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Lack of attractive investors in Pleven

Published on: 22/09/2006

The development of the real estate market in Bulgaria started nearly 10 years ago, when the process of gradual renewal of the housing stock began. First in this process were the strongest economically towns – the capital, Varna and Bourgas. Around five years later Plovdiv joined them. In the last two years we have witnessed intensive construction work in the town of Rouse as well. And what is the situation with the smaller settlements? Are there preconditions to attract investments and renewal of the old housing stock? These questions can be partly answered by looking at the development of the real estate market in a town like Pleven. The greatest demand is for residential properties, followed by this for commercial premises, says Eng. Valentina Hristova, director of a real estate agency. Her observations show that in the last few years a lot of foreign companies, which invest in the town, have entered the market. This leads to both better economic parameters and less unemployment and higher standard of living for the people. Offers for two-room and three-room apartments have increased several times for the past year, shows the real estate website imot.bg. At the moment, there are nearly 200 two-room residential estates and another 200 three-room properties in offer. Price increase for the last 12 months is from 2 to 8 per cent. Now it is best to buy an apartment in Druzhba. Price per square meter for both two- and three-room properties is the lowest in the town – 290 EUR/sq.m. 19,500 EUR is the price of a two-room property of 72 sq.m. in Druzhba 1. The next price level at which two-room residential estates are offered is about 400 EUR / sq.m. At this price can be bought apartments in the 9th quarter, Gradska chast, Mara Dencheva, Rouse Blvd, and Grenaderska Street. Over 500 EUR is the square meter in the central part of the town. Three-room apartments in some areas in Pleven turned out to be overpriced and their owners were forced to lower the prices. Such examples are the areas of Gradska chast and the ideal centre, where there is a price fall of 12 per cent. In August last year the price offered per square meter was 527 EUR, whereas today it is 467 EUR. 41,000 EUR is the price for which a property of 90 sq.m. consisting of two bedrooms, living room and dining room with kitchenette can be bought. 30 EUR / sq.m. more will have to pay those who want to buy a similar property built five years ago. The studio flat market is not so well developed. It is interesting that there is demand, there is a limited number of offers and in places with wider choice there is no interest. 30% of all small-sized residential properties offered in the town are in Storgozia and Mara Dencheva. However, demand for both quarters is no more than 8 per cent. At the same time, most candidate-buyers want to have small apartments in the center and in the area of Macedonia square, but the number of offers there is limited. This is one of the reasons why the few one-room properties are 11% more expensive than a year ago. At the moment their price is 446 EUR/sq.m. The lack of a certain type of residential properties in some areas of Pleven helps entrepreneurs, who have decided to invest in the construction of real estate in the town, to choose the right area in which to invest. At the moment most sought after are studio flats and two-room flats and from this point of view are the best choice for investment. A lot of people have big apartments which are difficult to maintain nowadays and want to change them with smaller and easier for maintenance residential properties, says Eng. Hristova. From economic point of view smaller properties are more profitable. We shouldn’t forget the fact that there are also a lot of young people who want to move out of their parents’ home. As for new construction, there are new residential buildings not only in the centre, but in some other areas as well. The quality of construction is very high, says Eng. Hristova. Not only the look of the new buildings, but also the way and methods of construction and the effective use of the natural resources contribute to the better look of Pleven and its turning into a European town. The higher standard of communications and infrastructure are the reason why residential properties in the central parts of the town are more sought after, is the opinion of Ms. Antoaneta Kandjova, director of a real estate agency. We shouldn’t also forget the ‘return of capital’ factor, which is much faster and safer, if the property is in the central part of the town. Price per square metre residential is formed considering a lot of components, but there are few main elements. The most important of them is the price of land. It is really hard to say what the price of land in Pleven is. In one and the same area there are huge differences. For example, in Gradska chast it is possible to buy a terrain for 36 EUR and for 130 EUR / sq.m. If this situation does not change soon, there is a chance that some properties (depending on what price was paid for the land), both residential and office buildings, will be very difficult to sell or will be sold without profit and other will find their new owners as early as on construction stage. To some extent, the reason for this situation is the limited number of offers for terrains. In the centre of the town for example, demand is 9,46% and offers – under 1%. Only 8 terrains with area of under 600 sq.m. are for sale. The construction of new buildings in Pleven increases the number of offers for office and commercial premises as well. Interest in them is also growing. One of the main reasons is that with Bulgaria joining the EU, the requirements for companies are becoming more stringent which leads to increasing demand for administrative and commercial sites. Interest in offices is concentrated mainly in the central part of the town, in luxury business buildings which are not only close to the institutions and state administration, but also in the wide centre. At the moment there are about 30 offices on offer in the town with price per square meter 601 EUR, or 8 per cent more expensive in comparison with August 2005. Properties offered are between 20 and 40 sq.m or over 70 sq.m. Most of them are in the centre of the town. One has to pay 12,000 EUR for a 20 sq.m property in the ideal centre of Pleven. The property is renovated and looks at the main street. Considerably more expensive are offices in administrative buildings. The price of a property of 27 sq.m is 30,000 EUR. One of the biggest offices on offer in Pleven is an entire floor of a building and its unfolded built-up area is 500 sq.m. There are only few offers for offices in the Industrial zone of the town. In the other areas of Pleven there are no offers for offices at the moment. Source: "The Real Estate" Magazine, September 2006

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