Yearly Archives: 2013

The office market in Sofia is driven mainly by the international companies that have moved their business in the capital of Bulgaria. These companies are looking for high-quality office premises that are positioned in office and business centers of class A that are characterized with excellent characteristics, many facilities and good location that allows for an easy access. The top office buildings of the highest class in Sofia take not more than 20 % of the entire number of available office premises and their total sq.m. coverage is around 330 000 sq.m. However, these are the office premises that provoke the interest of the big companies and usually the 90 % of the office premises in the business buildings of class A are rented.

The new office centers that opened in 2012 are mainly concentrated in the eastern and southern areas of Sofia city, with the focus being set on Bulgaria Blvd. As we have pointed out in many of our previous articles, the office buildings that provoke the attention now are the office zone of Bulgaria Bvd. With its 30 000 sq.m. of rental premises, followed by Vrtigo Business Center with it 18 000 sq.m. of area. The zone along Bulgaria Blvd. is moder and easily accessible, close to the city center and near many facilities, which increases the interest of the companies that are looking to relocate or to settle their first office in Sofia. The prognosis in front of Sofia city office market is for a stable year ahead with 12 Euro per sq.m average price for the offices in the center of Sofia and 9 Euro/sq.m for the offices in the suburbs of the city.

The office market in Sofia city will be stirred next year with three new projects that will be completed and will enter their doors for new tenant companies. The three office buildings will add approximately 100 000 sq.m. more to the already existing office premises in the capital of Bulgaria. This new office area is above the annual percentage of the square meters of offices that were completed in the years before the crises, but at the same time is below the annual level of office demand in the period of the crises. In 2014 will be fully completed the administrative centers Capital Fort on Tsarigradsko Schousse Blvd, the Millennium Centre and the City Tower on Macedonia Square.

The supply of office space nowadays is approaching with slower steps if compared to the supply in the years before the crises, but still the number of offices provided is going up. According to the statistics, at the end of 2012 the office premises offered were 1.60 million sq.m, marking a 7 %year increase. The office premises that were completed were estimated to 108 000 sq.m., while the rented office premises for the same period were 85 000 sq.m. in total.

The main tenant on the office market remain the international companies, which are moving their offices on the territory of Bulgaria. In general these are companies from the IT sector and the pharmaceutical sector, which are looking for high-quality office premises in office buildings of class A that are easiy accessed via the public transport and feature parking zones. The real estate agents believe that the same parameters will form the office market search in 2013.

Sofia ranks third in the world as far as cheap offices are concerned. The average rental for an office in the center of Sofia was 14.75 Euro per sq.m a month in 2012. Lower rental levels of offices are available only in the town of Kito in Ecuador and in the city of Sandan in the South African Republic. The data was collected and analyzed by the consulting company “Cushman and Wakefield”. The lower rental levels of Sofia offices led to the decrease in their overall value. At the same time however the local and international business companies have a good choice of high-quality offices at reasonable and affordable prices. That fact made Sofia one of the preferred places for making business and investments in Eastern Europe. The country has attracted the interest of the companies in the outsourcing industry. This is so, as the country could offer excellent services and production and low expenses for rental, taxes and labor.

The only capitals that can rival Sofia in terms of affordable offices are the Riga with its 16 Euro/sq.m. and Tallin with its 17 Euro/sq.m. At the same time, the average rental price of the offices in Bucharest is 28 Euro/sq.m and 18 Euro/sq.m. in Belgrade. However, the cheap and good offices in Sofia are not the only thing that attracts the foreign companies. The country has highly qualified people, stable micro economy and political situation.

At the end of last year, the demand and the supply of offices in Sofia reached a certain balance level. This happens for a first time in the last four years. The new office buildings in Sofia that were completed and became available for exploitation were almost 140 000 sq.m, while the number of the rented Sofia offices reached 97 000 sq.m. making an increase of 10 %. The prognoses seem good, as in the last three months of 2012 the rented or purchased offices in Sofia city were more than 25 000 sq.m. Many of these new and modern offices in Sofia were taken by new companies on the Bulgarian market or by existing companies that are expanding their business.

The available office premises in Sofia’s best business centers are not many, as they are quickly invested into or rented. The office centers in Sofia that provoke the attention are the ones with top location and fast access, excellent quality of the construction and parking zones. The interest of the foreign companies is concentrated in the business buildings along “Tsarigradscko Schousse” Blvd. There are a few postponed projects for modern office buildings on Sofia’s boulevard “Todor Alexandrov”, which are also expected to provoke the attention while the construction starts.

The prognoses of all real estate agents are for stable office market in Sofia during year 2013, following the price levels from 2012. According to the experts, in the first six months of the year there will be no change in the rental levels of Sofia offices. At the same time, the total coverage area of the modern office buildings in Sofia in 2013 will increase, just as it did in the second half of the previous year. During 2013 two huge office centers are to be completed and open their doors to the companies and the investors. These are the Vertigo Business Center and the office zone of Bulgaria Mall, both placed along “Bulgaria” Blvd. In this way the upper part of the boulevard will provoke the interest of the large companies that plan to open their offices in Sofia. A year later, in 2014 will be completed three other major office centers. These are Millennium Centre, City Tower and Capital Fort, which will add another 100 000 sq.m. of office area in Sofia.

The new, modern and functional offices will most probably be invested into or rented by famous IT companies and outsourcing companies, which were the main driving force of Sofia office market in the second half of 2012. The main characteristic of these business centers is that they offer large office premises that could be rented by big companies or ones that expand their business. According to a recent research, the main factor that plays role in choosing one business center to the other is the location and the easy access by public transport and automobile.