Category: Offices for rent

In July one of the largest real estate companies operating in Bulgaria – Forton has stated that Sofia is to expect 130 million Euro investments in business properties by the end of the year. The statistics of the company includes sales of offices in Sofia, but also commercial properties and industrial properties, hotels and plots of development land. According to the Executive Director of the company, the office market in Sofia is in a good place.

Forton company expects continuing and solid recovery of the office market in Sofia. The company had its strongest 6 months of office rental since 2009. Some of the largest office premises in Sofia that have been rented in the first half of 2014 include the rental contract of HP company with “Kambanite Business Center”, the expansion of the VM Ware company on “Tsarigradsko Schousse” Blvd. and the rental of BM Global Delivery Center at Sofia Airport Center, etc. At the same time, the completion of new office buildings in Sofia at the moment is at its lowest level. The available office premises in Sofia are 28.5 %, while the number of the available offices in Sofia in the top 10 office buildings is only 6.6 %. Bulgaria and especially Sofia city are on focus by the large companies from Western Europe and from the United States. That tendency will keep the office market busy in the future months and years. The rental levels of the office premises in Sofia of class A are around 12 Euro/sq.m. The companies are looking for qualified employees and are thus helping the local economy.

A recent analysis issued by the real estate companies in Sofia shows that the local and international companies making business in the Bulgarian capital are on demand for high-quality offices. There is a tendency for these companies to grow and that is why they are searching for new, more spacious offices premises that will allow them to hire more professionals and expand their services. This is especially valid for the IT companies and the call centers.

Currently, several new IT companies are entering the Bulgarian market and are looking for office premises in Sofia. These companies are now in search of suitable office premises and well-educated and certified employees. The IT companies that are willing to outsource their business activities in Bulgaria are coming from Western European countries, as well as from countries like Ukraine, for example. Bulgaria is in competition with the other Balkan countries such as Serbia and Romania for drawing the attention of the investors and is by far the winning the contest.

The rentals of Sofia offices have gone up in the last months. The real estate agents confirm that there is a strong interest towards luxurious offices, which are on demand by the outsourcing and the IT companies. The rental prices of offices in Sofia have gone up with 8 % on the average for the first 6 months of 2014, in comparison with the same period last year. Currently, the rental levels are between 10.5 and 12 Euro per sq.m. The rental prices depend on the location, as well as on the additional services offered.

The price increase is due on the offered high-class business buildings in Sofia. At the same time, the office market in Sofia is characterized by high demand for luxurious offices. The outsourcing and the IT companies however, state that only 10 % of the currently available offices in Sofia are of the requested high class AA offices. The available business buildings are only 18 %, while a year earlier they were around 25 %. The real estate agents predict shortage of offices from class A and class B in Sofia. The companies in search of new offices in Sofia are looking for offices up to 150 sq.m. There is no serious demand for Sofia office premises above 200 sq.m. Until the end of 2014 in Sofia will be constructed approximately 800 sq.m. of office premises, which will be placed along Bulgaria Blvd. and Tsarigradsko Schousse Blvd.

The rental levels of the Sofia offices have gone up with an average of 8 % in the first six months of 2014, compared to the same period last year. Currently, the rental levels of the luxurious offices in Sofia are in the price range of 12 Euros/sq.m per month. The actual value for each rent of office premise in Sofia depends on the exact location and the additional services that are included in the asking price. The main reason behind the increase in the rental levels of Sofia offices lies in the lack of many high-end office premises, as such office buildings have not been constructed in Sofia in the last few years. At the same time, there is an interest in the number of the available office premises of class A, which are on demand by IT and outsourcing companies.

In Sofia city are not available around twenty office buildings of class A, with only 10 % free office premises available there. The companies looking to relocate their business to Sofia are in search of normal-sized office premises between 100 – 1500 sq.m. Currently there is no interest in office premises in Sofia above 2000 sq.m. Until the end of this year will be completed around 80 000 sq.m of office premises, which will be placed along Bulgaria Blvd. and Tsarigradsko Schousse Blvd.

Real estate experts predict a shortage of office space in the capital city of Bulgaria, Sofia. The number of the available space is limited and the construction of new business centers in Sofia is not to the best levels. It seems that the international companies that are working in the sphere of business services and information technologies in Sofia will soon face a shortage of office space that corresponds to their requirements. The number of the available office premises in the top 10 office buildings in Sofia which have been preferred by the tenants have dropped to 7.5%.

