The office space vacancy rate in the Bulgarian capital Sofia rose to 11.4% in the third quarter of 2020 from 10.6% in the previous quarter, Forton, a strategic partner of Cushman&Wakefield for Bulgaria and Macedonia, said.
The percentage is expected to keep going up in the short term, since the stock is forecast to rise in the light of lower occupier activity due to the coronavirus pandemic, Forton said in its third-quarter 2020 office market report published last week.
The growing vacancy rate is expected to put rents under downward pressure in the coming quarters, especially in areas with concentration of new office projects, Forton noted.
The share of subleases in the total take-up will also increase, due to tenants’ strive for space optimization, Forton added.
"The office market in Sofia registered moderate activity in the third quarter, with leasing contracts amounting to 18,043 sqm. Take-up volume is about 60% lower than the five-year average for the July-September period," Forton said.
According to Forton, renewals and relocations continue to dominate Sofia's office market, with both type of deals accounting for some 90% of the total activity.
"The share of preleases remains low, with only 22% of the office space scheduled for delivery by the end of 2020, already let," Forton said.
With the completion of a small building and enlargement of another one, the third quarter contributed marginally to the total Class A and B stock in Sofia. Larger projects are expected to obtain use permits in the last months of the year.
"Preliminary results of the market research conducted by Forton show that currently less than one third of the large companies’ staff in Sofia is working from the office," Forton noted.