably bring more than 7%. Indexation and surging construction and energy costs will pump up headline rents in Bucharest prime district above 24 Eur/sqm, never seen from 2008 levels.

• FLEX will shorten the lease terms. As most players are sceptical in planning too much ahead, the standard 5/7 years lease duration will become a rare bird. The more to be appreciated by the landlords, both in offices and industrial segments.

• Warehouses are blooming - big, small and smarter. The runaway from the city has not taken humanity too farhence the very close LAST MILE concept that will emerge as the governance force of 2023 - inner city logistic, storage, light manufacturing and many distribution points will pop up “after the rain” in Bucharest, inside the inner-city ring, and soon afterwards in Brasov, Constanta, Craiova, Satu Mare, Oradea, Bacău and many other metropolitan areas above 200,000 inhabitants. At least 10 new developments amounting to more than 300,000 sqm have emerged around Bucharest in the last half of 2022.

• Beware of the ChatGPT of the real estate world - unless you have been off the grid for the past few months, you know the hype around this San Francisco based chatbot. The machine, said to be the best chatbot ever created, sheds fear because of the super-fast answering time, ease of access and confident result - you may ask it any curiosity on earth, ask it to write an essay or to make it a business plan and it delivers in minutes. What strikes people is the steady delivery, which names it “the confident bullshitter”. That aside, ChatGPT can change completely the listing of a property, would probably standardize the transaction structure and for sure will outgrow immediately many of the so-called experts, so let the revolution begin!