The interest towards investment properties and offices in Bulgaria is very strong and there is tendency for even more serious demand in 2015. The interest comes from the large local companies which are expanding, from the foreign companies that are already on the market, as well as from international companies that are outsourcing their business in Sofia and the rest of the large cities in Bulgaria.
The companies which are opening offices in Sofia or are expanding the business they already started in the country show interest in the well-known business zones of the city such as Sofia Business Park and the southern ring road zone, the central city area, as well as the districts of Iztok, Lozenets and Ivan Vazov. These companies are looking for office premises of the highest class, yet they are not many in number. The prognoses are that in the several years to come the building companies will show serious interest in the construction of modern office buildings, in order to provide office supply to the office demand in Sofia.
The President of the European Parliament Mr. Martin Schulz has recently announced, that the admittance of Bulgaria into the borderless Schengen area of the European Union has a legal aspect and depends on the country meeting certain criteria. Martin Schulz spoke on a joint conference with Boyko Borisov, the Prime Minister of Bulgaria, stating that when the member states of the European Union meet certain criteria, they are entitled to various legal rights. According to that the question whether Bulgaria will join the passport free zone of Schengen should be seen from that point of view and is not a political question.
Bulgaria, along with its neighboring country Romania, joined the European Union in 2007. Both countries hoped to become members of the Schengen zone in 2010, however several of the member states of the Schengen agreement opposed due to fear of issues with organized crime and corruption. The President of the European Parliament is to pay a visit to Bulgaria in the spring and talk about the Schengen bid. This will show confidence in the government of the coalition, as well as in all parties that are presented in the National Assembly.
Bulgaria and especially its capital Sofia is among the most preferred locations for outsourcing the business in Europe. The country is also the only country in Europe which is part of the world ranking of the most attractive destinations for outsourcing, according to a survey covering 51 countries and made by the analyst company AT Kearney. Currently Bulgaria occupies ninth place in the prestigious index, climbing eight positions compared to 2011. This means that for a second time in seven years, Sofia office market enters the top ten of the most attractive destinations in the world for the development of the outsourcing sector.
The Chairman of the Bulgarian Outsourcing Association Stefan Bumov stated that this is a great acknowledgment for the efforts made, the maturity reached by the office market in Sofia and for its potential. Currently Central Europe offers a mature industry and a lot of experienced employees. The ranking made by the analyst company AT Kearney was based on 39 indicators in three main categories: business environment, financial attractiveness, availability and skills of human resources. This index is greatly used by the outsourcing companies when making a decision where to open their centers for business processes and IT back-office functions.
Several weeks ago the media in Macedonia paid special attention to the statement made by Meglena Kuneva, the Deputy Prime Minister of Bulgaria as she commented on the chances of the country to be accepted in the border-free Schengen zone. The prognosis is that Romania will soon become a member of the Schengen area, and Bulgaria will most probably be left behind. This is expected based on the coming progress reports of the European Commission on the two countries.
According to Meglena Kuneva, the two countries will most probably be separated in their efforts to enter the passport-free travel zone. Schengen zone is an economic area and most probably Romania will be the first to be accepted there, while Bulgaria will get a second negative report in a row. The Macedonia media stated that there will be restrictions for Bulgaria in the Schengen area and thus – bad news for people with Bulgarian passports.
Many clients of the real estate agencies in Sofia are now looking to hire offices in Sofia for short periods of time that could be one day, a week or several months. In this way the companies are trying to reduce their costs while finding their way and niche on the Sofia market. Very often, the short-term rental of Sofia offices is used by foreign companies which want to make a special campaign or to explore the market on Sofia or to find employees for the time they plan to move and open a large office in Sofia.
