Monday, February 26, 2007

Bulgarian real estate fund to spend 8.5 mln levs on property buys

Local real estate investment trust Super Borovets Property Fund has earmarked 8.5 mln levs for the purchase of properties in various parts of the country.
The investment program will be put to a vote at an April 8 general meeting of shareholders.
The first purchase planned by the REIT is of 2 unzoned properties in the village of Slatina, near Sofia. The company will pay 4 mln levs for the properties with a combined area of 0.818 ha.
The shopping list of the fund also includes a recreational center and a property with zoning approval in the coastal town of Balchik, with a combined price tag of 3.5 mln levs; and 1 mln levs in land plots with zoning approval located in village of Lyuliakovo, in the Dobrich region, with an area of 36,000 sq m.
In January this year, Super Borovets Property Fund sold a 56,100 sq m lot near Samokov for some 9.9 mln levs. The plot's acquisition cost of less than 1 mln levs allowed the fund to turn in a hefty profit of 8.989 mln levs for 2006.

Traditional property markets still beat emerging hotspots

Bulgaria is the third-biggest overseas property market for UK buyers, despite continuing competition from old favourites such as France and Spain, the Association of International Property Professionals (AIPP) has revealed.

The first annual report on British overseas property investment from the AIPP has placed Spain and France in the top two spots, taking 50.5 per cent of the market share in 2006 (31.6 per cent and 18.9 per cent respectively). However, the figures show that Bulgaria has slipped into third place, attracting 7.7 per cent of British overseas property purchases.

Chris Howard, managing director of overseas property specialist, 4:Property, commented, ‘It is very credible that the Bulgarian market is growing rapidly because it has had a lot of UK media exposure and has branded itself in a way that Romania and other such countries either haven’t tried to or haven’t managed. It will continue to have an active property market going forward.

‘The more traditional markets, such as France and Spain, are radically different. France tends to attract more well heeled investors looking for rural locations, while Spain usually appeals to baby-boomers looking for an apartment on the coast. However, demand will continue in these areas because they are close to the UK and are well-known to buyers.


Bulgaria saw a number of retail property projects in 2006. According to predictions, the property market will see office project execution in 2007.

Such projects will be carried out in Sofia, as well as in other bigger cities, Capital weekly reported.

Most such projects were already launched in the coastal city of Varna. Analysts said that new developments can be expected soon in Plovdiv. The good location and proximity to Sofa draws increasing number of investors to Plovdiv.

Varna turned out to be the second most attractive city after Sofia when it comes to office property projects.

The first such project to be started in the coastal city was Business Park Varna. Upon its completion, the business park will feature nine buildings and an area of 120 000 sq m.

Several investors expressed interest in carrying out office property projects in Varna’s centre. At the moment, office rents in Varna vary between six and 14 euro per sq m.

Despite its potential, Plovdiv still lags behind Sofia and Varna. The proximity to Sofia is a good factor but also turns investor interest directly to the capital, analysts said.

Major companies prefer to construct on their own office buildings in Plovdiv and the number of constructions offering office property for rent is limited, Capital reported.

Office rents in Plovdiv vary between five and 10 euro per sq m. In the most preferred central locations rents can reach up to 12 euro per sq m, the report said.

Demand for office spaces exceeds the demand for residential areas

High interest in modern warehouses resulted from the insufficient number of renewed such facilities, real estate consultant Colliers International said. The demand for warehouses will continue to increase in connected to EU food industry requirements.

The demand for up-to-date warehouse facilities in Bulgaria is higher than the demand for residential property.
Supply on the residential property market is too high, Colliers said. The demand for residential buildings in Sofia is now higher than the supply but the tendency will change in the near future.

Another tendency on the property market according to the research of Colliers is the increasing demand for office space. Demand and supply increased by 27 per cent in 2006 and will continue growing.

The demand for office space in the outskirts of the cities also increased, Colliers said. The highest prices are seen in city centres, where the monthly rent ranges from 12 to 22 euro per sq m.

Larger office venues also became more popular in Bulgaria, in contrast with tendencies in neighbouring countries like Serbia and Macedonia.

Monday, February 12, 2007

British interest in Bulgaria goes up

Over the period of one week, two British print media published articles saying that Bulgaria’s real estate sector was among the most attractive in Europe.

