Real Estate News

18.04.2008 No Leaps For Interest Rates on Loans in Bulgaria

It is unlikely that interests rate on loans in Bulgaria will increase significantly. That was annonced by the Bulgarian National Bank (BNB) in regards to its quarterly review of the economic and banking situation in the country.
This forecats is made by considering the interest rates hike expectancy in the euro-zone as well as recent activities and progress on Bulgarian market.
BNB's experts claim that global credit crisis does not influence loans interest rates as much as it does in other countries. It is said that the main reason is that there is a strive for competition among all Bulgarian banks.
According to BNB, most lenders prefer increasing the interest rates on already existing loans. This is done in order to restrict early repayments of any loans virtually useless. Experts also say that this way interest rates will make early loan repayment useless.
Last month, several major banks agreed to increase the interest rates altogether with a range for the increase of about 0,25 - 0.5 %
Although it is believed that there will be no additional increases, some people still fear that banks can leave them with their hands tied up by allowing another increase by the end of the year.

17.04.2008 Developing Bulgaria's Agriculture

Bulgaria's development programme for rural areas will be officially launched today. That was announced by 'Agriculture' state fund representative.
As of today, all 28 regional payment agencies will accept projects on two paths - 'Establishing new farms' (with a total budget of 102 million euro) and 'Modernizing existing farms' with a budget of 1,4 billion euro.
By the end of June all paths of the programme are will to be launched. The total amount provided by the EC for rural investments is estimated at 3,24 billion euro.
The first path of the project will allow farmers to apply for funds for establishing new farms or taking over and modernizing existing ones. In this case, they have to submit business plan with detailed description of all necessary actions, investment initiatives and goals. New farmers can receive money for expanding the agricultural land, increasing the number of cattle, re-planting old crops, renovation of the existing buildings, purchasing new farming machinery, etc.
The maximum fund that can be granted by each farmer is 25 000 Euro and will be paid in two installments of 12 500 Euro.
There are several major requirements which applicants must meet in order to take part in the project. They must be registered as 'Agricultural Producers', they must be between 18 and 40 years old and must prove that they have professional expertise in agriculture. Also, they must not be approved for funding by any other paths of the programme.
The second path, 'Modernizing existing farms', grants money for improving the overall production of the farms, introducing new technologies and initiatives to comply with EU's ecological standards. It is also possible applicants to receive funds for introducing HACCP standards and Good manufacture practices (GMP).
The programme is expected to improve Bulgaria's agriculture and lead it to a new level of production. It is now hoped that there will be enough projects to subsidize so that all funds from EU be used.

16.04.2008 In Need of Industrial Properties

Industrial properties are likely to become more and more expensive in the next few years. That is property experts' forecast, which was discussed yesterday at the 'Balkan Real Estate - Bulgaria, Romania and Serbia' regional conference. The conference is held in Sofia on April 15 and 16.
According to real estate consultants, the predicted infrastructural developments, transport junctions, the expected raise of economical growth are key prerequisites for changes in the business property market. The favorable location of Bulgaria in the context of the European Union together with the improvements in tramsport connections will soon form Bulgaria as a logistic destination for many companies operating on the European and Asian markets. The demand of industrial estates is likely to be dictated by large foreign chain-companies and international logistic consultants.
Industrial estate matkert will inevitably surpass changes and prices will grow. The fact that only 14% of all major global retail chain stores and international companies have entered the Balkan markets should be considered sufficient evidence of how the industrial estate market will develop. According to the experts prices will go up, but they are not sure whether the planned industrial projects will meet buyers' quality requirements.

15.04.2008 Vidin-Calafat Bridge Finished By End 2010

The bridge between Vidin and Calafat (Romania) must become operational by the end of 2010. That was reminded to Bulgarian officials yesterday by Jeroen van Oel, representative of the European Commission's directorate for regional policy. Mr. Van Oel met Deputy Transport Minister Vessela Gospodinova, Vidin regional governor Krustyu Spassov, Vidim mayor Roumen Vidov and Calafat mayor Petre Traistaru.
The construction schedule has been alternated to include the four-month delay and the bridge is now expected to be finished by April 2010.
Gospodinova said that the delay was first caused because the project proposed by FCC architects was rejected by state's engineers. Fomento de Construciones y Contratas (FCC) is the Spanish company which was picked for the bridge construction on Bulgarian side. Later, FCC run into regulatory trouble with Romania, but all controversial matters have already been settled, announced Gospodinova.
Funds for the project have been lent by EU's ISPA aid programme and the EuropeanInvestment bank, which will provide 70 million euro each. German KfW Development Bank has also lend 18 million euro. Bulgaria will contribute 60 million in the construction works. Gospodinova also announced that Bulgarian Government is prepared to maintain the balance between the sources if the project runs into new delays.
Spanish FCC was given the permission to construct the 1971-metre bridge and the road and rail infrastructure on Bulgarian side. The whole project is estimated at 236 million euro, 162 million of which will be paid to the Spanish company in charge of the construction.

