The real estate investors are looking for clear requirements concerning the in office buildings in Sofia. At the same time the companies that are looking to outsource their business to the capital of Bulgaria or to relocate their office in Sofia to a bigger one are paying greater attention to the facility management and the technical standards. There is a great interest towards the office projects in Sofia that are certified according to the international standards like BREEAM, LEED, etc.
Currently in the city of Sofia the side that is setting the rules is the one of the tenants. The companies that are looking for office premises in Sofia show interest in high quality office buildings which are energy-efficient built with modern materials and according to the latest technologies. The requirements are becoming more and more and that means better working environment for the employees.
Besides being efficient, the modern offices in Sofia should also have a good structure that allows for the premises to be rented by different companies working in various spheres. The companies that are interested in these offices of class AA in Sofia are mainly companies from the IT and the outsourcing sphere, which are mobile and open to changes. These companies are also interested in the way the office building looks like, in the design and the façade of the building. The organization of the common area is also of great importance.
Several days ago the European Commission stated that Romania and Bulgaria meet the criteria to join the travel free zone of Schengen and that the two countries need political decision in order to get into the passport free zone. It is not up to the executive body of the European Commission to take that decision. The decision about the entry of Romania and Bulgaria into the Schengen zone should be taken by the Council of the European Union.
The countries in the Schengen zone, including the two states that want to become members – Romania and Bulgaria, should react wise to the current crisis with the migrants and should give a unified answer. There should be a mandatory distribution of the refugees among all member states in the European Union. This will allow the Union to keep its Schengen area as it is – free of checks on the border. Until now the Schengen zone has been accepted as one of the success projects of the European Union.
Yet, the situation with the migrants is getting worse. Last Wednesday Denmark has temporarily suspended its rail connection with Germany due to the influx of migrants. The Danish police also clods a motorway set between the two countries after a large group of migrants started walking north of Sweden. All countries in the Schengen zone, including the want to be members Bulgaria and Romania should be careful with the migrant’s situation.
The intensive increase in the outsourcing industry in Bulgaria has led to a great interest in the office premises in Sofia. The main demand is for offices of class A, located close to “Tsarigradsko Schousse” Blvd. and the Sofia Airport, the Business Center Sofia and “Bulgaria” Blvd. The available office premises of class A in Sofia for 2014 have decreased in half compared to the year before that. The serious demand for offices and the lack of many projects for business centers have led to that situation.
The main companies that are active on the market of offices are coming from the outsourcing sphere. Almost all of them expect increase in their income for 2015 and around 60 % plan to increase the number of their staff with 100 to 200 new employees. Approximately 40 % of the companies are planning to change their office and move to a larger one. The main factors for choosing a new office premise in Sofia are the location, the expenses, and the availability of parking area. There is strong interest towards several new office projects in Sofia, namely – Capital Fort, Kambanite Business Center, Sofia Airport Center.
In the end of July the head of the Consular Relations Directorate at Bulgaria's Foreign Ministry Rakovski Lashev said on a press conference that the Bulgarian consulates have improved the readiness of Bulgaria to enter the passport free Schengen zone by meeting all requirements concerning the no visa area. In fact, the consulates in Bulgaria are not only maintaining but also improving the level of readiness of their employees and the equipment they have. Bulgaria has been named ready to join Schengen in 2011 by the European Parliament and the European Union Council.
At the same time, the Bulgarian President stated that Bulgaria wants to be a member of the passport-free travel area of Schengen by 2018 and that he hopes that the country will soon enter the first stage of accession at the Schengen zone – the opening of the air and the sea borders. Romania and Bulgaria are members of the European Union since 2007 and had hopes to join the Schengen area in March 2011. This however did not happen as some members of Schengen have expressed reluctance and concerns over the security and corruption in the two countries.
The recovery of the Sofia office market in 2014 and in the first half of 2015 is easy to see. The percentage of the rented office premises in Sofia in 2014 has gone up with 42% compared to the year before that. This means that in 2014 the number of the rented offices has been around 154 000 sq.m. At the same time the percentage of the available offices in Sofia city has dropped to 26% in 2014. The main interest is towards the Sofia offices of class A, which are in the focus of attention of the outsourcing and IT companies, which are looking to relocate their business to Bulgaria. The average rental levels are around 10 and 13 Euro/sq.m. with a tendency to go up.
At the same time the office market in Sofia is coming with new projects for business centers including Capital Fort Business Center, the office center next to Bulgaria Mall, Trade Center Europe, Sofia Airport Center, etc. The interest of the outsourcing companies is provoked by the offices of class A, the young professionals in the country with knowledge of foreign languages, etc.
In the middle of June the Bulgarian President stated that Bulgaria is open towards further integration in the European Union and that the country is willing to contribute to the collective defense of NATO. The president stated that on a joint press conference with Anibal Cavaco Silva, his Portuguese counterpart. These are among the ambitions plans of Bulgaria to integrate in the European Union by 2018, as well as to join the Schengen zone, accept the unified banking supervisory system and the exchange rate mechanism between its national currency – the Bulgarian lev and the Euro.