On February 7, the Guardian reported that Bulgaria, together with Poland, Estonia and Denmark, was among the European Union countries with a steady increase in property prices in 2006. The Guardian quoted a survey done by the Royal Institution of Chartered Surveyors, which analysed price growth in 26 European countries.

On February 5, the magazine A Place in the Sun reported that Bulgaria was the third most-popular country for investments in real estate in Europe. Bulgaria was outranked only by Spain and France. Well-established locations started to lose their market share at the expense of new destinations like Bulgaria, Dubai and Cape Verde. In such untrodden locations, prices for real estate were much lower, especially given the rising prices and interest rates in Great Britain, the magazine said. Turkey, Cyprus, Greece and Portugal were also among the top 10. However, as a result of the oversupply of real estate in some parts of Bulgaria, prices in this country would probably remain relatively low, the magazine said.

In view of this, two reports in the news about a 235 million euro British investment in Bulgaria did not come as a surprise. At the beginning of the month, Bulgarian Land Development (BLD), a London-listed Bulgarian property developer, said it would invest in five residential projects in Bulgaria, worth a total of 235 million euro. The developments are in the Black Sea resorts Albena and Sozopol, the winter resorts Pamporovo and Bansko, and Sofia, BLD managing director Hristo Iliev said.

The Harmony Hills apartment complex near Albena will include 202 apartments. Buyers have reserved 75 of the flats and signed preliminary contracts for the purchase of 53 flats, evidence of the interest shown by British clients. Construction on the Harmony Hills complex is expected to kick off in February and to be completed in 15 months. According to Iliev, all apartments in the Paradise View complex near Sozopol have been reserved. BLD developments in Sozopol, Pamporovo and Bansko feature a total of 149 apartments, as BDL bought the three projects in October 2006 for 6.8 mln euro ($8.8 mln euro).

The company’s fifth project, BLD Sofia Tower, is a luxury apartment building where flats are selling at 3000 euro a sq m.


Bulgaria's EU accession failed to cause significant change in the local property market, Forton International Property Adviser representative Valeri Vulchev said.

An increasing number of conservative investors was interested in the Bulgarian property market, Vulchev said as quoted by Focus news agency.

An investor carrying out a project costing at least 30 million euro in less then five years is considered conservative, Vulchev said.

Such investors were interested in Bulgarian real estate because the market was undeveloped and limited as compared to the European property market, he said.

Mostly German investors are interested in Bulgaria, but the number of foreign investors will increase.

Vulchev said that the Serbian property market was less developed than Bulgarian one. Still, prices were higher because a number of Serbians worked abroad but invested their money in Serbia.

‘Significant rises’ in Maltese property prices

Malta and Cyprus have had significant price rises again, reflecting their attractiveness to English speaking sun-seekers, said RICS (Royal Institution of Chartered Surveyors) in its European Housing Review 2007.

RICS is the largest organisation for professionals in property, land, construction and related environmental issues worldwide. Its latest review, created with the support of Savills, looks at the performance of 18 European housing markets in the preceding calendar year, analysing trends across the continent in areas such as inflation, building activity, mortgage markets and turnover.

Key messages:

1) Europe’s housing markets did not cool in 2006 after interest rate rises and the majority were still experiencing double-digit house price inflation;

2) Transactions and mortgage borrowing were strongly up through most of Europe;

3) The European Central Bank’s (ECB) interest rate hikes have not been fully passed on in higher mortgage rates and seem to be having limited impact on housing markets;

4) The rate of house inflation declined somewhat in France and Spain but rose in Ireland and the UK;

5) Prices in Germany remain static though the house price slump seems to be over as the economy picks up;

6) Small countries are having the biggest house price rises, including Greece and Ireland and countries in Scandinavia;

7) The smaller traded markets of central and eastern Europe, the Baltic States, Poland, Bulgaria and Romania are still experiencing major house price growth.

Several countries have experienced slow price growth in recent years, notably the Czech Republic, though price rises are generally stronger in up-market sectors. Hungary remains tranquil in real terms, partly reflecting economic and political difficulties, the RICS added. Croatia recorded no price change at all (at least in the first half of the year) although there are hot spots in the holiday areas.

Poland seems to be a new hot-spot, with Warsaw prices rising by a third in 2006 and in Krakow by even more.