14.04.2008 Which Sofia Quarter Do You Prefer

Which is the most preferred suburban residential quarter in Sofia? That was asked recently on one of Bulgaria's real estate portal.
The inquiry exclude quarters which are close to the city centre and the ones considered 'worth the distance' such as Boyana and Lozenets.
It turns out that most people were willing to move and live in Mladost 1,1a,2,3 & 4. They were mostly picked for the well developed infrastrucuture (bearing in mind both the existing road network and the new traffic projects) and the new business park which was developed a few years ago. Traffic jams are soon expected to become history for residents of Mladost districts with the new ring road and the underground routes. Although it will take at least two more years for the new underground section to be finished, this does not worry residents at all.
Next in the chart are Vitosha and Lyulin. Mainly because the air is clear and the two are relateviley close to the city centre. Lyulin is also compared to Mladost and many point out even better reasons for buying a property there. Lyulin favors the easy connection to the center via the underground and the relatively good infrastructure - most major boulevards have a satisfactory traffic capacity, one has access to the complex from several directions, there are still well-preserved green areas and have all necessary amenities - most banks already have offices in the area, commercial centers have been developed, enough schools and kindergartens as well, etc.

12.04.2008 Sofia's New Ring Road Behind Schedule!

Land-plot alienation and changes to the original route cause the delay in the construction schedule of Sofia's new ring road. Protracting the expropriation procedures has now led to a six-month delay of construction works, announced Evgeni Marinov, executive manager of Glavbolgarstroy, one of the biggest Bulgarian construction and engineering company.
Glavbolgarstroy (member of the Youg consortium) was contracted to build the new ring road extension. The project cost is estimated at 40 million leva.
Construction works can be completed by the end of the year only in case the contractor manages to catch up and finish the necessary procedures as soon as possible.
The delay was due mainly to the law suits related to the land plots which are lying on the route of the road. Marinov denyed that the project will be further delayed because of the civil claims, filed by landowners against the National Road Infrastructure Fund because of the late compensation payments. It is said that the Road Fund owes landowners a total of 12 million leva.
According to the new design of the road, it will have three lanes and additional two transit ones because of the numerous petrol and gas stations.
Marinov also said that there was one more problem which came up unexpected. All waters from melting snow and rainfalls on Vitosha Mountain practically pours onto the road. Therefore, Glavbolgarstroy's engineers had to build household water and drainage systems, which should be city's responsibility.

11.04.2008 Swapping Forest Lands in Bulgaria

Banning the exchange of forest-lands was proposed yesterday during a press conference in Sofia by eco-activists of the "Sustaining the Nature in Bulgaria" (SNB) coalition. They have suggested that current "re-zoning" of the existing forests should also be terminated as soon as possible.
Forestland swapping has been introduced in order to make the state's forest fund easier to manage. However, it is now used as a mechanism to acquire woodland plots, which are later fully chopped and built up.
A vivid example, given by Vanya Rutarova from Bulgarian Society for Bird Protection, is that of Kaliakra land plots exchanged for land in the Shoumen region. The companies that gained possession of such attractive lands had immediately started regulation procedures in order to start construction works.
The biggest problem and major flaw in the "swapping" procedure is that land which is evaluated at 1500-2000 BGN/hectare have been exchanged for similar land plots with market price of 2.5-3 million Euro/hectare. Konstantin Ivanov explained that the exchange had not been implemented as a market mechanism and that is why only the tax evaluation was used in the procedure.
According to the environmental organizations' representatives there are numerous cases of fraudulent land swaps, many completed with the help of the municipal administrations and even the Ministry of Environment and Water Resources and the Ministry of Agriculture.
Eco-activists reminded that this was not simply a crime against Bulgaria's nature resources, but also against all Bulgarians and the state itself. These procedures encourage corruption among public administration and also leads to incredible financial losses for Bulgaria.
Despite the enormous and overcrowded seaside resort, Bulgaria still has several well-preserved nature areas, which unfortunately are threatened to become new construction sights because of administrative procedures, violated Bulgarian and European laws and corruption driven state resolutions.

