Category: Serviced Offices

The demand for spacious offices of class A in Sofia city is so serious that currently are being signed rental contracts for office premises located in business centers that are still in construction and are expected to be completed in 2017. The pre-lease of office premises in Sofia city is something normal today and if 70 000 sq.m of offices are to be ready this year, the rest will be completed in the first half of the year ahead.

The average size of the office premises that were rented in 2015 was around 1200 sq.m. and the tendency is for the companies to look for even larger offices. This indicator confirms the positive tendency for renting bigger offices in Sofia thanks to the serious business growth of the companies in the outsourcing and the IT sphere.

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.

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.

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.

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).

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.

The prognosis of the real estate brokers working in the sphere of office premises in Sofia are for a serious interest towards the already finished and operating office and retail properties. The priorities of the investors on Sofia office market are expected to shift their priorities and get offices that can start generating revenue immediately. The main demand is expected towards offices with central location in Sofia that come with long-term lease contracts. Due to the insufficient supply of office premises in Sofia, it is believed and expected for the office rental and purchase prices to rise. However, that will happen with a slow pace.

Year 2016 started with an enhanced search of Sofia office premises that are still in construction as well. The expectations are for the office rental levels to go up as the completed new offices for the entire year will be only 70 000 sq.m. Since more than 130 000 sq.m of office premises have been rented in the last two years in Sofia, the market is expected to face insufficient supply of quality properties suitable for the industry and business needs. The most significant new projects that will be released on the office market in Sofia in 2016 are only three – Blu Offices on “Brussels” Blvd., SPS Tower “Bulgaria” Blvd., and “Kambanite Green Offices” near the Ring route. The serious search of business areas will remain stable in 2016 and will be driven mainly by the expansion of the IT and the outsourcing sector.

In recent years, Bulgaria has become more recognizable outsourcing destination, however the insufficient number of offices in Sofia that are meeting the company’s requirements has driven many of them to other major regional cities of the country.

Great deal of the companies that are looking for office premises in Sofia are coming from the IT, outsourcing and financial sphere. These companies are in search of large offices above 1000 sq.m, situated in the big business centers of Sofia. The real estate experts comment however, that there is a serious demand now for smaller office premises with size between 200 and 400 sq.m. Such offices can be found in many areas of Sofia and are usually searched for by startup companies.

The tendency concerning the office premises in Sofia for the beginning of 2016 is for the large companies to relocate to larger office premises of more than 1000 – 1500 sq.m., thus disposing many smaller offices mainly positioned in Sofia city center. The rental levels of the offices in Sofia during the first quarter of 2016 remain unchanged – varying between 10-12 Euros / sq.m for the offices of class A and 12-14 Euros / sq.m for the very luxurious offices in the new office buildings. It is believed that the office market will remain active in the next 12 – 18 months.

A new tendency in the office market is now to be traced in Sofia city. Along with the serious interest towards the offices larger than 1000 sq.m of usable space, many startup companies from all over Europe are now looking for smaller office premises in Sofia between 200 and 400 sq.m of area. The local companies that are further developing their services and production are also looking for new offices. Most of the companies on demand of office premises are coming from the financial and the IT sphere. There are also companies trading on the stock markets or working in the sphere of the high technologies and services.

Since the beginning of 2015 there is a greater supply of office premises thanks to the office projects that have been restarted in 2014. The new office projects in Sofia are offering larger office premises above 1000 and 1500 sq.m. The subsidiary companies that are looking to relocate under one roof have interest in these large office premises and they are to release the smaller offices they used to rent. It is expected that those smaller office will answer the needs of the startup companies. The rental levels remain in the levels of 10-12 Euro/sq.m. per month in the Sofia office premises of class A. However, in the most luxurious offices the rental prices go up to 13-14 Euro/sq.m. per month.

The outsourcing services and the IT sector have the capacity and the will to open another 45 000 work positions by 2020. Bulgaria and especially its capital Sofia, is a leading outsourcing destination in Europe and the IT companies are in search of talented specialists in the country. The interest shown towards Bulgaria is not new, since Bulgaria won the European Outsourcing Awards contest for 2015. The country has been nominated as one of the three best places for outsourcing of services and production in the world, along with South Africa and Latvia. Bulgaria has been chosen as the best outsourcing destination thanks to the professionals working here and their skills, knowledge of foreign languages and low expense rates. The country is part of the European Union, which is another plus as well.

The annual turnover of the outsourcing industry is 1 billion Euro and the expectations are for this figure to double by 2020. In the last decade the income of the IT companies has shown an increase of 600 %. At the end of 2014 more than 33 000 specialists have been working in 180 outsourcing companies in Bulgaria. The solid salary and the flexible working hours are drawing the attention of a growing number of graduates.