Category: Offices for rent

According to the expectations of all real estate agents in Bulgaria, as well as those from the Royal Institution of Chartered Surveyors, the renal levels of the Sofia offices are to go up during the next year. The increase will cover the areas of office, trade and industrial premises for all countries in Central and Eastern Europe, however in Bulgaria there will be a string interest mainly in the office premises. According to the prognoses a lot of companies from the outsourcing sphere of business will head towards Sofia city looking for good offices and those who are already on the market will search for larger and even more modern offices than the ones they are renting now.

The real estate agents working in the office sector in Sofia confirm an increased interest towards the high-end offices of the so called class A. The outsourcing companies, as well as the local companies which are expanding are in search of modern office premises in Sofia with good access from all points of the city, proximity to the public transport system, including the metro stations and easy reach to nice dining zones for more convenience of the employees. According to the Royal Institution of Chartered Surveyors, the investment market in Sofia is stable and there is interest shown by foreign investors.

The interest shown towards the Sofia offices with strategic location is quite serious. Local freelancers, small companies, big international companies that want to outsource their business to Sofia are all looking for nice offices in Sofia. These offices in Sofia need to have strategic location, so that they can attract the interest of the potential clients. All these groups of companies looking for offices in Sofia are interested in long-term rental and insist on having good city location.

The rental levels of luxurious offices in Sofia have gone up with 8 % in the past 12 months. Since the number of good offices in Sofia is decreasing, there is a new tendency that the real estate agents are pointing out. Some of the buildings that were panned to be malls and trading zines are planned to be turned into offices of the highest class. The brokers say that this is a wise step and that these offices will correspond to the needs and desires of the outsourcing companies, as well as the new local companies.

Sofia is the destination with the more serious annual growth in the rental of luxurious office premises on the main streets and best districts of the city. During the first six months of the year there was an almost 30 % increase in the rental levels of the capital when luxurious offices are concerned. The other Central and Eastern European capitals that provoked the interest of the outsourcing companies include Riga, Belgrade and Moscow.

The companies which are interested in the rental of luxurious offices in Sofia are outsourcing companies which work in the sphere of pharmacy, IT services and consultancy. All these companies are looking for comfortable and modern offices in Sofia with fast access and coverage from the public transport. The office premises in Sofia that the companies are looking for need to be large in terms of space, modern in terms of interior, as well as well-organized, with a nice dining area and a parking around. The outsourcing companies who are looking for luxurious offices in Sofia are eager to pay up to 13 Euro/sq.m in order to get the office they need and deserve.

The outsourcing companies which are renting offices in Sofia come from several main sectors, namely IT and telecommunications, production, financial and special services. All these outsourcing companies plan expanding of their business in Sofia and are often looking for larger offices in the capital. So, what are the outsourcing companies searching for in terms of offices? According to the real estate agents all companies that make plans to open businesses in Sofia are looking towards modern office premises with good location, allowing for easy access. The outsourcing companies are also looking for brighter office premises in Sofia with high quality ventilation and air-conditioning system.

The outsourcing companies which are searching for new offices in Sofia require high quality of the services, systems and completion works. They are also insisting on the recreation and dining zones, as well as on the professional property management of the offices in Sofia they are renting. Currently, the rental prices vary between 10.5 and 13 Euros/sq.m depending on the location and on the specific needs and requirements of the outsourcing companies that are moving to Sofia city.

The engine that drives the entire office market in Sofia is the outsourcing market. Sofia is the main outsourcing destination in Bulgaria, followed by the cities of Plovdiv, Varna and Bourgas. For more than 10 years already Sofia is a popular destination for outsourcing and many large and successful companies have already opened offices here. According to information offered by the Ministry of Economics, more than 20 000 people in Bulgaria are already working in the outsourcing business. Bulgaria keeps the second place in Europe and the fifth in the world as an appealing outsourcing destination.

The main factors that make Sofia office market so appealing for the outsourcing companies are the low maintenance costs, the affordable rental prices of the Sofia offices, the high-quality office premises in Sofia, the fast and reliable internet connection, the excellent knowledge and training of the specialists and their good knowledge of foreign languages. For example, a great part of the call centers in Sofia, Bulgaria operate in more than 25 languages. The companies which are building offices in Sofia and the realtors try to answer the needs of the modern outsourcing companies.

The companies that are outsourcing their business to Bulgaria are looking for Sofia offices of class A, which are of the highest possible class and are placed in areas with excellent location. The outsourcing companies that are looking for offices in Sofia cover 65 % of all rented premises in the first half of 2014. Some of the outsourcing companies that have already established their offices in Sofia are HP and IBM, VM Ware, etc. The average rented offices in Sofia are around 1608 sq.m in size.

