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High capital return from investment in real estates in Sofia
Published on: 13/11/2006The economic stability and significantly
lower real estate prices in our country, compared to those in the countries in
Western and Central Europe are the two main factors which make most foreign
businessmen choose
as the place for their investments. During the last three years there has been
a serious price rise in the countries such as
The United Kingdom,
and
This led to higher profitability, made real estate owners richer and they
started looking for other places in which to invest their money. Countries from
Eastern Europe and particularly
are center of attraction for investors mainly because of the high
profitability. For office areas this profitability is 9.7% in
and 9% in
In
Countries) profitability is around 7%. In
and
is below 6%.
What
is specific for almost all Balkan capitals is that real estate trade in them is
considerably exceeds this in the other cities of the Country.
exception. Most office buildings, commercial centers and hypermarkets are being
built namely in
The biggest share is this of office areas.
According to data from a real estate web
site there are 1500 offices for sale, and 30 000 office rentals. The
average selling price per square meter for offices in
EUR/sq. m. for the other areas. This price is times lower then in cities such
as
and
As for rental price per square meter which in
is 12 EUR/sq. m., it is again significantly lower – in
the average rental price is 18 EUR/sq. m. and in
disadvantage of our northern neighboring country is that the market for office
areas is extremely restricted and about 50% of the premises are rented out even
before the buildings are finished. On the other hand in
around 35%. Such are the parameters of a market controlled by leaseholders –
offering considerably exceeds demand and consumers are gradually increasing
their requirements – so the market is segmented. In 2005 this process started
in
In
the same year the total area of offices of the highest class “A” in Sofia
reached 134 000 sq. m., which is 6 % more compared to 2004. This year it is
expected most that area of the most prestigious business premises will increase
with about 20 000 sq. m.
In
the capital of
the total area of class “A” office premises is 1 031 000 sq. m. ; at the moment
150 000 sq. m. more are under construction and are expected to be on the market
in 2006.
The
number of luxury offices in
is significant – around 2 330 000 sq. m. Last year, however, there were almost
no construction of new office buildings. This is the reason why it is expected
in 2006 rental price level there to rise for a first time in 6 years.
Unlike
where office premises market is well developed, there are few offers in the
Respectively, prices of business properties are several times lower – offices
are sold at 235 EUR/sq. m. and rented at about 5 EUR/sq. m.
As
the biggest city in
best developed commercial center in the country. This is why there are a lot of
offers for sale and rentals of shops.
There are more then 800 offers in the center
only. Demand in this area is also great, because the most famous commercial
streets are there. In the worlds’ list of shop’s rental prices boulevard
“Vitosha” takes the 22nd place. At the moment they are around 40
EUR/sq. m., but most of the premises are in commercial centers. Actually there
are no vacant shops with shop windows facing the boulevard as rental contracts
for those types of estates are usually long – term. To compare – commercial
estates in the rest of the central areas are rented at 33 EUR/sq. m. and in
non-central areas 12 EUR/sq. m. The difference in selling prices between the
most prestigious quarters and the rest is also big – 1475 EUR/sq. m. against
860 EUR/sq. m. The next most popular area for shops is Lozenets. There are
about 200 offers there and the average price of a square meter is 1200 EUR. In
the prestigious residential areas such as Boyana, Dragalevtsi and Simeonovo
there are particularly no rental or sales offers for commercial estates.
In
the
is in the town of
where the price per square meter is 700 EUR.
It
is expected that in 2006 there will be huge interest in industrial estates.
Such
type of properties there are in Kremikovtsi, Gara Iskar, Orlandovtsi and
The average price of industrial estates in the capital is 226 EUR/sq. m. The
cheapest is in Kremikovtsi – 212 EUR/sq. m. At price a bit less than 300 EUR
are offered premises in the area of Gara Iskar and the most expensive they are
around the airport – 450 EUR/sq. m.
For
are in Kostinbrod and greatest demand – in Samokov. Average price of industrial
estates is 174 EUR/sq. m. According to data from IMOT.BG there is dramatic
increase in rental offers for industrial properties. Since the beginning of
this year nearly 150 estates have been offered for rent whereas 12 months ago
the number of offers was less than 40.
