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Many international companies which are looking to relocate and outsource their business activities, as well as many local companies whih are expanding and are looking for more spacious office premises in Sofia, are driving the office market in the capital and largest city of Bulgaria. The demand for new, modern and perfectly organized office buildings in Sofia is serious, while at the same time the developing companies that are actually investing into such projects and constructing office premises are not many in number. It is a fact that the professional real estate companies warn about – the high-quality office premises in Bulgaria of the class A are almost sold or rented out, leaving not many available office premises in Sofia for the new international companies that are emerging on the market.

Since there are only several new office projects of that type, the real estate experts predict an increase in the rental prices in the office premise in Sofia city. In 2013 have been issued only 156 certificates for construction of business builidngs on the territory of the entire country, which is the lowest number of construction certificates issued from the start of the crises until that moment. In Sofia city, where is the largest market for such office premises now are being constructed only the office zone of Bulgaria Mall and the business building Capital Fort. All other office buildings that are being constructed in Sofia are small in number and are being built at the periphery of the capital city.

The rental levels of the offices in Bulgaria remain amongs the most affordable of all compared to the rest of the office markets in Europe. Other countries with affordable office rentals are Cypruss and Croatia, as well as Macedonia and Estonia. The yearly expeses for renting an office in the center of Sofia is approximately 223 Euro per sq.m. This sum includes not only the monthly rental per month which is approximately 12-13 Euro per sq.m, but also the other expenses for monthly bills and maintenance taxes. At the same time the rental of office in the most expensive business destination on the earth – London is estimated to be 2122 Euro/sq.m per year or 10 times more.

Bulgaria and especially Sofia is very attractive to the outsourcing companies for many reasons though and not just because of the low rental levels. Naturally, the low cost is very appealing to the intrentaional companies looking to outsource their business to Sofia. Yet, the managers in these companies are also taking into account the other expenses and bills, the local administration, the IT service, the financial planning, etc. These large international companies are also considering the fact that Bulgaria has one of the lowest corporate taxes in Europe and the fact that the wages in Sofia are among the lowest in the capitals of Europe. Naturally, the international companies looking to open offices in Sofia are searching for well-educated and trained employees and professionals, which they can find here.

Only 20% of the high-class offices in Sofia are currently available for rent. Most of the offices of the highest class A are situated in the central zone and in the business area of Sofia close to the ring road. The demand is for offices between 150 and 250 sq.m, as well as for larger office premises in Sofia above 500 sq.m of area. The large international companies that are looking to outsource their business to Sofia and the local office that are expanding and are in need to relocated their Sofia offices are looking for modern business centers with good transport locations and many extras.

The real estate agents confirm that approximately 60 000 sq.m of high-class office premises will be completed in Sofia by December 2014. According to them these office premises will not be available for too long on the market, as these premises are of great interest to many potential investors in the Sofia city office market.

The reports of the leading real estate agents show a tendency of increased number of rented offices in Sofia. The Sofia rented office premises increased with 12% and most of the offices were rented by companies working in the IT and the outsourcing sphere. It seems that the property market is recovering and it all started with the office market. The total number of the rented office premises in Sofia has recently exceeded 100 thousand sq.m, which happened for the first time since the start of the global financial crises.

The players on the property market, which are showing interest in the modern office buildings in Sofia are local and international companies. These companies are working mainly in the IT sphere and in the outsourcing sector and they make 40 % of all the companies that are currently renting offices in Sofia city. Since the beginning of 2014 the number of the available office premises in Sofia in the top ten business centers has decreased with 7.5 %. The prognosis are for 60 000 sq.m of office premises of class A in Sofia to be completed by the end of 2014. However, since the companies looking to rent offices in Sofia are quite active, the number of the available office premises will not increase permanently.

According to data presented by the National Statistics Institute that was released at the beginning of this year, the permits for the construction of new office buildings in Sofia city that were issued at the end of 2013 were few in number. At the same time these projects for office centers in Sofia were for larger buildings with more office premises. For example, in the last quarter of 2013 the Sofia authorities have issued building permits for 36 new Sofia office buildings. This marks a decrease of 36% compared to the permits issued during the previous quarter a decrease on a yearly basis of 25%. At the same time, these buildings feature a 100 % increase in the space or in other words the office buildings in Sofia are becoming much larger in size.

In general, the total area of the new office centers that are to be built in Sofia will be increased by 33 % percent compared to the office buildings in the middle of 2013. The companies which are outsourcing their business to Sofia city in search of well-educated employees are in search of modern office buildings of the highest class, with many extras and easily-accessible parking zone, as well as with good location close to the stops of the public transport.

The office market in Sofia city is not only recovered, but it is actually in a process of being very stable. According to the reports of leading real estate companies, since year 2013 the office property market in Sofia reached its highest level since 2008. During the last year and in the current year the office situation in Sofia has been very stable and for the first time since the crises, it has exceeded 100 000 sq.m. of newly constructed market space. The office premises in Sofia that have been bought for investment purposes has increased to 56 million Euros, though the number of the deals signed is not large.

The number of the available offices in Sofia city has dropped significantly as the international companies outsourcing their business to Bulgaria have been renting the existing offices of class A. That is why currently the office market in Sofia has a limited number of available high-class offices and the rental levels at the moment have reached 12 Euro/sq.m. a month. The modern office buildings of the highest class come with high occupancy. It is expected these rental levels of offices in Sofia to reach new, higher levels of occupancy.