Colliers: Fewer office space deals this year

The number of transactions on the office space market will be much lower in 2006 than it was in 2005 due to the limited volume of class A projects to be completed this year, real estate service company Colliers estimates. The market of class B space will be gaining ground this year, with several projects scheduled for completion in the Pipera area and close to the Polytechnic University. “The class B space market will be the star of 2006, thus continuing the trend at the end of 2005, when a portfolio of six buildings was sold to a Greek investor,” Colliers analysts say. They believe the market in 2006 will become more diverse, from the nationality and size of the funds that try to enter the market, to the products investors are looking to buy. As class A developments are dwindling in numbers, even the most conservative of funds will be looking for other types of products, such as class B projects and brownfield investments (developed on already existing structures), or even targeting smaller cities. “Investors have to develop partnerships that would allow them to participate in riskier, yet more profitable projects,” analysts say. According to Colliers, there were ten transactions in 2005, the largest number thus far. Austrian investors were the most active on the domestic market, buying four of the largest real estate projects. Irish and English investors came next, focusing on projects of up to 10,000 square metres.