Bulgarian real estates

The market for office terrains in Bulgaria is expected to stir soon, because of the possibility to rent a high quality office at a good location for a favourable price, notes the periodical Property Wire citing Anton Slavchev – manager of offices and business parks in Colliers International.

The prices of business areas in Bulgaria’s Sofia dropped drastically with 10-15 euro per square meter, which stimulates the potential leaseholders to seek better offers at lower prices.

The drop of prices is not only due to the decrease of customer interest during the crisis, but also due to the surplus of offers, a result of the hyperactive construction of buildings that flooded the market with offices. The companies that are closing down and offering their offices are another factor.

According to Slavchev, the prices in Bulgaria are still determined by investors. They take into account two factors: the level of completion of the projects and the process of filling the office buildings to their real capacity. The analyzer explained that investors are beginning to realize that their empty buildings bring them no profit and are now trying to be more flexible to cover up the losses.

Meanwhile, the national statistics agency and the researches of several other agencies noted a drastic drop of construction of buildings in Bulgaria.

“For the first time in two years, the Municipality council of Sofia (SOS) received a full report of the municipal association “Sofiiski imoti” (Sofia real estates) certified by an auditor,” stated the chairman of SOS Andrey Ivanov.

“Sofiiski imoti” ended the previous year with accounted profits of 403 000 leva. After taxation, the profits are 310 000 leva, added the chairman of the business commission of SOS Danail Kirilov.

The association has an income of 4 221 000 leva. The main share of the income is from services – 2 039 000 leva, followed by the income from rent – 1 213 000 leva, and the sale of long-lasting material assets – 638 000 leva.

The column “material assets” does not concern the sale of real estates, clarified Kirilov.

According to him, the Municipality council will receive 80% of the dividends, after the allocation of 10% for the “Reserve” funds.

“Sofiiski imoti” entered an engagement to pay the full amount of the dividends for 2007. Only 20% of the money have been paid so far.

The scandalous association became popular after the disclosure of criminal deals that caused losses of over 2 billion leva to the municipality. Many ex-employees, including the two ex-chief executives Toshko Dobrev and Petar Savov are currently facing accusations.

The lawsuit has been delayed many times due to various reasons. No one has been sentenced yet.

An analysis of Raiffeisen Estates EOOD, based on the official research of the National statistics institute (NSI) among real estate companies in Bulgaria concludes that the number of real deals on the real estate market registered a cut of 42% for the entire country and 58% cumulatively for Sofia for the first six months of 2009, compared to the same period of last year.

Buyers in all sectors are waiting, and the investors that favour risks and rely on long-term benefits for their fortunes are the only ones active on the market.

Buyers that have enough finances and for whom the purchase of a real estate is a necessity are somewhat active, but very far from the levels of the first half of 2008.

Because of the low activity of buyers, the number of deals is comparable to the levels of 2005, states the analysis. The buyers of real estates expect even lower prices in the future.

With the exception of the planned expansion of the large chain stores, there hasn’t been a singe investment purchase or sale of a terrain for a large project since the beginning of 2009, note Raiffeisen Estates.

The time for choice and negotiation until the conveyancing completion of the deal has tripled from an average of 20 days to 60 days. There also hasn’t been a deal without a significant lowering of the price.

An analysis of Raiffeisen Estates EOOD, based on the official research of the National statistics institute (NSI) among real estate companies concludes that the number of real deals on the estate market registered a cut of 42% for the entire country and 58% cumulatively for Sofia for the first six months of 2009, compared to the same period of last year.

Buyers in all sectors are waiting, and the investors that favour risks and rely on long-term benefits for their fortunes are the only ones active on the market.

Buyers that have enough finances and for whom the purchase of an estate is a necessity are somewhat active, but very far from the levels of the first half of 2008.

Because of the low activity of buyers, the number of deals is comparable to the levels of 2005, states the analysis. The buyers of real estates expect even lower prices in the future.

With the exception of the planned expansion of the large chain stores, there hasn’t been a singe investment purchase or sale of a terrain for a large project since the beginning of 2009, note Raiffeisen Estates.

The time for choice and negotiation until the conveyancing completion of the deal has tripled from an average of 20 days to 60 days. There also hasn’t been a deal without a significant lowering of the price.