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Real Estate: Office building administration and maintenance costs might grow by an average of 13% in 2024
Administration and maintenance costs for office buildings from Colliers Romania portfolio grew by 9% last year compared to 2022. In 2024 costs are estimated to grow by 13%, according to an analysis made by the real estate consulting company.
Higher costs for services in general, on the background of higher salaries, and an improved presence of employees in 2023 were factors that generated that tendency.
Colliers Romania administers abut 680,000 sq.m. of real estate areas (of which 600,000 sq.m. represent offices, the rest being industrial warehouses), which makes company data on administrative costs be representative enough for the whole market. Since utility costs are not included in all administration costs, but rather paid directly by tenants, Colliers excluded utilities from this analysis.
“The highest budget increase of office building administration and maintenance budgets was in the area of waste costs – 40% against 2022. This growth is mostly the result of a higher presence of employees in office buildings, which grew from an average of 40% at the beginning of the year to 55% and the end of the year. Significant increases of 12% were recorded for security and firefighter service costs, while cleaning costs went up by 11%, being influenced by the two increases o lowest wages in January and October 2023,”the analysis shows.
At present, the company has about 400 tenants in the buildings it administers in Bucharest, Cluj-Napoca, Timisoara, Brasov and Arad, and the value of properties in the portfolio exceeds a billion euros.
As for utility costs, there have been repeated drops for electricity and gas to levels recorded before the crisis, which led to lower invoices in 2023, compared to 2022. More exactly, in December 2023, the unit price of energy (in kWh) recorded an average drop of 15% against January 2023 for the entire Colliers portfolio, and the tendency continues with a slight drop. Also, there have not been significant differences for gas prices in 2023. Moreover, considering all market factors, budgets for administration and maintenance expenses were set up based on a 13% average increase in 2024, acording to Colliers consultants.
“As of 2025, the new taxing system on property will lead to a significant increase of taxes on property, if we take into account data mentioned in the public area. This category of costs is very important, since taxes on property represent between 30% and 40% of a normal budget for the administration and maintenance of office areas,”says Stefania Baldovinescu, senior partner Asset Services Land Agency at Colliers Romania.
Colliers Romania offers administration services for annual budgets of over 26 million euros, improving these expenses for owners who chose to externalize these services.
Colliers is one of the global leaders in real estate consulting services and investment management, with operations in 66 countries and 19,000 specialists.
With annual incomes of 4.3 billion dollars and managed assests of 98 billion dollars, Colliers increases the potential of properties and real estate active stock and accelerates the success of customers, investors and employees.