“And what happened to all this demand for offices, which was presented in several reports?”

      Yesterday I was sharing with you the real situation that I see today in the office market of Bucharest. The prices were… cut off comparing to the ones of 2008 and the availability of office space was skyrocketed. Add on these two elements the fast contraction of Romanian GDP (probably it will be more than 9% down, comparing to 2008) and the world crisis and you create an "explosive" cocktail, ready to be served and cause major problems to almost everyone involved in the market.
      2009 was dark, difficult, grumpy. 2010 is expected to be even worse, as we will reach the most difficult part of crisis, the "core" of it. In this period I expect the prices to drop a little more, until to reach their lowest point during the next year. I know that all these are not happy for anyone to hear, but… this is it. The best way to solve a problem is to identify it and to search for solutions, not to hide from it, pretending that it does not exist. "Exist" I wrote… Many people are asking me  about the "presented data in media and other reports for 1 – 2 million sq.m. of A Class demand of office space in Bucharest, until 2013". "Does this exist?"

2008. So many reports predicting an enormous demand for A Class office space
      It was just one year ago, when we were all reading reports about "shortage of office space" or "huge demand for office space", "millions of sq.m. are required in Bucharest" etc. Almost all the major players were predicting the same things, more or less. They were describing a continuous, never ending growth of Bucharest and Romania in general. They assumed that Romania would continue to attract thousands of new companies, who would hire tens of thousands of new employees. Thus they would need office space and as the available one would not be sufficient, millions of new sq.m. should be developed.
      Ofcourse they should be A Class, so as to be able to match with the new standards that (all analyses and predictions assumed) all companies would need to apply at their business. The rental prices would be very high ofcourse. Last but not least, the new business location should be the North, up to Pipera and maybe even further, to Stefanesti. So, it was logical to develop projects almost anywhere, even in areas that today look "weird" for an office building to stand…

"And what happened to all this demand for offices, which was presented in several reports?"
      I don't know. You can ask the ones who were talking for a demand of some… millions of sq.m. of A Class office space, over the next years. I never believed this, never said it, so I have no reason to justify it too. All these were probably assumptions, coming from macro-economic models, made by people who just wanted to bring up results which would satisfy their clients and other readers. Note that all these reports usually write somewhere (with very small letters) that they are not predicting anything officially, it is just an opinion etc. So everyone is covered.
      I was always skeptical when I was reading reports about all these, especially because I happen to know a few things about real economy, life and Romania itself. I could not understand how Pipera would become the new business center of Bucharest, how people would live in unexploited areas, how companies would pay huge money, without clear, obvious results.
       Now I am relieved to know that I don't have to apologize for any wrong prediction like this, while I notice that the majority of the others blames the world economic crisis… As if after the crisis companies will return, renting endless thousands of sq.m., with tremendous rents – directly comparable to Western European ones, enjoying to work in areas blocked by traffic and lack of infrastructure, paying huge salaries and accepting having poor results…

      Romania is an excellent place to invest. It has a great potential, but there are also many problems. This crisis and its duration will remind us all these problems that we must fix, before we move on, to create a country with serious, sustainable growth, without huge price appreciations (and price collapses too). Let us learn of these mistakes, all of us…

      PS. While I strongly disagreed and continue to disagree with the reports about the millions of necessary sq.m. of A Class office space, I believe that there are other domains where the reports and predictions are more close to reality, such as the residential and the industrial sectors. But still, we need to re-identify what does it mean when we say "1.000.000 new homes are necessary". Because many people understand "1.000.000 spatious, expensive, nice homes at the suburbs", while I perceive "1.000.000 new dwellings, out of which 80% should be studios, 2 and 3 rooms flats, inside the city, close to public transportation etc".