Most
offers are in Iliantsi, Orlandovtsi, Voenna rampa, Zaharna fabrika and Drujba
1. Rental price per square meter varies between 2 and 5 EUR. Most properties
are old buildings. Part of them are renovated in order to suit wider range of
clients. The most expensive industrial estates are in Ivan Vazov – they are
traded at 5.45 EUR/sq. m. ; the cheapest are in Lulin 8 – 1.91 EUR/sq. m.
Foreign investors are most interested to
invest in land.
As a
whole this is the most dynamic market sector. Since the end of the summer of
2005 there has been an increase in offers for plots in some suburban areas in
southern and western parts of the capital. Number of land offers in Vrazhdebna,
Vranya, Gorubyane, Druzhba 2, Mladost 3 and 4, etc. has doubled. People who
want to own plots in the elite areas Dragalevtsi, Simeonovo, Malinova dolina,
and Vitosha have wider choice now.
According to analysts almost always when there
is a slight price rise in this real estates market segment, the offering increases
as well. Land prices in areas with doubled offering, however, have stayed
nearly unchanged for the last half a year. In some areas such as Banishora, for
instance, there is even fall in prices.
At
the moment there are 35 plots for sale at prices of 331 EUR/sq. m., six months
ago investors could choose among 18 plots only at price of 355 EUR/sq. m.
In
the middle of February there were nearly 400 new industrial plots on the
market. Thus the 250 plots offered in the beginning of the year increased to
nearly 700. Most offers are in Druzhba. Investors can choose from 100 plots
with average price 85 EUR/sq .m. 50 plots are for sale in the area of the
airport and as many in the areas of Gorublyane and Mladost. Prices are around
60 EUR/sq. m. and the exception is Mladost with 89 EUR/sq.m.
In
the
region most offers are focused in the towns of Kostinbrod and Bankya. Prices
per square meter are respectively 14 and 15 EUR. On offer are about 30 plots in
each of the towns. As for villages the widest choice for the investors is in
German, Gorni Lozen and Kazichene. Plots over 3000 sq. m. are on offer. Most
estates for sale in German are close to the ring road and this is the reason
why prices there are around 47 EUR/sq. m. The biggest plots are offered in Kazichene.
A plot of 24 decares can be bought at 27 EUR/sq. m. with average price for the
region 29 EUR/sq. m.
Number of warehouses rented in the capital is
twice as offers for sale. Rental price per square meter for this type of premises
varies from 2.50 to 5 EUR. Most offers are concentrated close to the exits of
Sofia – Voenna rampa, Gara Iskur, Druzhba. Around 20 estates are on offer
there; the most expensive it is in Voenna rampa – 4.11 EUR/sq. m.
In
the central city part warehouses can be rented in the areas of “Pop Bogomil”
street and “Stamboliiski” and “Todor Aleksandrov” boulevards. Properties of 70
sq. m. can be rented for 130 EUR monthly. Bigger warehouses can be found around
Stochna gara and Tsarigradsko shose. If you want to use a 550 sq. m. property
in “Tsarigradsko shose” boulevard you will have to pay 2500 EUR.
There are few warehouses offered for sale.
According to experts for the past year prices have increased in some areas.
This is the reason fro the big price range. Storage premises can be bought in
Iliantsi at 304 EUR/sq. m. and prices reach 545 EUR/sq. m. in the area of the
airport.
According to data from the web site demand for
buying warehouses is greater than for renting. Most clients are oriented toward
purchasing warehouses in Mladost 1, Gara Iskur, Vrazhdebna and Ovtcha kupel 1,
but in lot of these areas there has not been any offering for months. Mladost 1
is the most popular area for renting a warehouse. For the last three months
demand has exceeded offering 7 times. This ratio is similar in Krasno selo and
Slatina.
Price and the intensity of offering are the
main factors which determinate how much certain area is good for investment.
Since the beginning of 2006 the number of offers for industrial plots in the
capital has doubled, which shows that
will develop as the center of economy.
Source: Bulgarian Properties
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