The main tendencies concerning the office market in Sofia in the last quarter of 2015 included an active search for office premises and a slight increase in the rental levels. The increased interest for company expansion and rental of offices mainly by the IT and outsourcing companies led to many new office projects.
According to data offered by Forton, in 2015 were completed more than 105 000 sq.m of offices, most of which however were rented before the office buildings got permission for usage. Due to that fact, the quality provision of offices remains insufficient and cannot answer the serious demand for office premises in Sofia. The average size of the rented offices in 2015 was around 1200 sq.m.
Currently 200 000 sq.m of office premises are being in process of construction in Sofia yet only 70 000 sq.m are expected to be completed in 2016. The active demand for offices and the limited supply of suitable office premises led to a slight increase in the rental levels of the offices of class A, which now start at around 12.5 Euros.
Following a meeting with the Bulgarian Prime Minister, the Hungarian Prime Minister Viktor Orban stated that if Europe wants to be correct with Bulgaria, it has to offer the country a Schengen membership. He further stated that it is not right that the results of Bulgaria concerning the refugee crises are not acknowledged. After all, Bulgaria is a non-Schengen country that has shown the best results.
The Hungarian Prime Minister Viktor Orban said that all countries that are along the routes of the migrants are under stress. He also said that Bulgarian authorities are handling that stress in the best possible manner and that is why the country should be offered a Schengen membership will full rights. He also stated however that the country should carefully consider whether or not she wants to join the Schengen agreement zone, which in his words is dying.
The total square meters of Sofia offices that are expected to be completed in 2016 are not many, according to data released by the real estate agencies. However, the experts say that many more projects are in the pipeline to be completed by 2017. The office market in Sofia is mainly driven by the companies working in the outsourcing sphere, in the sphere of Informative Technologies and Pharmaceutical Business. Bulgaria and especially its capital Sofia are already well-known to the companies worldwide, as the country has excellent reputation for qualified professionals, normal wages, and modern offices of highest quality.
In year 2016 Bulgaria took the first place among the countries in the European Union concerning business deals signed. Based on that, as well as on the number of deals and the requests made, it is believed that the focus of the investors will broaden and will include Bulgaria. In 2015 only one large office project was released on the market – Capital Fort on “Tsarigradsko Schousse” Blvd. the rental levels of the high quality offices in 2015 were among 10.5 and 12.5 Euro/sq.m.
In the current year of 2016 the expected number of office premises to be released is around 63,000 sq.m, yet the prognosis for the completed office premises in the year to follow is for 170 000 sq.m. The office projects in Sofia to be released soon are yet to change the office market in the capital of Bulgaria. The rental levels of the offices are expected to go up and start from 12.5 Euro/sq.m and going up.
During the ditional reception for heads of diplomatic missions accredited in Bulgaria, at the end of January the Bulgarian President Rosen Plevneliev stated that Bulgaria has been a factor if stability in the region during the past year. The event has organized at the National Museum of History, where the President Plevneliev delivered his speech. According to him the year 2015 was difficult, the countries were unstable and the events could not be predicted.
He stated that despite all the challenges, Bulgaria has been acting as a factor of stability in the entire region, playing a responsible role as a pro-European force on the Balkans and further, as a responsible EU and NATO country. The year was also active concerning the Bulgarian foreign policy. And even if the people respect the refugees, they do protect the borders of the country and of the Schengen zone as well. That is why according to the president of the country, Bulgaria has been a source .not of problems but of solutions.
The ambitions of Bulgaria are associated with launching a new wave of European integration projects including euro zone membership and Schengen zone full-rights membership. The Bulgarian president further stated that the European Union is a platform for countries to develop and that Europeans need a good debate on achieving peace and pointed out that Bulgaria is an important factor for that on the Balkans.
He stated that the country’s international prestige is recognized by the fact that the country is taking over the chairmanship of the South-East European Cooperation Process (SEECP) and of the Committee of Ministers of the Council of Europe and that Bulgaria will be hosting the Arraiolos meeting in 2016.
The uplifting in the sphere of construction was a fact in all segments of the market in 2015. The investors started new residential and office projects, as well as major multifunctional projects. The prognosis of the experts is for this tendency to proceed in year 2016 as well. Bulgaria is already a well-established outsourcing destination, which presumes an increase in the search for business premises and offices of class A. The main participants on the office premises market are the outsourcing and the IT companies.
The real estate agents say that in 2016 only 63 000 sq.m of new offices will be completed. Yet, they are also talking about others waiting in the pipeline as in 2017 are expected as many as 170 000 sq.m of office premises. Many of these premises are expected to be pre-released. The large office projects that are expected on the market include The Green Offices Kambanite, Blu Offices, The Building 1 of the Trade Center Europe, Millenium Center and City Tower, Phase 2 of the Sofia Airport Center, Garitage Park, as well as Phase 2 of Sofia One and Phase 4 of Expo 2000.
In the beginning of the year the Bavarian Minister of the Interior for Building and Transport Joachim Herrmann stated during a press conference that in the frames of the Security Priority Area of the EU Strategy for the Danube Region, there is no intention of turning Bulgaria and Macedonia into “waiting room for refugees”.
The Bulgarian Deputy Prime Minister for Coalition Policy and Public Administration and Minister of Interior, Rumyana Bachvarova, took part in this event dedicated to counteracting international terrorism. She remarked that Bulgaria protected its border in line and in accordance with all Schengen standards. She also stated that the country has the technical readiness to join the Schengen Area ever since 2012.
She further said that Bulgarians understands the situation in Europe and that meeting our obligations is more important than insisting on additional rights our citizens. The question with the Schengen membership remains open for the country.
