[size=85:18nceaxk]novinite 07 July 2010

Sofia Sees 25% Fall in Office Space Rental Rates since 2008

Asking rental rates for office space in the Bulgarian capital Sofia have dropped approximately by 25% since the beginning of 2008 driven by the large supply and the weaker demand, a survey shows.

“On paper, this appears to be a relatively moderate reduction, given the oversupply and the soft demand. Reality is that few, if any, leasing transactions are signed at asking rental rates,” says a report of realtor Colliers International.

During the first half of 2010 the average decreases in asking rental rates in Varna CBD are 15%, and in the Broad Center – 22%.

The momentum of supply of new office space in Sofia and Varna lingers in the first half of 2010, and will continue in the coming months.

According to the latest office research from Colliers International, 106,000 sqm of new, contemporary office space was added to the total stock in Sofia during the first six months of the year, reaching a total stock of 1,168,000 sqm. 21% of the new offices are located in the Broad Center and 64% in the Suburban areas.

The majority of the new supply is delivered by the European Trade Center, Doverie Business Center, DSK Bank Headquarters and Krystal Business Center, which added a total of 66,500 sqm to the office market in the capital.

During the same period the office market in Varna saw a moderate 5% increase office stock, reaching 177,600 sqm in total. The Suburban areas accounts for 45% of the total inventory, while Central Business District and Broad Center hold 26% and 29% respectively.

The volume of the projects under construction in Sofia decreased to 668,300 sqm by the end of June 2010, which is the smallest pipeline recorded since 2007. The total amount of office space in the active pipeline in Varna is 77,300 sqm of which more than 50% is expected to be delivered by the end of the year.

The overall vacancy in Sofia (245,000 sqm or 21% of the total stock) and Varna (27% of total stock) continues to increase. As of June 2010, the vacancy level in Sofia was higher in Class A than Class B buildings, a testament to the price sensitivity of the market. In terms of location, the highest overall vacancy level in both Sofia and Varna can be found in the Suburban areas.

“The most active companies in terms of demand are mainly from the telecom, outsourcing and IT sectors. Key parameters in Sofia remain the rental levels, location, functionality of the buildings as well as operational costs,” comments Anton Slavchev, Manager - Offices and Business Parks at Colliers International.

According to Slavchev the office market segmentation, as well as the competition for finding new tenants, will continue to increase.

[size=55:1gqoz2bv]novinite 19 October 2010

Sofia Office Market Sees Signs of Recovery

After a period of relatively low activity, the Bulgarian capital Sofia is seeing signs of recovery in the office market, according to a survey by Colliers International.

The net absorption for the first half of 2010 has marked a 27% increase compared to the previous six months, the most active companies being mainly from the telecom, outsourcing and IT sectors, shows data of Colliers International.

The vacancy level has reached 21% of the total stock and was higher in Class A than Class B buildings - a testament to the price sensitivity of the market.

"
Key parameters on the Sofia office real estate market remain the rental levels, location and functionality of the buildings"
, comments Anton Slavchev, Manager, Office Department at Colliers International.

According to him, more transactions on attractive rental levels and conditions should be expected in the coming months, the major driver of demand being the effect of further consolidation and global mergers and acquisitions and the fact that companies can currently get very favorable leasing conditions.

Office real estate markets around the world took another step towards returning to normal in the past six months. According to the Colliers' Global Office Real Estate Review for the first six months of 2010, most markets show increasing signs that the worst of the global crisis is over.

Leasing activity is up significantly compared to the previous six months. In particular, Asia Pacific, Latin America and Canada all post healthy growth rates and show signs of future expansion.

The outlook for the balance of 2010 and into 2011 is for continued signs of growth, and a general sentiment that "
the worst appears to be over"
.

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.

Bulgaria's capital Sofia made recently its way into the top ten office markets in Europe and the Middle East in terms of construction volume to be built by 2012.

Sofia ranked next to Paris, Brussels and St Petersburg since in each of these cities some 600-700 thousand square meters of office properties are being built.

Approximately 200,000 sq.m. new office space is expected to be completed until the end of the year, shows a research by Forton, a property advisory company.

[size=55:11lopttm]novinite

Cleves Launches Major Luxury Rental Building in Sofia

Cleves, the luxury apartment rentals company, opened on Tuesday Sofia's most expensive rentals project – Cleves Este, a sumptuous 34-apartment building in Izgrev costing over EUR 10 M.

The development was nominated for Bulgaria's "
Building of the Year"
competition last year. Sofia airport is 10 minutes away by car, and the Interpred Metro station (Joliot Curie) is only 200m away for fast access to Sofia city center.

EUR 2 M has been spent on the fit-out, furnishing and equipment of the building. Prior to the launch, several of its most costly apartments had already been rented – for as much as

USD 3000 + VAT per month. Rentals at Cleves Este range from USD 760 to USD 3400 + VAT.

"
There is a shortage of high-quality rentals in Sofia. Despite the economy, underlying demand from international clients in this niche is strong,"
Vesey Crichton, partner at Cleves said upon opening the impressive rental apartment building.

Cleves Este has shops and restaurants on site, underground parking, landscaped gardens and children's playgrounds. A swimming pool and health club will open soon with massage, steam rooms, fitness and beauty facilities.

The building itself has eight floors, with a ground-floor suite of offices, 34 apartments and 49 parking spaces. The design of each of Cleves Este's apartments is different and distinctive. Influences range from Japanese Haiku poetry and square-rigged sailing ships to the romance of Tuscany and Provence.

At every stage of the project's design close attention has been given to style and comfort. All apartments are light and airy, with spacious rooms and big windows. Each has at least one balcony – most have several.

Some apartments have walk-in wardrobes. All have modern handcrafted kitchens, Wi-fi pre-installed, and flat-screen TV with cable access. Every apartment has a full security system, with burglar alarm motion detection, and the front doors have triple bolts. A concierge is on duty 24 hours a day.

The air-conditioning is computer controlled, with chiller units on the roof –'greener' and more efficient than conventional systems. The underground car park is lavish: wide painted concrete floors, lighting activated by motion sensing devices, and (for winter conditions) under-floor heating on the entry and exit ramps.

Cleves EOOD ([You must be registered and logged in to see this link.]) focuses on the top-end of the rentals market. Its clients are senior international business people and diplomats. The company owns and operates all the apartments in its portfolio in order to be able to offer the highest quality of service.