08.11.2023
The world-class economic development is sustained by modern working infrastructure. The total stock of Class A office buildings in Cluj is 340,000 sqm, with expected future deliveries of 75,000 sqm.
Headline rents for prime Class A properties range between 13.5 to 15 EUR/sqm. While the vacancy rate (6%) indicates a landlord’s market, it is important to note that since the work-from-home switch, the total market activity was a fraction of Timisoara’s, registering only 9,400 sqm in 2022 and 5,900 sqm in H1 2023. Moreover, there is a growing number of companies looking to sublease.
On the one hand, the work-from-home/hybrid model coupled with pricy residential led younger professionals to relocate with families in the neighboring counties, thus decreasing the utilization rate of the office. On the other hand, companies are aware of the limited new supply, as the majority of the pipeline is foreseen to materialize in more than 24 months, geographical constraints of Cluj-Napoca in lack of a developed metro infrastructure, and vivid memories of the race to secure space in line with exponential growth in a tight market. Moreover, companies have done further hiring over the past few years and expect the office as is to become right-sized even in a hybrid work world.
Iulius put its toll on Cluj, following the same transformative mixed-use urban regeneration strategy applied in Iasi and Timisoara. The office component, under the United Business Center umbrella, features three separate projects built in 2008, 2014, and 2018, totaling 27,000 sqm, with future development possibilities for UBC Riviera. Companies that chose to work in UBC buildings include Endava, Genpact, Office Depot, and Analog Devices.
The Office is one of the emblematic business parks in ultra-central Cluj-Napoca. The 60,000 sqm of office and retail were built by Mulberry Development and Nepi Rockcastle custom to Cluj-Napoca market needs. As this was an accelerated growth market, the business park was constructed in three phases between 2013 and 2017 with the end goal of delivering a 9,000 sqm united floor plate, that could host up to 1,000 employees on a single level. As the metro project is years in the making, The Office concept features 1,100 car parking spaces and up to 400 bicycle/motorbike racks. The modern amenities, 200 seats capacity conference center, and visually appealing landscaping serve community building purposes for companies such as Deloitte, Yonder, 3Pillar Global, Bombardier, Betfair, Steelcase, National Instruments and Bosch. In 2019, Paval Holding added the landmark property to their portfolio for c.a. 130 million EUR.
Hexagon Offices is a Class A business complex delivered in mid-2019 by a joint venture between local entrepreneurs who managed to secure top-tier tenants such as Cognizant and Accenture. It exchanged hands for 32 million EUR at the end of 2019, being taken over by a Romanian family business.
Belgian Speedwell performed its first development outside Bucharest – a mixed-use residential and office development named Record Park. The 236 apartments were immediately sold out, whereas the 12,000 sqm of offices were occupied by EON, Mass Mutual, or MHP Porsche. It scheme is completed by co-working (Stables) and a large World Class leisure facility.
The above-mentioned schemes are a select few brand-new Class A projects that support the economic development of Cluj-Napoca. Cluj Business Campus, Liberty Business & Technology Park and legacy projects such as Maestro BC, Amera Tower, and City Business Center are a couple of other notable locally developed offices that served the needs of the city.
It is important to note that Cluj proved itself to be the most liquid market outside Bucharest, with major office sales over the past five years totaling 260 million EUR (10% compared to Bucharest, 3x compared to the third-ranked – Timisoara), marking exits to either local investors confiding in the market’s strength or potent national and international investors.
Moving forward, the future looks bright for Cluj-Napoca. While the immediate pipeline is for approx 7,000 sqm (new phases of Liberty Business & Technology Park), two of the most impactful investors in Romania made plans to deploy more than 850 million EUR over the next 5-10 years in Cluj-Napoca. Iulius and Prime Kapital, in partnership with MAS Group committed to the reconversion of 14, respectively 17 ha of conveniently located industrial platforms – Carbochim and Cesarom. The first phase of the office component of the new Iulius Group is 15,000 sqm GLA, whereas the total office component for Cesarom is 49,000 sqm. Further development is limited only by the capacity to cross the finish line of the metropolitan train and underground projects.
