[size=85:2a0hkxqz]Sofia echo 27 April 2010

Colliers International: Office rent levels in Bulgaria to stabilise in 2010

Research from Colliers International, or what is described as the "
Top 15 survey"
, shows that office rental levels in Sofia will be "
stabilised"
in 2010, a company media statement announced on April 27 2010.

The survey shows data collected by the end of March, while the Top 15 pertains to existing, large multi-tenant office projects in Sofia, encompassing a total of 300 000 sq m of office space, or what is a third of the total office space in the capital city.

According to the report, demand was largely insubstantial in the first quarter of 2010 but price levels were not considerably affected by the lack of interest due to the lack of new supply.

New major office buildings were not flogged onto the market in the first quarter of 2010, which according to Colliers, "
did not affect the Top-15 Stock"
.

"
The Top 15 Rental Index shows that rental levels are starting to stabilise, as the first quarter in 2010 indicated a 1.1 euro sq m/month decline in asking rents following a general stabilisation of suburban rents in the second half of 2009,"
the report said.

"
As Top 15 projects are adjusting prices and conditions, they consolidate occupancy. In reality, landlords offer rental reductions as a last resort, and prefer to entice tenants with step-rents, rent-free periods, free moving and other incentives"
.

Rents had decreased by 22.5 per cent by the end of 2009, as opposed to levels of summer 2008, according to Elta Consult, former partner of CB Richard Ellis.

But whereas Colliers believe rents will stabilise, there are indications that Bulgaria might not be just out of the crisis yet.

According to different studies, 2010 will see the further decline of prices of both office space and real estate.

About 70 000 sq m of office space was complete and made available in 2009, making a total of about 1.17 million sq m on the market. Additionally, about 150 000 sq m of office space were under construction and were expected to be available by the end of June 2010 alone. For the moment, only about a quarter of them, 20-25 per cent, have been rented out to tenants, while the others remain vacant.

According to MBL, about 72 000 sq m of office space were rented out in 2009 nationwide, making it the lowest rate in five years, since total completed office space amounted to 165 000 sq m. Furthermore, about 375 000 sq m of new office space is expected to be made available on the market in 2010.

Currently, office space Class A in Sofia city centre varies between 11.5 and 15.5 euro a sq m, whereas elsewhere in the capital, the average is between nine and 13 euro sq m.

[size=55:1vw9f9ck]novinite 06 September 2010

Rents in Bulgaria Track Sideways

Rental levels in Bulgaria have tracked sideways in mid-2010 as the impact of softness in demand had been offset by the effect of restricted new supply, according to global research outfit Business Monitor International (BMI).

Surprisingly, BMI country sources expect modest rises in rents in Sofia and Varna and forecast that rental yields will continue to track sideways over the next year or so, as movements in rents are matched by changes in capital values.

At the beginning of 2010 rents had fallen by around one-third in all three sub-sectors and in all three cities – Sofia, Burgas and Varna, which the research outfit monitors

According to the experts there is unlikely to be substantial supply of new office, retail or industrial space over the coming years. The lack of greenfield development sites represents a constraint on new supply, but demand for new space is likely to remain weak.

Bulgaria remains in the grip of a long and deflationary recession, characterised by weakness in investment, net government spending and - in particular - consumption. Consumer sentiment and spending is likely to stay soft as unemployment remains high.

I can say that this also applies to the rental of private accommodation I have friends who have had a terrible year renting out so it all looks like doom and gloom for a while for all

[size=55:prbodhy1]novinite 18 September 2010

Sofia Office Market Vacancy Rate to Hit 25% End-2010

The vacancy rate of office space in Sofia is expected to rise up to 26-27% by the end of the year with the opening of new buildings, real estate consultancy Regent's Property Advisors forecasts.

Adding a significant amount of new offices to the market, the vacancy rate during the first half of the year reached levels of 22% of total stock, equaling to 253,000 sqm, data of the company shows.

The largest share of the empty offices still remains in the suburban areas of the city, but the most significant increase was felt in the center (CBD) in particular - Class A offices.

During the first half of 2010, the supply of office spaces continued to grow despite the stagnant economic conditions. Projects that were started in the boom period of 2007-2008 were successfully carried out in the last couple of months.

The newly added 142,500 sqm are just slightly less than the overall office areas that were added during the whole 2009. Total stock of office premises reached a little more than 1,150,000 sqm.

Half of those Class A offices (18%) are located in the CBD, where a quarter of the whole total stock is located.

Rent levels in the first half of the year were slightly reduced reaching an average of EUR 12-13 for Class A offices, and EUR 7-8 for Class B offices.

Considering the already functional office space and the expected additional 106,000 sqm by the end of 2010, the rent levels are expected to continue to be under pressure, the analysis points out.

Right before its accession to the European Union in 2007 Bulgaria emerged as the new shining star for investors in office facilities development. Three and a half years later, the country is going through its first recession in more than a decade and the office market has been hit by a period of relatively low activity.

The market remains focused exclusively in the capital Sofia, which is at a stage when any client might be able to find suitable premises or expect those to appear at a suitable time.

Assessed in comparison with other countries in the region of Eastern and Southeastern Europe, Bulgaria's office market is keeping its edge.

Yields have been rapidly declining in the old hotspots of Central and Eastern Europe for the last few years and investors have been pushed further east to countries, including Bulgaria.

What the country offers them are lower prices, higher returns and relative security.