[size=55:1rw2f20c]novinite 28 August 2010

Bulgarian Hotels Up for Sale over Unpaid Mortgage Debts

Unpaid mortgage has forced the sale of a hotel at the coastal complex Chaika, near the town of Varna, and its owners are looking for buyers, who will fork out a whopping BGN 2.5 M.

A check in the registry for public sales of the Bulgarian chamber of private enforcement agents shows that this is the most expensive property, whose sale has been prompted by unpaid mortgage.

“Alen Mak” hotel is owned by a Sofia-based company and spreads over 8474 square meters, including a pool and a bar. The asking sale price BGN 2 498 925 includes the price of the land, which totals BGN 1 216 800, VAT included.

Chaika (Seagull) resort is situated at the Black Sea, only 10 km away from the coastal capital of Bulgaria Varna. The register for public sales shows that nearly 70 properties have been offered for sale in a public tender in the region of Varna.

Just two years ago Bulgaria, a confident European Union new member, was celebrated as a property hotspot with healthy growth in all segments. These days frozen projects and bankrupt investors paint a gloomy picture and there is growing alarm that the big boom has become the big bust.

The owners of hotels in the coastal and mountain resorts know that best. Following a weak winter season and an anemic summer season, they have been forced to put up “For Sale” notices, but buyers are difficult to find.

Experts say this is not the burst of a speculative bubble, but rather the logical development of the market.

The foreign buyers, who fueled the real estate sector in Bulgaria, started to withdraw in 2008 due to the slow-down in markets outside Bulgaria, finding it harder and harder to finance their purchases. Those who bought a property in Bulgaria, hotels in particular, now often find it difficult to serve the credits they used.

The hotels on offer at the moment are not only small family hotels, but also such with capacity for more than 100 people, shows data of the real estate agency Foros. Prices range from EUR 400,000 to EUR 1 M, depending on the location, capacity, category, turnover of the hotel and the contracts it has with tour operators.

Supply is abundant on the Black Sea coast, particularly in and near its Southern resorts of Sunny Beach and Sozopol.

Brokers in the Black Sea city of Varna point out that one of the peculiarities of the market is that many hotels are not officially put up for sale.

“Owners are worried that this might demotivate the people working at the hotel, who are hard to find anyway,” they say.

This is all very sad but not uncommon its the same story all over the world :Very sad:I don't know what the answer is but I do believe that greed has played its part in some of the hotels and other property to not forgetting the REA's who have over priced property and taken their share.

Very good point nu2bg I am a firm believer that REA's have a lot to answer for the demise of the property market both in Bulgaria and the rest of the world