10.04.2008 New Natura 2000 Zones Will Irakli be saved

Yesterday the resolutions for establishing 10 new areas protected by 'Natura 2000' were signed by the Environment Minister.
The EU's environmental programme has recently become a widely discussed issue, raising voices of protest of both eco-activists and land owners. The same day the ministry's press service announced the new protected areas, eco-activists from 'To Save Irakli' blamed the minister that he had allowed a local company to quarry rock in the area of Irakli and Emona, which is supposed to be part of 'Natura 2000' eco network.
The new zones included to the programme are Kotlenska Mountain, Berkovitsa, Zlatno Pole, Zhrebchevo Lake, Kamenski Bair, Boboshevo, Kocherinovo, Dolna Koznitsa, Osogovo and Skrino. Objections, proposals for changes and any written statements can be presented at the Ministry of Environment and Water Resources until May 9th.
Chakurov has decided to give a private company the right to prospect more than 100 ha of land for rock quarry and sand extraction, despite the "re-zoning" ban for Natura 2000 areas. The current ban for Emona area will expire in July 2008.
The company (named Baron and registered in Haskovo) intend to apply for concession of the area. Emona's landowners suspect that this way the Government will try to force them to sell their lands.
According to Donka Kitanova, chairperson of the association of landowners in the Emine-Irakli area, this is an attempt these land plots to be actually stolen. Currently, prices in that area are aorund 200-250 euro/sq.m for agricultural unregulated land. If the alienation of the land passes approval, prices will ineviatbly fall down significantly.
The area around the village of Emona now the most controversial issue related to real estates market. Located north from the Sunny Beach resort, its virgin nature is still untouched by building companies. The beach of Irakli is one of Bulgaria's most beautiful places combining the crystal clear waters of cape Emine and the wonderful steep cliffs of the Balkan Mountain covered with green forests. Also it is not popular among foreign tourists which turns it into a real get-away and a place to escape from the overcrowded resorts on Black sea coast.
The land plots in that area are mainly owned by local people from the village of Emona, who hope to be able to sell their land. The extremely high prices and the high chance the area to be included in 'Natura 2000' protection plan are currently setting back property developers to invest in that area.
However, the governmental plans to alienate the land are suspected to intend to devalue the plots in favor of a particular private company, which will later develop the area as a tourist destination and will both destroy the nature of the area and leave the locals deceived and practically robbed.

09.04.2008 Private Sector Spends More Than It Earns!

IMF (International Monetary Fund) has cut the forecast for Bulgaria's economic growth. According to IMF the the raise will be of no more than 5.5% for 2008 and 4.75% for 2009. That was announced at a press conference yesterday by Albert Jaeger, chief of IMF mission in Bulgaria.

Mr. Jaeger also said that despite the concerning levels of inflation in 2007, prices are not likely to sustain their upward trend. It was said that last year's inflation was caused by weather factors - drought, and a hike in utility prices.

IMF experts Jaeger and Juan Fernandez-Ansola (regional representative for Romania and Bulgaria) met state officials from the Finance Ministry, the Bulgarian National Bank, the Financial Supervision Commission, as well as private business representatives, in order to discuss the outlooks and the impact of the global financial markets on Bulgarian economy.

Officials are concerned about Bulgaria's mixed signal over the last few years. One one side, Jaeger said, are the economic growth and all-time capital inflows, while on the other are the double-digit inflation and high account deficit. This indicates that the private sector now spends more than it actually earns.

IMF officials still believe that although the impact of the global financial recession on Bulgaria has been restricted, there might be delayed knock-on effects. If this happens, it will lead to the cut-down of exports and a decline of the capital inflows.

In addition, IMF officials advised that Bulgaria should keep high fiscal surplus. They warned the Bulgarian Government to be careful about the public sector reforms. They reminded that they should be considered from financial point of view and not political.

08.04.2008 Re-locating Varna Marine Port

It is now clear where the new container terminal of Varna Marine Port will be located.
It will extend on over 17 hectares on the northern coast of Varna lake. The plot will be handed over as soon as Varna municipality and the Government sign the memorandum for reconstruction of the area. The whole project includes the re-location of the entire port to the western side of the lake and construction of holiday/tourist areas on the current grounds of the port.
The total cost of the project is estimated at 500 million euro and part of it will be financed by the Japanese Bank of International Co-operation, which has approved a loan of 226 million for construction of cargo terminals in Varna and Bourgas Ports.
Parliament is expected to approve the loan by the end of June and to appoint a concessionaire by the end of November 2008.
If the project passes the necessary approvals with no delays, the construction works will start in August 2010 and should finish in 2014.

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