Tirana Lacks Office Space

Tirana | 22 October 2009 | Besar Likmeta

Commercial tower in Tirana

A study published by Colliers International reveals that Tirana has one of the lowest office space vacancy rates in the world, with only 2 per cent of the market open to leasing.

The list was topped by Rio de Janiero with a 0.6 per cent vacancy rate, followed by two Canadian cities, with Tirana and Geneva tied for fourth.

However, the multinational real estate company warns that “a true assessment of Tirana’s vacancy rates is difficult due to the high quantity of converted office space and the secrecy of lease and sales agreements”.

Although the Albanian capital's central business district, CBD, has experienced an exponential growth in class A offices in the last few years, demand has kept pace with new construction projects.

“Prior to 2000, there was little to no Class A office space in Tirana’s real estate market, [however] over the past several years we have seen an increase in the development of higher quality office space,” said Colliers' Tirana Office in its market overview for the first half of 2009.

“Today there are several high quality office buildings located in Tirana’s central business district with more under construction or in the development pipeline,” the report noted.

Rental rates for office space in the capital range from 12 to 23 euros per square metre. A lack of parking is considered one of the main drawbacks of the CBD and remains one of the most important considerations for businesses.

The newest office tower, which came on the market in early 2009, is the ABA Business Centre. Its introduction increased the total stock of quality office space in Tirana’s CBD to 53,500 square metres.

Several more major commercial projects, complying wih the highest international standards, are currently under construction. These projects are expected to contribute an additional 30,100 square metres of office space within the next one to two years.

Apart from the CBD, Colliers underlines that the surrounds of the Tirana-Durres highway - especially the area close to Tirana's city entrance and the airport road - will be important areas for office development in the near future.

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Comments:

Tirana Office Market
2009-12-03 23:38:19

Due to the relatively small size of quality tenants and registered buildings, the investment possibilities are quite limited for international investors. Furthermore given the size of the city, it is difficult to believe that Tirana will ever develop as an important office investment market. Some local players are still continuing to invest in this market as they have a different opinion on the overall economic development which in turn influences demand for space. It is critical to watch closely assuming that some of these properties will have to be sold to maintain liquidity or to refinance credits, there should be some interesting offers in the market soon. marin@balkimo.com

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Tirana Lacks Office Space