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Wednesday, August 16, 2006 

Office, retail property in Bulgaria getting expensive

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

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