Over the past decade, how have you observed Romania’s office market evolving since assuming a leadership role within the company?

Bucharest’s skyline continually evolves with new buildings reshaping the local real estate market each year. Notably, developers now prioritize factors like accessibility, infrastructure, and overall quality of the area when selecting office project locations, recognizing the importance of fostering a content work environment.

Comparatively, the transformation from the disheveled Bucharest of the 1990s to today, featuring notable modern buildings and clusters of contemporary workplaces, demonstrates the significant strides made. Despite the rise in modern stock in regional cities like Timisoara or Cluj-Napoca, Bucharest remains the most sought-after destination for businesses entering or expanding in the Romanian market.

How does Romania fit into CA Immo’s portfolio following the company’s exit from several CEE markets?

Romania stands as a core market, constituting approximately 7-8% of CA Immo’s total global portfolio. Currently, our focus is on consolidating ongoing projects, given the challenges faced in 2020. The limited mobility and pandemic-related safety measures made signing new leasing contracts challenging, yet renewals showed a strong appetite. Despite these hurdles, Romania’s turnover remained steady, mirroring 2019 levels. Our plan is to maintain a long-term presence in the Romanian market.

Adapting to leasing office spaces remotely must have posed challenges. How did your company navigate this shift?

Negotiations with digital systems providers are ongoing. While new projects easily integrate such technology, existing buildings present mapping complexities. Although we provide space planning and blueprints to prospective tenants, the preference is often to experience the space firsthand. Decision-making processes slowed during the crisis, and overall leasing took notably longer, approximately five to six months more than in 2019, reflecting a substantial slowdown.

When do you foresee the office sector emerging from the current challenges?

The innate need for social interaction prompts a return to office spaces. Personally, I avoided remote work as it blurs the boundary between work and leisure. The natural rhythm of commuting and office work will gradually resume post-crisis. A hybrid model allowing employees to work from home a few days a week was already in place pre-pandemic. Considering social distancing norms, we anticipate around 50-60% of employees returning to the office by September 2021.

Amidst Bucharest’s expanding office sector, are there still untapped development opportunities?

There’s ample room for new development projects, especially if state institutions recognize the importance of updated office spaces and modernize their existing headquarters. Tenants in this segment show potential, evidenced by the Ministry of European Funds moving to a more suitable building. The market outlook is promising, with workforce availability likely becoming the only limitation in the future.

Do you contemplate expansion beyond Bucharest to capture emerging opportunities?

We prioritize liquid markets, which currently favor Bucharest over other cities. A dynamic environment with frequent turnovers is appealing for both local and foreign investors, ensuring investment liquidity compared to static markets.

What message would you convey about Romania’s real estate market to foreign investors?

I encourage foreign investors keen on Romania’s real estate market to explore the abundant opportunities firsthand. Our consistently high portfolio occupancy rate, exceeding 90% over a decade in Bucharest, has generated stable revenue. The complementary tenant and workforce pool continue to contribute to this upward trend, making it an enticing prospect for investors.