The new phase in the construction sphere is a fact since 2015. Local and international entrepreneurs have already started new projects in sectors with serious demand including the offices, the industrial real estate projects and the residential buildings. As positive signs on the market is the return of large-scale multifunctional projects and this trend is expected to continue in 2016.
Many consultancy companies and real estate agents believe that Bulgaria has established itself as a great outsourcing destination, which implies a growing demand for new business centers and increase in the number of start projects. There are also indications of interest shown in investments that concern the completion of office buildings and shopping centers. That is why there are expectations for signing of significant yet realistic transactions this year.
In the last two years the demand for office space in Sofia was driven mainly by the IT and outsourcing (BPO) sectors. Thanks to that demand, many new office projects entered the planning phase and their construction was started where most of them will come to market in 2017. Among these projects are Kambanite Green Offices, Blu Offices, Trade Center Europe (building 1), City Tower, “Millennium Centre”, Garitage Park, Sofia Airport Center (Phase 2), Expo 2000 (phase 4), Sofia One (phase 2).
At the end of the EU-Turkey summit in Brussels, the Bulgarian Prime Minister Boyko Borisov stated that the politicians in Brussels are acknowledging Bulgaria as setting the standards for the protection of the Schengen border. He further stated that the negotiations were very difficult and time-consuming, but at the end the EU member states and Turkey reached a compromise that is considered the best option for the moment.
Bulgaria has required financial assistance, as the country is making serious efforts in demonstrating how the Schengen border should be protected. The politicians have stated that Bulgaria sets the standards for the protection of the Schengen border, as the Bulgarian Prime Minister remarked. At the same time the authorities in Bulgaria have warned that the country would block the EU-Turkey agreement unless its interests are taken into account.
The Prime Minister of Bulgaria has sent a letter to the European Council President stating that Sofia would block the agreement unless the protection of the Bulgarian borders, as well as those of Greece, was guaranteed. The negotiations with Turkey should cover the land and marine borders of Bulgaria with Turkey. Bulgaria is currently not a member of the Schengen area.
Bulgaria is а well-known destination for outsourcing services already. The country is known for its wide range of advantages that it offers to the local and the international investors. Prior to starting a business in the country, those investors need to decide about the type of business they will need to set up. According to the Bulgarian laws, citizens from abroad have the right to establish a business in the country in the form of sole proprietorship, a representative office, a partnership, a branch.
The team behind SofiaOffices company has been on the market for many years and is quite aware that the businesses in Bulgaria have diverse payroll needs. That is why the company started providing fast and accurate online payroll services to those clients that need them. Bulgaria has strong market potential and attracts the interest of many investors. Just like the rest of the European countries, it has however its own employment legislative subtleties. If wisely observed, these regulations ensure that your outsourced workforce in Bulgaria is nicely managed and paid accordingly. StaySofia has the capacity to provide employment and payroll outsourcing services on time, as well as business support.
In order the work to be done fluently, every business company is in need of administrative and payroll services. This is a boring job (yeah, we know) that brings no profit (but is associated with expenses instead). Yet, someone should do it, so it is always better to leave that task in our hands and focus on what you do best. Among the administrative services that we provide is the preparation of all documents associated with the start of the employment process of every employee, including the registration of the labor contracts in the National Revenue Agency, and all other documents that concern the change in the employment status, the retirement, the cash benefits and the social assistance documents. The maintenance of the employees’ records in perfect condition is also part of the task.
The payroll services that SofiaOffices cover include all important aspects that concern the payment of the employees in Bulgaria. These include the process of the variable monthly payroll information, calculation of the vacation days and sick leaves, changes in the wages, method of remuneration, working positions, calculation of the monthly gross and net wages, social and health insurances, income tax, etc.
Payroll Services in Bulgaria Milestones:
• Minimum wage – 210 EUR
• Employer’s taxes – 30.7%
• VAT – 20%
• PIT – 10%
• Annual paid vacation – at least 20 days
• Payroll currency – BGN, Euro, Dollar
• Overtime – Working overtime is principally not allowed by the Labour Code) with exceptions only under tight premise. The extent of overtime must not exceed 6 h (night work 4 h) per week, 30 h (night work 20 h) per month and 150 h per year. During two consecutive days no more than a total of 3 hours (night work 2) overtime are allowed. The premiums amount to minimum of: – 50% for work on regular working days; -75% for work on days of rest (Sundays); – 100% on statutory holidays.
The Bulgarian capital Sofia is experiencing a serious demand for office premises. In the period 2016 – 2017 will be completed several very tall office buildings. In 2015 was officially opened the tallest office building in the country – Capital Fort. With its 126 meters, the office giant went ahead Hotel Rodina with its 104 meters. Read the text below which will be the five tallest office buildings to be released in Sofia city in the next several months.
1. Capital Fort (126 m) located on Tsrigradsko Schousse Blvd., where are placed the offices of the companies Scale Focus and Apcom, Skrill and Visteon.
2. Itower (107 m) is positioned in the central part of the city near Macedonia Square. The investors come from Italy, Cyprus and Portugal. There are several projects for the architecture of the office skyscraper, however there is no official information about it yet.
3. Infinity Tower (90.5 m) – the office building is located on Bulgaria Blvd. and is adjacent to Bulgaria Mall. It is among the best office projects in 2014, featuring a glass façade and comfortable office premises of different size.
4. Millennium Center (85 m), perfectly located behind the National Palace of Culture, this business center is in the last stage of its completion. Two local banks will occupy more than 7400 sq.m of offices there – CIBank and DZI. The building is expected to be completed and officially open in June 2017.
5. City Tower (74 m) – this is the office center near Stamboliiski Blvd., that is to offer 39 000 sq.m of office premises. The business center is expected to be completed in 2017 and the investor is the Bulgarian representative of a Greek company.
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