March 2nd, 2010 — 12:58pm
In the last quarter of 2009 the first signs of activity have appeared on the rental market of office space in Bulgaria. Analysts claim that this was due to the efforts of the owners to stimulate prospective tenants with bonuses like rent free periods and payment of the relocation. The much lower rents of newly built offices proved to be a good incentive for many companies to relocate.
The expectation in 2010 are that the size of the unoccupied office spaces will continue to grow due to the large number of new offices that are expected to be offered on the market. In the last quarter of 2009 new offices with total area of 38 200 sq m entered the market. In 2008 their total area was 65 900 sq m. The largest projects have been planned to be completed in 2010 and thus the expectations are that by the end of the current year the newly finished office space will total 360 000 sq m.
In the end of 2009 the office space in Sofia exceeded 1 million sq m of which 80% were situated on the main boulevards and in the outskirts of the city. The completion of about 460 000 sq m of office space has been delayed or frozen.
The rent was 13.50 EUR/sq m for offices class A in the last months of 2009. The average rent for the same period of 2008 was 17 EUR/sq m. The offices of class B and C are offered at 8 and 4 EUR/sq m respectively. It is expected that these levels will remain the same in 2010.
The yield from first class office space in Sofia stays at 11%.
Comment » | Bulgaria, Property
February 23rd, 2010 — 12:07pm
The number of new buildings in Bulgaria has dropped by 70% on an annual basis. In the last quarter of 2009 the number of the new planning permissions was 1343, while in the same period of 2008 they were 2452, according to the National Statistics Institute. This huge drop has come after 5 years of permanent increase of the number of planning permissions.
The recession in the construction industry has also had its impact on the size of the new apartments – their living area has decreased by 24% only from October to December 2009 in comparison with the previous quarter. Annually the drop has been more drastic – it has exceeded 70%.
The construction of new offices has also suffered. In the last quarter of 2010 only 63 planning permissions have been issued, which is a drop by 25% in comparison with the previous quarter and 37% on an annual basis. Most of the already finished offices are left empty, despite the decrease of the rents.
The price drop of real estates in 2009 is on average by 20% but in some parts of the country it has reached 60%. The real prices at which purchases are made in the Bulgarian capital Sofia are on average 23% lower in comparison with the period 2007 – 2008, i.e. the average price in 2009 was 980 Euros/ sq.m.
The price drop in the other cities has not been so drastic but property prices there have not reached the levels of those in the capital. In Varna, the second Bulgarian city, the price drop in 2009 was of 14%, while in Plovdiv and Burgas (the third and the fourth largest cities) – 15%.
Comment » | Bulgaria
November 2nd, 2009 — 11:02am
Prices of properties in Sofia and in Plovdiv have dropped by approximately 17% in the third quarter of 2009 in comparison with the same period of 2008. The average real purchase prices of apartments in Sofia are similar to the ones at the end of 2007 and in the beginning of 2008. The prices of properties in the Bulgarian capital have reached their climax in the third quarter of 2008.
The situation is similar concerning office space. In the third quarter of this year the index of the average prices of offices, warehouses and shops has dropped by 26 on an annual basis. The market price of office space has reached its peak in the last quarter of 2008.
In Plovdiv the average property prices are close to the those at the end of 2007 and the beginning of 2008. Their peak similarly to Sofia was again in the third quarter of 2008.
2 comments » | Bulgaria, Property
October 6th, 2008 — 4:23pm
Office and retail rents fall and will keep falling in the next two years according to Raiffeisen Property. In short term the office space on offer will outnumber the demand. The same tendency is valid for retail space, as only in the next 2.5 years it is expected that the retail space will increase eight times.
Meanwhile the interest of investors is expected to decrease due to the world crisis which has hit the property market. As result the secondary market will become rather active. Those who bought property as investment will rush to sell it. The demand will be focused mainly in the cities. The prices of high quality residential property will rise in expensive city areas.
In the mountain and sea resorts there are too many properties on offer. In the end of 2007 there were more than 80 000 newly built properties there, while currently there is demand for about 65% of them.
Comment » | Bulgaria, Property
July 2nd, 2008 — 1:58pm
Regent’s Property Advisors, part of AG Capital presented their project Sun City Centre – shopping mall on 15 floors with total area of 41 516 square metres, 7100 square metres of which will be office space. The retail area will be only rented and already more than 30% have been let. The investment exceeds 30 million Euros and it is expected that it will create 580 jobs. Sun City Centre will open in 2010 while AG Capital plan to build a second shopping mall in the outskirts of Burgas. It is believed that the two projects will influence the commercial property market in the city, where at the moment shops rent from 60 to 100 Euros per square metre.
Comment » | Bulgaria, Economy, News
