Commercial Real Estate Market – Bulgaria
Atanas S. Garov Managing Director, Bulgaria
Commercial Real Estate Overview
Strong demand across all segments Low vacancy levels Significant pipeline of new supply Relatively small inventory Market saturation is further ahead
Offices & Business Parks
Inventory: 606,500 m2 Absorption: exp. 120,000 m2 in 2007 Vacancy: 5.1 % Rental rates: EUR 12-26/m2/month Expansions and relocations In Southeast Europe all markets have less than 1 m2 per capita, while in most Western European major cities the figure is above 3.5 m2. (EMEA Office RE Review 2007)
Retail
Inventory: 105,500 m2 Vacancy: 0%
– Mall Plovdiv: > 70% occupancy – Carrefour Tzarigradsko Mall: > 60% occupancy
Rental rates: EUR 30-55/m2/month (shopping malls) New retail formats Retail chains expansion Increase in disposable income
Retail
Supply is still substantially lower than in comparable cities
City Warsaw Prague GLA per capita (m2) as of 2006 0.71 0.49
Budapest
Sofia
0.39
0.055
Logistics & Industrial
Inventory:
– Sofia: 1.2 mln m2 – Varna: 300,000 m2 – Plovdiv: 450,000 m2
Vacancy: 8.5 % (Sofia) Prime rents: EUR 5.5/m2/month (Sofia) Predominantly owner-occupied Modern speculative supply will be available in 2008 Demand is gradually increasing EU regulations for storage of goods
Logistics & Industrial
City Prague Budapest Warsaw Sofia Speculative warehouse stock per capita (m2) 0.761 0.487 0.573 0.059
LPV occupancy: >75% of first buildings leased IPSE occupancy: more than 15% leased/under negotiation
Conclusions
Strong fundamentals for the expected growth
Strong interest from investors in all segments Strong interest from lending institutions Increasing competition among projects
Thank You!