[size=55:vfhac687]Dnevnik 04 August 2010

Bulgarian REITs dig themselves deeper in the ditch

The ongoing property market meltdown continues to take its toll on the earnings of Bulgaria’s listed real estate investment trusts (REITs), show the first-half earnings released by the major market players.

REITs focused on office space and holiday real estate are faring even worse than in the dour 2009, whereas those involved in farmland consolidation remain stable, with some even posting better revenue.

The combined result of Bulgaria’s 11 listed REITs between January and June was a negative BGN 10.1 million compared with a positive BGN 1.52 million a year earlier.

The main factors for the decline are dampened demand and the dry-up in foreign investment as well as stalled sales and lower selling prices. Write-downs, the cash shortage and limited financing and borrowing opportunities are also to blame.

Prime Property BG posted a loss of BGN 13.5 million, which is 2.5 times more than what it made in the first half of 2009.

BenchMark Fund Estates and Intercapital Property Development also booked negative results.

FairPlay Properties, FNI Bulgaria and Sopharma Properties remained relatively stable, pulling off a rise in urban and holiday properties despite the downturn.

Farmland REITs are emerging from the troubled waters unscathed. “The economic crisis has not had a significant impact on our core business at this stage of the company’s development,” Desislava Yordanova, executive director of Agrofinance, told Dnevnik. “On the whole, agricultural land funds have been less affected than the other REITs,” she added.