Bulgarian Property :: Real Estate in Bulgaria Blog

Thug McClean in Bugaria to launder his crime takings

Exiled UDA godfather Alan McClean was last week rubbing shoulders with Russian mafia bosses.

The loyalist hardman who brought north Belfast to the brink of a bloody feud between rival UDA factions was busy sunning himself in an upmarket Bulgarian resort while other 'exiles' were hiding out in a number of locations across Ulster.

Loyalist sources believe McClean is planning to launder cash he siphoned out of the UDA's coffers through the Balkan property market.

McClean stunned Ulster holidaymakers when he pitched up in the Golden Sands resort accompanied by a small number of the close associates of deposed UDA leaders Andre and Ihab Shoukri, including their brother Yuk.

He's been spotted flashing his cash in the pubs, clubs and casinos in the lively Black Sea resort - which has a reputation for being a favourite holiday spot with Russian gangsters - since last Monday.

Said one surprised tourist from Belfast: "McClean and his pals certainly didn't look like they were worried about much.

"They didn't care who saw them, even though it would have been clear that some people would have recognised them, and they weren't shy about showing off their cash."

Loyalist sources believe he may now try to spirit away some of the cash he fled Ulster with by investing in the Bulgarian property market.

He is believed to have trousered more than £300,000 from the north Belfast UDA's various extortion rackets and drug dealing.

Sunday Life understands that McClean already has money invested in properties in England, including one in Devon, and another near Margate.

And according to loyalist sources, he had been boasting of his plans to exploit the Bulgarian property boom - and the country's slack financial reporting laws - to hide the stash of cash he has accumulated while running the north Belfast UDA alongside the Shoukri brothers.

Bulgaria has been a favourite location for criminals to launder their dirty cash through the eastern European country's rapidly expanding property market.

We understands McClean and his gang were living it up at a four-star apartment complex yards from the beach.

Source: Sunday Life

Residential property prices in Bulgaria rose in the second quarter of 2006 by 20.5 per cent on the year.

Meanwhile Slovenia shows the best potential for further price growth in Southeast Europe, London-based real estate consultancy Knight Frank said on August 16.

“A levelling up situation is affecting all markets in the former Eastern Bloc. Wage inflation, growing prosperity and access to less constrained mortgage finance have all contributed to rapidly rising prices,” Knight Frank said in a statement on its website.

The same process has been seen in Bulgaria, as prices have grown on catching up, speculation, second home interest and slow but sustained economic growth underpinning prices, the statement said.

Knight Frank said that a few hot spots like Slovenia, Slovakia, Germany, Cyprus and Russia would provide good investment opportunities in Europe, aside from the global slowing of average house price growth by 2007.

Serbia has the slowest price growth in the second quarter, among the 30 countries monitored by Knight Frank, as prices dropped by 5.1 per cent on the year.

The real estate markets of southeast Europe are attracting foreign investors as most of the countries have gained political stability and are closer than ever to joining the European Union. Bulgaria and Romania, which missed the first wave of the EU’s eastward expansion in 2004, hope to join the bloc next year.

The region’s economies are stable and grew by more than four per cent last year. The rising purchasing power of individuals and increasing demand for housing are also drawing investor interest.

Meanwhile, the construction business in Bulgaria is expected to mark an annual growth of 15 per cent in the next three years.

The forecast is according to data of the Bulgarian Construction Chamber, its chairman Simeon Peshov told a news conference in Dobrich on August 16.

Source: Sofia Echo

Sea and ski have been the traditional focuses for Bulgarian property investment; however, golf is just beginning to emerge as the third market for overseas investment. Currently there are just three golf courses in Bulgaria, namely St Sofia Golf Club & Spa set in Ravno Pole 15 minutes from the capital and two owned by Air Sofia, Ihtiman, 40km from the Sofia and Sliven in the heart of Bulgaria 90km from the Black Sea. All three have 18 holes and by all accounts are up there with the best of them. Air Sofia is also in the throes of constructing their third and fourth courses in the Lulin Mountains close to Sofia and in Razgrad 130km from Varna in the east of the country. Bulgaria is keen to capitalize on the rapid increase in foreign interest, using golf as a ‘carrot’ and this quartet will shortly be joined by several other courses to satisfy demand.

In fact, in 15 years time it is predicted that there will be a total 40 golf courses in Bulgaria and with golf will come property built around the fairways – perfect for holidays and for investment. Particularly on the Black Sea coast where thanks to a mild climate, the golfing season could easily extend through eight to nine months.

Bulgaria has the assistance of three golfing legends in putting the country firmly on the golfing map, namely Gary Player, Jack Nicklaus and 2006 European Team Ryder Cup Captain, Ian Woosnam. Between them they are currently involved in designing five golf courses in Bulgaria.

