Latest Property and Economy news from Bulgaria. News for Visitors and Investors

05.12.2007 Luxury property market in Bulgaria is developing

Luxury estates will appreciate in value by 15 to 20 per cent in 2008, but prices of other residential accommodation are likely to stabilize or even lose value, Orlin Vladikov, a member of National Real Property Association and CEO of Orvitex, said in an interview with the private channel bTV on December 2.
According to Rosemary Wellings from the Marbella office of Sotheby's Realty company, the luxury sector is less vulnerable to market fluctuations and a reliable investment in the long run.
Holiday units, situated in coastal and winter resorts, account for more than 90 per cent of luxury estate transactions in Bulgaria, Nikola Stoyanov, managing director of Lux Imoti property agency, reported at a company news conference held last week. He noted that only 5 per cent of luxury establishments in Sofia, actually comply with generally adopted standards for this type of estate.

04.12.2007 Residential real estate market in Sofia undermined by increased supply, told brokers

A serious threat to the residential property market in 2008 is the increasing supply of newly built homes. New findings indicate that they already leave behind demand, according to research by the Yavelna Real Estate Agency.
Only about 20-25% of apartments in the centre of Sofia have been sold successfully, according to the agency. The others have either been sold at a decreased price or after considerable time on the market.
Agencies take an average of about four months to sell an apartment in the centre of Sofia against an average 60 days for apartments swomwhere else, an estate agent told 24 Chassa Daily.
Apartments offered at prices biger than 1500 euro a sq m are the most difficult to sell, besides those with exceptional location, brokers told. These are apartments located in the prestigious Doctors' Garden area, and now Moskovska, Slavyanska and Aksakov central streets, as well as the area around Zaimov Park (Yanko Sakuzov Blvd.)
Currently, 1300 estates are offered on the market, situated in the centre of Sofia. 82 % of them are apartments. Half of them are three-bedroom apartments, according to Yavlena research.

03.12.2007 EBRD lends 6,75 million euro to Bulgaria's construction industry

The lender said in an official press release, that the EBRD (European Bank for Reconstruction and Development) is supporting the fast-growing Bulgarian construction industry with an 6.75 million loan to a brick plant near the town of Lukovit in north-western Bulgaria.
The Bank's finance embrace a 6.75 million euro loan to Wienerberger Bulgaria, a wholly-owned subsidiary of Wienerberger AG, one of the world's largest producers of bricks.
The EBRD finance will be used for the reconstruction and modernisation of the existing Lukovit brick plant, 120 km north-east of Sofia.

01.12.2007 Land consolidation would favour a well-developed agricultural branch

Prices are expected to grow by 20 % over the next year, Vesselin Petrov forecast, but only well-managed and well-maintained consolidated plots will gain value. 76% of the exploited agricultural land in the country is concentrated in large-scale farms of more than 10 000 hectares, which account for only 0.5% of the total number of agricultural farms in Bulgaria, Byuarhan Abazov, deputy minister of Agriculture and Food Ministry, told at a news conference held on November 28.
Bulgaria has about 5.8 million hectares of agricultural plots of land and only 3.8 million of it is cultivated this year, Vesselin Petrov executive director of ELANA Property Management, announced.
A major problem confronting Bulgarian agriculture is that land is fractured - there are about two to three million registered owners of agricultural plots, which translates into small plots and many owners. The largest landowners are municipalities (0.4 million hectares), the government (0.2 million hectares), REITs, investing in agricultural plots of land (they had a total of about 50 000 hectares in 2006, currently own about 100 000 and in 2008 are expected to get hold of 200 000 hectares). They all have to colaborate in order to achieve land consolidation, which in turn, is an expedient to developing a modern and efficient husbandry sector.
The average price of a hectare of agricultural land in Bulgaria is 2800 leva. Plots of land in Dobroudja command the highest prices nationwide (3500-4000 leva) and lands in northwestern Bulgaria sell the cheapest - 1500-2000 leva. One of the causes is that residents in these regions are migrating and selling their properties, which elevates supply and keeps prices down.

30.11.2007 The mall in Veliko Turnovo set for sale in New Year

European Convergence Property Company (ECPC), the investment fund that owns Central Mall in Veliko Turnovo, is usually scrutinising tender offers from potential purchasers the fund's officials said in a statement to the London Stock Exchange.
The company expects to finished the transaction at the turn of 2008.
European Convergence Property Company ' s representatives did not comment on details of the deal. However, according to the advertisment most of the mall's retail areas are already leased.
The owner reported some building defects in the commercial building, which would be removed by the contractor, according to the terms of the consent for the establishment's sale.
European Convergence Property Company officials firstly reported the possibility of a future sale of the establishment in August this year. At that time the company struck a transaction for the sale of its three malls in Romania to the German DEGI Deutsche Gesellschaft fur Immobilienfonds m.b.H (DEGI), a property subsidiary of Allianz Group. The 110.5 million euro transaction was completed in October, delivering 6.4 to 7.2 per cent in yields for the three retail units.
European Convergence Property Company explained their exodus from Bulgaria and Romania and the change of their investment policy through an original "huge unprecedented investment interest toward the region" and a subsequent squeeze of returns on investment in the market.