During the conference, the President expressed his belief that soon the efforts of Bulgaria will be noticed and will allow the country to move to the first stage of its accepting in the travel free Schengen area. The first stage of Schengen entry includes opening of the air and sea borders. The President of Bulgaria further expressed his gratitude for the support that his country received by Portugal, concerning the entry of Bulgaria into NATO, EU and now the attempts to enter the Schengen visa-free passport-free zone. The president of Portugal stated that Bulgaria has already made serious efforts to fulfill all requirements to join the Schengen zone.
Several major projects for business centers are in the focus of attention in Sofia city and their development is strictly followed by the real estate agents. Which are these projects and what is to be expected?
Capital Fort – the business center is almost ready, expecting to get certificate for habitation soon. It is believed to be the tallest building in Sofia with 126 m of height and 42 000 sq.m of office premises. Capital Fort is among the significant office buildings in the capital, with elegant architecture and strategic location on Tsarigradsko Schousse Blvd. The new business center in Sofia will have offices of class A, trade area, underground parking zone with 670 parking lots, etc. The building will be certificated according to the criteria for green buildings BREEAM.
City Tower – located in the heart of the capital on Macedonia Square, this business center will offer 55 sq.m of office premises and trade areas, as well as six underground parking levels in Sofia. The business center will be constructed using the top down method. And is expected to be ready in a period of two years.
San Stefano Plaza – the construction of the multifunctional complex goes fast. The new project will feature 56 000 sq.m of area including offices and residential units, shops, sports center and huge underground parking zone. In the eastern part of San Stefano Plaza will be located a small office building.
Sofia Airport Center – the start of the second phase of the complex will be by the end of 2015. The new office building will offer 25 000 sq.m of area and is expected to be certified according to the LEED Platinum standards.
Trade Center Europe Building 1 – that is the last of 15 buildings located near the airport. It has 156 800 sq.m. of area including offices and storage zones, shops, two-level restaurant and a multifunctional sports hall. The office building will be certified by the ecological system BREEAM.
Millennium Center – located near the National Palace of Culture and expected to be ready in two years. It will feature a large trade center on five levels, a five-star hotel, SPA center, restaurants, and level a helicopter platform. There will be an office building as well with 24 floors and a third building occupied by luxury apartments.
Expo 2000 Office Park – new office building with LEED Platinum and DGNB Gold certificates. It features one 8-storey building and one 3-story building and many facilities.
Another step was taken by Bulgaria in her attempt to be accepted as a member of the Schengen zone. Several weeks ago, the government of Bulgaria has approved the formation of a special unit aiming to investigate the high-level corruption in the country. This comes as an answer to Brussels, which has criticized Bulgaria repeatedly through the years for failing to put in prison corrupt officials. Both Romania and Bulgaria are now hoping to make a progress in the areas that keep them from joining the travel free Schengen zone.
Until now the corruption has undermined the trust of the Bulgarians in all the public institutions and has kept low the number of the foreign investments made. According to the Deputy Prime Minister Meglena Kuneva from now on with the new corruption investigation unit being made, the approach to all residents – ordinary people and high-level officials, will be the same. The anti-corruption unit will start operating in 2016 along with the National Strategy for prevention and for combating of corruption which will be in progress in the period 2015 – 2020. The targets of the investigation of that strategy will be the prime minister and the president, various prosecutors and lawmakers, directors of large institutions, hospitals, etc. This will be another step towards Bulgaria’s accession in the Schengen zone.
Sofia is a busy city with cosmopolitan atmosphere and as such it tries to offer modern office buildings. The business centers in Sofia however are almost fully rented with not many projects for office buildings waiting in the pipeline. Those that have been recently released such as Infinity Towers and Capital Fort offer a great solution in terms of quality, energy efficiency, aesthetics, fast proximity to the center of the city and the rest of the districts. Among the other factors that are of great importance for the optimal functioning of each modern office building are the light, acoustic and spacious factors, the excellent infrastructure of the area, the availability of parking lots, the low exploitation expenses, etc.
The good news is that the market of office premises is in stable progress with more than 40% increase in the office premises being rented out in 2014 compared to the year before that. The main engine that drives that tendency is the interest towards offices from class A, which are on demand by the international companies in the outsourcing and the IT sector. Currently in Sofia are under construction 124 000 sq.m of offices with many projects being restarted.
Bulgaria and Switzerland has been taken steps into strengthening their cooperation in the spheres of security and economy. That became clear after a meeting in June between the Bulgarian Prime Minister Boyko Borisov and the President of Switzerland and Head of the Department of Justice and Police Simonetta Sommaruga during a delegation visit in Switzerland.
The issues that have been discussed during the meeting cover the migration policy and the refugee crisis and naturally the Bulgaria’s accession in the travel free Schengen zone. The Prime Minister remarked that Bulgaria has been enjoying Switzerland’s support for Bulgaria’s Schengen accession for a long time. He stated that Bulgaria is protecting the external border of the European Union very well even despite the issues with the refuges, the loss of border fence and the refugee camps near the border.
His Swiss colleague Ms Sommaruga expressed her positive attitude towards the border protection taken and the fight of the country against smuggling. The two politicians agreed to set bilateral relations in different aspects of mutual interest.
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