Gary Player is putting his name to two 18-hole courses on the Black Sea coastline and when he visited the sites back in October 2004 he commented, “I have never seen more beautiful places anywhere. The countryside will be preserved and perfect golf conditions will be created”. His first is Black Sea Rama, close to Balchik and his second, Thracian Cliffs Golf & Spa Resort in Kavarna which will include a five star hotel. Jack Nicklaus is working on the only PGA Standard course in Bulgaria, Dolna Banya Country Club & Spa near the ski resort of Borovets. Ian Woosnam has one signature course under construction on the coastline near Balchik, Lighthouse Golf Resort, and one 6km from the ski resort of Bansko named Pirin Golf & Country Club. All five are expected to be complete sometime between summer 2007 and summer 2008.

Savvy investors will capitalize on making an early investment into Bulgarian golf property and reap the rewards.

What’s on the Market?
Kavarna Hills and Kavarna Gardens are two luxurious apartment developments set just a short distance from the traditional fishing town of Kavarna which although steeped in history offers all modern conveniences including bars, shops and hospitals.

Kavarna Hills is a compact resort of less than 100 apartments surrounded by landscaped gardens and large pools with cascading water features. Also on-site are a restaurant and bar, gymnasium, sauna, underground parking and 24-hour security. From their elevated position, the properties enjoy sea, golf and port views whilst being just five minutes’ walk from the beach. All apartments have fully-fitted kitchens and air conditioning. Phase one properties are sold fully furnished and ready for occupation together with a rental guarantee of 6% (gross) over two years. Kavarna Hills is scheduled for completion in December 2007.

Kavarna Gardens offers one and two bedroom apartments located just two minutes’ walk from the sandy beach. On-site facilities include eight pools of various style and size, a fully equipped fitness centre, sauna, children’s playground, tennis courts and poolside restaurant and bar. The 500 or so apartments will be built in several phases; phase one properties will be fully furnished and fitted including cable TV. Final phase properties will enjoy a 5% (gross) rental guarantee over two years. Kavarna Gardens is scheduled for completion in December 2008.

Both projects are built by a leading Spanish developer established in 1968 and are situated a convenient 40 minute drive from Varna International Airport.

Prices – Kavarna Gardens – from 65,000 euros for a one bedroom apartment (30% upon contract, 20% payable after six months, 50% completion approx December 2008)

Prices – Kavarna Hills – from 79,000 euros for a one bedroom apartment (30% upon contract, 20% during construction, 50% completion approx December 2007)

Source: Easier News

Rents of high-quality office space in Bulgaria’s capital Sofia will rise in the next half year, pushed by high demand and under-supply, Colliers International said on August 2.

The company expects rental prices of Bulgarian properties to rise. Rental rates ranged between 13 and 22 euro a square metre monthly for high quality office space in downtown Sofia in the first half of 2006, Colliers said in its market report for the first half of 2006.

Demand from international companies seeking to enter the Bulgarian market or expand their business would drive the rents up. Foreign companies on the Bulgarian market are expanding their activity and start considering seriously the real estate issue.

The total inventory of high quality office space in Sofia rose by 11 per cent between January and June to 502 000 square metres, Colliers said in its report.

Annual yields edged down to between nine and 10 per cent from 9.5 to 10 per cent at the end of 2005. The yield is still higher than in other Southeast European countries, Colliers said.

On the retail market, two shopping malls, City Center Sofia, owned by UK-based Equest Balkan Properties, and the Mall of Sofia, owned by GE Commercial Finance Real Estate and Irish real estate and investment advisory group Quinlan Private, opened in the Bulgarian capital since the beginning of 2006. They offer a combined 42 000 square metres of rental area.

Rental prices in shopping centres and malls in Sofia ranged between 30 euro and 60 euro a square metre monthly in the first half of 2006, Colliers said.

Bulgarian supermarket chain Fantastiko will open a shopping mall in Sofia, Sky City Shopping Centre, with a total retail area of 16 000 square metres, by the end of this year. There are another 15 projects for construction of large shopping centres in the city.

The latest deals in the retail sector carried yields of between eight and 8.5 per cent.

Source: Sofia Echo

Westhill Investments, the UK-based investment advisory company and property developer, has issued a buyers’ guide to would be investors in the Bulgarian property market.

The move follows Westhill executives encountering a number of disappointed buyers who have made fundamental errors when it comes to purchasing property abroad.

“It’s in no one’s long-term interest to have disappointed customers - we want as many people spreading the word that this is a great country to visit and make an investment,” explained Westhill Director, Dominic Hicks. “Yet we’re meeting people who have made the biggest purchase in their lives, without even visiting the country or seeking professional, impartial advice.”

The Guide includes tips such as checking the price against the square metres of usable space. It is common practice for balconies, terracing and a share of common parts (including stairwells!) to be included in the price of apartments. Reputable developers and agents separate these out so that it is easy to make accurate price comparisons.

