The prognosis for 2015 made by almost all realtors working on the Sofia office rental market are for increased rental levels. According to the real estate agents from different consulting companies, the offices of the highest class A will be offered for rent at approximately 13 Euro/sq.m. Even if being the most expensive ones, these Sofia offices of the highest class A are still the ones in greatest demand due to their amenities and efficiency indicators.
The data provided by the realtors reveals that the large office buildings in Sofia only 4 % of the office premises are still available. It should also be noted that large offices in Sofia with more than 2000 sq.m are extremely hard to find. The prognoses for 2015 that concern the office market in Sofia are for an increased demand for office premises of the highest class A. The companies that show strongest interest towards the office market come from the outsourcing and the IT sphere.
In the beginning of March Bulgaria launched a national campaign in support of its accession in Schengen. According the Deputy Prime Minister for European Policies Coordination and Institutional Affairs Meglena Kuneva, the accession of the country in the travel free Schengen zone should become a national task. Bulgarians should be aware that Schengen is a synonym of security, economy and prestige.
The joint efforts of the Deputy PM, the Justice Minister and the Culture Minister resulted in the campaign “Bulgaria in Schengen. It’s Time!” The campaign was opened at the Archeology Museum in Sofia. In the video it is stated that the double standard concerning Bulgaria’s accession in the Schengen area is unacceptable.
The video comes in several language versions and presents Bulgarians from all spheres of life, smiling, with the national flag in the background. Upon launching the national campaign, the Deputy Prime Minister stated that the accession of Bulgaria into the Schengen zone will become a fact when the public opinion on that matter is united.
The realtors today often speak about interest towards the Sofia office market and increased number of the investors, mainly large international companies looking to outsource their business. In general the Sofia office market goes through lasting period of recovery and faces a positive trend ahead. The share of the vacant office premises in Sofia has fallen with nearly 30 % in the last quarter of 2013 to 26 % for the last quarter of 2014. That is so due to the strong interest towards the office premises of class A and the expansion of the international companies which have decided to outsource their business in Sofia.
The rental levels of the Sofia offices vary between 10.5 and 13.5 Euro/sq.m. and the number of available office premises is dropping down. The investments in office buildings for 2014 have increased and many office projects that were postponed are now being restarted. Bulgaria and its capital Sofia is now only provoking the interest of the companies that wish to start a business in the area but are also managing to keep that interest, which is expected to bring many new investments.
Last month it became clear that Germany keeps its cautious position over the Schengen Bid of Bulgaria and Romania. The German Chancellor Angela Merkel and the president of Romania met in Berlin to discuss the accession of Romania into the Schengen zone. Mekrel said that Romania is making progress towards entering the Schengen Zone, yet there is still no clearance when the accession in Schengen will happen.
Currently both Romania and Bulgaria are on hold as far as Schengen zone is concerned. Both countries are part of the European Union since 2007. The main reasons for postponing the accession include corruption, lack of political willingness, organized crime, lack of transparency on the different policies.
According to the Bulgarian Foreign Minister Bulgaria needs to be given a political signal, as well as a little confidence that the country is on the right path of Schengen accession. Minister Daniel Mitov further said that coordination is required between Bulgaria, Romania and Greece for all European Union regional projects. The Bulgarian Foreign Minister believes that Bulgaria will join the Schengen Area as that is the base for fighting against the threats and the terrorism. The politician said once again that Bulgaria has already implemented all technical measures that are needed for the Schengen membership and has done almost no mistakes as an external border of the European Union.
The real estate agents have recently stated that the rental levels of the Sofia Offices are among the lowest in the European Union. At the same time, the number of the available luxurious offices is strongly reduced. The main demand for offices of the highest class A in Sofia comes from the outsourcing companies. That is so as almost all prime office buildings in Sofia are almost 100 % occupied.
Since the beginning of 2015 there is almost no offices available in business buildings of class A, placed in good locations. The international companies are willing to relocate to Sofia city to make business thanks to many reasons. Among these reasons are the low costs for offices and the highly-qualified professionals that can work in the IT and in the outsourcing sphere.
In the entire European Union Bulgaria seems to be the most affordable office destination. That is so as the available offices of class A in Sofia could be rented between 13-15 Euro/sq.m. In case the demand for such offices increases, that will lead to increase in the rental levels, which however will not be significant. Currently, the number of the available high-quality office premises in Sofia is not sufficient for all the international companies that are willing to relocate their business to Bulgaria.
In a meeting with journalists, the Bulgarian Minister of Foreign Affairs Daniel Mitov said that Bulgaria and Romania have agreed to coordinate their positions as far as an accession in the Schengen area is concerned. By having unified position, the two countries are expected to be accepted more seriously and their achievements in meeting the technical criteria are expected to be accepted.
Several weeks ago Minister Mitov met with his Romanian counterpart Bogdan Aurescu, during a meeting between the presidents of Romania and Bulgaria. The politicians discussed the fact that the two countries are already acting as member states of the Schengen zone. Based on that Romania and Bulgaria will insist on clarification over the accession of the two countries in the border-free area of Schengen. Both countries do meet all the technical requirements, they have modern equipment and good control on the borders.
The number of the completed Sofia Offices for year 2014 has significantly decreased compared to the year before that. The share of the vacant office premises has fallen to 15 %, according to a report issued by MBL CBRE. In 2014 only 36 000 sq.m of office premises in Sofia have received permissions for usage. This is almost half the number of the completed office sq.m for 2013.
The decline was a result from the several years of crisis, when the demand for offices for rent has seriously reduced and the number of investments in the segment has been low. In the past two years however, there is a steady growth in demand for prime offices in Sofia. That is so, as many companies are now either expanding or entering the Sofia office market. These companies come mainly from the IT industry and the outsourcing sector.
According to the analysis of MBL CBRE, the office market in Sofia resulted in 88 000 sq.m of rented new office premises. The share of the vacant offices in 2014 has dropped with 33 000 sq.m and now they are approximately 250 000 sq.m. In other words, at the end of 2014, the available offices of class A and B in the capital Sofia were 15.4%.
Currently the most sought after are the business buildings in Sofia that come with open floor plan, high class equipment, quality construction and good location outside the central city areas. The driving force of the office market continues to be the large companies from the IT and the outsourcing sector. The rental levels of the Sofia offices from class A vary from 10.5 to 13.5 Euro per sq.m.
The Deputy Prime Minister Meglena Kuneva took part in the General Affairs Council in Brussels in the middle of February. During the meeting she insisted that the usage of the Schengen accession in order to pressure Bulgaria into fulfilling the EU obligations it has in the spheres of home affairs and justice is not productive.
Meglena Kuneva stated that the European Union border countries, which are located near turbulent regions should not be deprived from the security measures offered by the Schengen Area. The Deputy Prime Minister informed the participants in the General Affairs Council in Brussels that Bulgaria is implementing the EU commitments it made, adopting the judicial reform strategy, preparing the administrative reform plan at the Interior Ministry and also drafting the anti-corruption plan.
According to Meglena Kuneva, the accession of Bulgaria to the Schengen Area would be very beneficial to the overall security of the EU. The Deputy Prime Minister stated that the country has met the criteria of Schengen and is supposed to take advantage of the benefits that the membership in Schengen provides in terms of security.
Bulgaria has already taken all measures for strengthening the EU framework in order to combat terrorism including exchange of information with Europol, adopting the EU Directive on airline passenger data, as well as preventing the illegal arms traffic, etc.
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