29.11.2007 Bulgaria's town of Gabrovo to obtain its first mall

Construction of Terra Centre Mall in Bulgaria's central town of Gabrovo has already started, investors Terahim 97 Ltd have reported.
Terra Centre will be the first vast scale shopping centre in Gabrovo Municipality, home to 76 000 people. The five-floor complex, with a 16 000 sq m gross area, will house retail areas, supermarket, entertainment and restaurant areas, offices for the mall's management and lodgers as well as an underground parking space. Investment in the mall is in the range of 15 to 20 million leva. The project's development is financed by the local DZI Bank. The contractor is native firm Glavbolgarstroy. Consultants and leasing agents of the project are NaiProCon. Talks with potential clients have already started and some popular brands have already give expression interest in renting out mall space. Rental levels are in the range of 15 to 25 euro a sq m. The retail centre will be geared towards the average and unexpensivest than average price range.
“We expect 9 per cent profitability from the project in 10 to 11 years,” the project's consultants told. “And this is a very high yield. In Varna and Sofia malls produce a yield of about 7 per cent and the percentage is even expected to go down. For other CEE countries the percentage is 6 per cent, for example.”
Several investment funds have expressed serious interest because of the high profitability of the project, a spokesperson from NaiProCon told.

28.11.2007 Off-plan apartments in Sofia have registered a 26 per cent grow

Average off-plan prices of two-bedroom apartments in Sofia’s southern districts have risen by 26% over the last six months.
Buxtone neighbourhood recorded the highest growth and Beli Brezi – the lowest.
Currently, Buxtone offers 82 off-plan two-bedroom flats with prices variable between 706 and 1292 euro a sq m. The lowest bid is for a 68 sq m housing unit, which is asking 48 000 euro and will be finished within a year, whereas the most expensive apartment sells at 148 600 euro and will be ready in April 2008.
There are only 19 two-bedroom apartments sold off-plan in Beli Brezi neighbourhood. Prices change between 68 630 and 95 000 euro. The cheapest real estate is for a unit, which will be completed in two years and the most expensive is for a luxury flat, awaiting Act 16.
The largest supply of off-plan housing in the boroughs, based at the skirts of Vitosha mountain, is located in the southern district of the same name. Currently, there are more than 215 unfinished two-bedroom flats on offer, 50 more than six months ago.
Prices are in the range of 786 to 1261 euro a sq m, the cheapest flat being sold at 51 120 euro and the most expensive is asking 164 000 euro.

27.11.2007 Development and reorganizing of cultural monuments

The pending question is whether Grand Hotel Sofia will be the next landmark construction to suffer the fate of the former Serdika Hotel, situated in Sofia’s centre and consumed by fire in April 2007.“Heritage At Risk” was the title of the debate held on November 22 at Sofia’s Central Residence of Architects, chaired by prominent architects Yavor Bankov, Lilo Popov and Zdravets Haitov.
Heritage At Risk is a national campaign for the preservation and restoration of Bulgaria’s historical and cultural inheritance.
The recent announcement of BT Development Services’ intention to reshape the capital’s Grand Hotel Sofia was between the number of “violations” of cultural monuments that triggered the initiative.
A number of noted architects and art connoisseur voiced their concerns about the future of Bulgarian landmark constructions and the invasion of real estate investors into big city centres, so destroying their singularity.
“Each old building is unique. It has an aura of its own and conveys the spirit of the era in which it was built. Iron and glass can deliver no message,” told architect Mila Mineva during the discussion.

26.11.2007 Investors look beyond Sofia for plots of land

Due to high land prices inside the Sofia ring-road, purchasers were increasingly looking eastwards, Pari daily announced.
Large firms were prepared to pay between 15 and 20 euro for land in the Sofia area for the building of logistics centres, according to property agents.
Interest in land had changed eastwards to Elin Pelin and Ravno Pole, but the top prices investors were willing to pay in such areas were lower on account of reduced earnings from rentals.
For near a year, international funds, specialising in the construction and management of logistic centres, had been testing the Bulgarian market. Their plans included large scale projects of tens-of-thousands of sq m east of Sofia's ring-road, but these plans have a hard limit on land prices, Pari daily reported.
International investors would come to Bulgaria with ready equations in which rental prices and building expenses were fixed constants.
A developed infrastructure, access to railway transport, in the neighbourhood of Sofia and the Trakiya and Hemus highways were the main reasons that attracted investors to Elin Pelin and Ravno Pole. The growth interest had led to increased prices for land, which was said to have reached 30 to 35 euro per sq m already.

24.11.2007 Property agency added other 51 flats to its portfolio of luxury developments

Sofia's property agency dealing in luxury rentals, acquired another block of 51 flats in Este Home and SPA complex in Iztok neighbourhood, which was developed by Advance properties. The business transaction amounted to 10 million euro, including VAT.
Termination is expected during the second quarter of 2010.
The compound will feature an office construction, internal garden, shops and restaurants. A luxury SPA centre is planned on its premises.
All apartments in the establishment will offer completely furnished, each one will have an own parking space.
The property agency is in the process of acquiring a 40 million euro portfolio, comprising luxury newly built flats in Sofia's most popular neighbourhoods. The company aims the high end of the rental market - foreign citizens and diplomats, working in Sofia.

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