Westhill also urges investors to inquire about management costs when buying a new build. It is in the owner’s interest for the building to be well maintained. Many Bulgarian developers do not make adequate arrangements. Check the details of the managing agent and anticipated costs. Current rates are 7-10 euros per square metre, per annum. Any lower than this and necessary works are unlikely to be completed adequately.

Westhill warns buyers against making rushed decisions to pay any ‘deposits’ or direct payments. Some disreputable agents and developers try to impose ‘fines’ on negotiations if they do not get a deposit from a potential buyer on a first visit. Investors should always investigate the competition and discuss any decision with an advisor or friend ahead of making any payment.

Source: Easier Property News

Two constructions and a facility of hotels in Pamporovo were set up without the needed construction permit, an inspection of the regional directorate for construction control shows.

A team inspected all construction sites in the resort, as well as in other populated areas in the Smolyan region, mediapool.bg reported.

Inspection results showed that two constructions and another facility were set up without permits. According to the directorate the illegal constructions would be taken down.

Some of the violations registered were the lack of proper planning, architectural mistakes and missing documentation, mediapool.bg reported.

The regional prosecution in Smolyan ordered inspection of all new property and construction projects in the region. Such inspection occurred in June, when a part of the Smolyan-Pamporovo road collapsed because of the work on a hotel.

An inspection then revealed the hotel project lacked the permit needed for such type of construction work, mediapool.bg reported.

Source: Sofia Echo

Technical passports would become mandatory for all new buildings in Bulgaria, according to changes in territorial regulations voted in parliament on first reading on August 2.

The documents would list characteristics of the construction like fire safety, noise isolation, energy saving and others, mediapool.bg reported.

Initially the document would be required for new constructions only, Regional Development Ministry representatives said.

Deputy Regional Development Minister Savin Kovachev said that the introduction of such documentation represented a step back.

According to the Regional Development Ministry a technical passport was needed to ensure energy saving in buildings.

MPs suggested some changes to the regulations between first and second reading. One of the issues that needed to be clarified was the date from which the passports would become mandatory, mediapool.bg reported.

Source: Sofia Echo

As emerging property markets go, few can rival the hype or promise of Bulgaria, three areas of which are now being heavily marketed to UK buyers.

The first is Sofia, one of the oldest capitals on the continent with plenty of classic central-European architecture - the beautiful buildings which predate the 20th century alongside the less appealing Communist-era designs. But it is its future that is most attractive to investors.

Typical properties there include the Cherkonova apartment block, where units are priced at £913 per square metre - relatively low for the capital - with specific properties starting at £64,225

A second investment area is the ski region, chiefly the town of Bansko, although Pamporovo and Borovets are also now popular.

But Bansko in particular is attempting to lengthen its tourist season by installing year-round facilities in addition to the 65km of Pirin Mountain skiing.

Developments are improving in quality, too, drawing in better builders and established estate agents.

But while there remains general confidence that Sofia and Bansko will be good long-term bets, experts are more circumspect over Bulgaria's third investment region - the Black Sea resorts in the north of the country.

Some say the large-scale development of the past decade is a sign of a maturing market. "The coast has had a tremendous amount of development which I think will harm the rental market for the next couple of years," warns Casey.

But there is a different view.

One scheme is the St Vlas Marina at Dinevi, regarded as one of the most upmarket and developed parts of the area. Prices start at £32,000.

But whichever region you may choose, Bulgaria does still hold traps for the investor who neglects to do adequate research and fails to visit. Maverick estate agents still exist, and there are many other pitfalls. But rewards may be high for those brave enough to invest - property prices in the main Bansko area have risen by 30 per cent in three years. It's all to play for - if you pick the right location.

Tips for investors

Tax on purchases is not fixed, meaning investors face unexpected costs. Investors must set up a company before they can buy a second property or land in Bulgaria.

Ensure contracts include guaranteed rental yields if they are offered by developers and agents.

Play the long game and do not rely on short-term capital gains.

Many holiday operators are switching from more markets like Spain and Portugal to cheaper locations like Bulgaria.

Source: Belfast Telegraph

Property prices in Bulgaria were beginning to stabilise, Capital newspaper reported.

The price of old property began to decrease due to the mass construction in bigger cities and in popular resorts.

Property prices went up by 4.7 per cent on the average during the first three months of the year, data of the National Statistical Institute said.

Until recently new and old property sold at nearly the same prices, Capital reported. Location, quality of additional works and the completeness of the project came as secondary factors.

In Sofia, Varna, Plovdiv, Bourgas and Bulgaria’s coastal resort supply already surpassed demand, which started affecting prices, Capital reported.

Despite the decrease the National Statistical Institute presented prices remain stable overall without great changes. Six cities registered price decrease in the second quarter of 2006, including Blagoevgrad, Kurdzhali and Plovdiv.

Source: Sofia Echo