The area of the office buildings under construction at the end of March 2013 reached 236 000 sq.m, while an year later in March 2014 the Sofia office buildings in construction had only 143 000 sq.m. The real estate agents expect only 105 000 sq.m of brand new office premises to reach the market in 2014 and 2015, in case the office buildings are completed within the deadlines stated. As expected, the companies are still looking for office premises of class A, located close to Bulgaria Blvd. and Tsarigradsko Schousse Blvd.

In the first quarter of 2014 were put into operation 30 000 sq.m of office premises in Sofia. Since 20 000 sq.m were already rented through preliminary rental contracts that were signed during the construction of the office buildings. This means that only 10 000 sq.m of office premises were actually available for rent by the time they were officially released. The companies that were most active on the office market in the first eight months of 2014 were coming from the IT and the outsource spheres. Sofia city remains the most sought after spots in Europe for outsourcing of business activities in these spheres.

The most active companies on the Bulgarian office market are the international companies from the IT sphere and the pharmaceutical industry. These companies have not been bit from the world financial crises and are expanding. The specialists working in the Pharmaceutical sphere are looking for Sofia office premises with natural light, good ventilation system, modern air-conditioning system, low level of noise, large parking zone. These are the factors that make the experts working in the outsourced pharmaceutical companies to be more effective in their everyday activities.

The managers and employees in the large pharmaceutical companies that have been most active on the Sofia office market are also looking for business centers with good city location, immediate access to most means of the public transport and access to a sports hall nearby. The people working in these companies are also looking for office centers in Sofia with good proximity to nice restaurants. Many of the employees in these companies that have outsourced their business to Sofia are also looking for a shopping area nearby, with grocery store, a spa center, beauty salon and even a children’s playground area.

The market of business properties and offices in Sofia is at a good place right now. In the year of 20133 Bulgaria has attracted 23 million Euros investments in the sector of the office premises. At the same time Sofia office premises provide 8.25 % return on the investment. While the construction of offices has still not reached the levels reached before the crises from 2008, the number of the constructed office buildings in the period 2008 – 2014 is significant. At the end of 2013, Sofia city was in the position to offer to the investors 1.7 sq.m of available office space, which however is far behind the office market growth in other European capitals like Budapest, Warsaw and Prague.

The issue that some international companies have with the office buildings in Sofia concern the fact that not all office buildings correspond to the Western European requirements for standard. According to the Austrian newspaper “Der Standard”, the Bulgarian office market is lacking enough office premises of a high standard that correspond to the best practices and requirements of the international companies. Currently, the office rental levels in Sofia city are among 12 – 14 Euro/sq.m, which is a drop in the office rental levels compared to year 2007 when they have reached 20 Euros/sq.m. The good news here to be mentioned is that the construction companies are now looking for projects of highest quality, where the available office premises are corresponding to the needs of the outsourcing companies.

Sofia office market is in real need of new office projects, since the number of the available prime office premises have seriously dropped. According to the real estate experts, the number of the new office projects that are in process of construction during the previous and this year is larger than the number of the completed projects. This makes the realtors optimistic about the future ahead of the office market in Sofia. According to their data, there will be a 15 % increase in the number of the rented offices in Sofia city by the end of 2014.

The construction companies that invest in office premises rely on the outsourcing and the IT sector, since the companies in these spheres enjoy a stable growth trend. The locations that are among the most sought after include the area among “Tsar Boris” Blvd., “Tsarigradsko Schousse” and the ring road. There are to be found a few available plots where new office projects can be constructed. The construction companies are now looking for office projects with special design directed towards energy efficiency, better and healthier work environment, plus useful facilities, technical maintenance and support, plus fast and easy connection to all parts of the Bulgarian capital.

The number of the available offices in Sofia is going down. There are not many business centers that are under contruction and not many that are planned. In the beginning of the summer in Sofia city were available approximately 290 000 sq.m. of office premises. This is the lowest number of free office zones for rent in the past few years. It should be mentioned that the international companies that want to outsource their business to Sofia city are now looking not only for luxurious and modern offices in Sofia, but also for more spacious office premises with area among 1000 and 1500 sq.m.

In process of construction are approximately 115 000 sq.m. Many office buildings in Sofia have been started but their construction has been put of for several years due to the financial situation during the global crises. These office projects in Sofia are still lacking funding and there are no plans for them to be started soon. Yet, the international companies and many local companies still need to relocate and are in search of modern offices of class A in Sofia. The new offices of class A in Sofia that provoke the interest of the companies that want to outsource their business to Sofia or to relocate include Infinity Tower next to Bulgaria Mall, as well as the new office centers along “Tsarigradsko Schousse” Blvd.