The outsourcing companies that are interested in investment in Sofia are in search of modern offices with areas above 2000 sq.m., positioned in specialized buildings with good location. These are companies from the outsourcing industry, IT and software companies. At the same time many local companies with small business are in search of smaller offices but again – placed in prestigious office buildings. Some of the outsourcing companies are looking to hire first-class offices in Sofia and in the main cities of Bulgaria and are willing to wait for the realization of new projects in 2016 and 2017.
The Prime Minister of Bulgaria Boyko Borisov recently said that Bulgaria and Romania have successfully met all technical requirements that were asked for by the Schengen authorities and thus they should join the Schengen area together. In an interview for FOCUS News Agency, the Prime Minister stated that there should be no more delays and new requirements ahead of the two countries which are waiting to become members of the Schengen zone for quite some time now.
According to the Prime Minister of Bulgaria Boyko Borisov, Bulgaria keeps on making efforts for integration of the newest visa information technologies in order to improve the conditions for visa. The consulate representations make efforts for the efficiency of the visa regime and for providing security of the internal borders of the union. The countries that are still showing reservations towards Bulgaria being accepted in the Schengen travel free zone are Germany and France, Belgium and Finland, as well as the Netherlands.
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 Deputy Prime Minister for European Policy Coordination and Institutional Affairs recently stated that the judicial reform, as well as the positive results under the Mechanism for Cooperation and Verification, as well as the Schengen accession should be accepted as benefits for the Bulgarian economy. This was discussed on a meeting which Meglena Kuneva held with Jonathan Allen, the Ambassador of the United Kingdom to Bulgaria.
As a Deputy Prime Minister, Meglena Kuneva marked the priorities of the new government. According to the program, the government has plans for reforms in major sectors. Once these reforms become reality, Bulgaria can expect a positive report from the European Commission based on the Mechanism for Cooperation and Verification, followed by acceptance in the Schengen travel free zone. The Bulgarian Presidency of the Council of the European Union is expected in 2018.
Sofia offices rental levels have all the potential to go up, according to the real estate agents. According to the prognosis of the Royal Institution of Chartered Surveyors, in the year to come there will be a strong interest towards the available office premises in Bulgaria and Romania, Hungary and the Czech Republic on the side of the outsourcing companies. The same institution makes prognosis for an increase in the rental levels of the three segments of the business properties in Sofia – offices, trade and industrial premises.
The interest towards the offices in Sofia is serious as there is a demand on the part of the outsourcing companies, which are looking for larger office premises with good location and surrounding infrastructure. According to one of the biggest investors in business properties on the Bulgarian office market – the Greek company Zeus Capital, which is behind Kambanite Business Center in Sofia, Bulgaria along with the other companies in Central and Eastern Europe is turning into a main investment aim. The number of the investments that are now made in Sofia is currently quite limited, though there are projects with good quality which can guarantee good return for the investors.
Meglena Kuneva, the Bulgarian Deputy Prime Minister, warned the local authorities that the forthcoming report by the European Union Commission on justice and on internal affairs is not going to be positive. This document is prepared on a yearly basis and is done under the Cooperation and Verification Mechanism. That mechanism was established especially for Romania and Bulgaria for their entry into the European Union in 2007.
According to Kuneva, that report shall not be favorable for Bulgaria, especially when compared to the report for Romania. This will be so as Bulgaria has not marked a progress compared to the previous report. At the same time Romania expects a second positive report, marking its progression. Bulgaria receives bad reports due to the delay of the political measures. Kuneva hopes that the next Cooperation and Verification Mechanism report will be positive once the country elects a Chair of the Supreme Court of Cassation, as well as a Chief Inspector at the Inspectorate of Bulgaria's Supreme Judicial Council. According to her a judicial reform is of great importance for the country to have better chance to be accepted at the travel free Schengen zone.
Kuneva further said that the Justice Minister and the Interior Minister are determined to restore the bid of Bulgaria for Schengen accession and make that their priority. In order to become part of the Schengen area with no border control, Bulgaria has to be prepared in terms of border security, visas, protection of personal data and police cooperation.
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