The companies that are relocating to Sofia city are looking for comfortable office premises, which have great location with excellent infrastructure. These companies are looking for high quality air conditioning, ventilation, architectural vision. These companies are looking for image. That is why the available office premises in Sofia at that moment, located in the top 10 office buildings in Sofia are less than 7 %. The companies are looking for parking zone, good access to public transport and facilities nearby. The rental that these companies are paying varies between 10 and 13 Euros/sq.m, where the rental price of the offices of class A depends on the location and the available facilities. The offices of class B have lower rental levels between 6 and 8 Euros per sq.m. The prognoses of the real estate agents are for increased number of international companies that will be looking to outsource their business to Sofia city.

The high class office projects in Sofia are currently 21 with total office premise to be available being 361 350 sq.m. In the first half of the year, the available office premises of the highest class AA increased with 2 % and their total area reached 1 723 500 sq.m The completed office projects added 37 000 sq.m more to the already available office premises in Sofia. Great part of these new office area was added by the Infinity Tower on Bulgaria Blvd. which added 22 000 sq.m.

The main characteristics of such office projects include high quality of implementation and excellent technical specifications, great location with easy access to all parts of the city, public transport access, and effective distribution of the office area. In the first months of the year up to now no new projects have started. During that period the existing office premises have been rented to companies. The total area of the office projects that are currently being in construction amounts to 150 000 sq.m. The rented offices in Sofia of class A and B from the beginning of the year until now amount to 46 000 sq.m, which is 14 % more than the second half of 2013. It is expected the rented office premises to go above the levels in 2013. More than 70 % of the rented offices in 2014 were taken by shared services centers and outsourcing companies. The rent of offices in Sofia varies from 10.5 to 13 Euro/sq.m.

The office market in Sofia is characterized with limited supply of office premises and increased levels of rented office premises in the second quarter of 2014. The driving force behind the demand of new offices in Sofia are the new international companies that are planning to outsource their business in Bulgaria. These companies are mainly from the IT sector and they are yet to search for new, more spacious and comfortable office premises in Sofia.

In the middle of 2014 the available office premises in Sofia were around 1.68 million sq.m., since no new office buildings of class A and B were completed until July 2014. The office projects in Sofia that are in the pipeline are being built according to their plans. Approximately 21 300 sq.m of office centers class A and B are expected to be completed by the end of the year. Almost half of the office premises however are already rented out.

The Sofia office premises that have been rented in the period April – July 2014 were 37 500 sq.m, which is more than half of the office premise area that has been rented out for the same period in 2013 and 27 % more than the rented Sofia offices in the period January – March 2014. Besides the companies from the IT sector, the other industries that show interest in renting Sofia offices include companies from the financial and the energy sector. The available percentage of office premises in best new business centers in Sofia of the highest class AA is only 7 %. These projects are positioned along Bulgaria Blvd. and near Sofia Airport.

The lack of many available Sofia offices of the highest class AA results in a price increase as far as the rental levels are concerned. Some of the landlords in the business centers with offices of class AA have increased their prices with approximately 8 % per sq.m. and now they are offered at 12.5 – 13 Euro/sq.m. The decreased number of available office premises in Sofia of this high class has made some companies look towards other cities in Bulgaria that can offer them this high level of office premise such as the cities of Plovdiv, Varna, Bourgas. In these cities the outsourcing companies can also find well-educated and prepared professionals to hire.

The office segment in Sofia is the most active one on the business properties market in general. The main reason for that is the activity on the outsourcing sector. The companies from the outsourcing sector have rented more than 25 % of all available offices in Sofia in 2013. Since two of the large international operators are with new owners now, the real estate agents predict re-structuring and optimization of the available office premises they had taken.

In the first half of 2014, the offered office premises of high class in Sofia had 2 % increase, with the total size of office premises provided being more than 1.7 million sq.m. The new projects that have been completed are 37 000 sq.m. The available office premises in Sofia at the moment are about 24 %. The rental levels are stable.

The activity in the outsourcing industry sector in Sofia and the interest shown in the Sofia office centers led to an increase in the rental levels. This is especially valid for the rental levels of offices in Sofia, based in the new business centers and large shopping malls. The rental levels of Sofia offices have gone up with approximately 8 % and the market is characterized by a trend of stability and growth dur to the outsourcing companies. This increase in the rental levels of Sofia offices is the first to be registered since 2011.

Due to the sustained interest shown by the IT and the outsourcing companies, the percentage of the available office premises of class A in Sofia has dropped down. This tendency gave confidence to the development companies to start new projects, as well as to the landlords to ask for office rent up to 13 Euro/sq.m. Most of the companies are looking for Sofia office premises in the price range between 10.5 and 12 Euro/sq.m, where the rental price depends on the location and on the requirements of the tenants. The number of the rented offices in Sofia is going up and during the first six months of the year they were around 60 000 sq.m. Mainly, these office premises in Sofia have been rented by companies that are already present on the Sofia market, but are looking for more spacious offices or for better location.