Category: blog

In the past five years the tenants and the buyers of Sofia offices were the ones dictating the market for office space in the Bulgarian capital. This is expected to change in the near future, but why is this so? The answer is simple – the supply of office space in Sofia has increased just slightly in 2013 when only three business centers of class A have been completed. During the current year it is unlikely for significant office projects intended for rent to be completed. Some of those complexes that are currently under construction also slow a slight progress and the prognosis are that they will be delayed and will have 2015 as a completion date. The office space under construction may seem significant, but it is not certain that all projects will be completed as promised.

Five are the most sought after office centers in Sofia, where two of them are fully rented out or sold out. At the same time the vacant spaces in the other three are less than 10 %. The percentage of all office premises that are available in the top ten office complexes in Sofia are less than 14 %. This means that the large corporate companies will find it difficult to get office premises that correspond to their requirements for architecture of the building, location and transport connections. The rental levels have remain the same with the best and most prestigious offices being offered between 9 and 12 Euro/sq.m per month.

Sofia offices of the highest class A are the ones that are most sought after and their rental levels remain stable. At the same time the number of the available offices of that class is going down since not many investors are now starting new projects for luxurious office buildings. The stable rental and sales levels of these high-class Sofia offices will remain the same, according to the prognosis of the real estate agents. The demand for such offices is due to the outsourcing business, the IT companies that are based in Sofia, the pharmaceutical companies and the shared services call centers. All those companies and business representatives are looking for business centers of high class that have large office premises and convenient to use transport infrastructure.

Approximately 65 % of the available office premises in Sofia are based in the business districts outside the center of the Bulgarian capital, followed by 20 % office premises in the center of Sofia and 15 % in the other regions of the city such as Lozenets district, for example. Due to the increased demand for offices of class A and the lack of new projects the construction of which have started this year, real estate agents predict that there will be a shortage of quality offices in the near future, which will lead to a new niche for prime buildings construction with reasonable investment and a great location. In the next months to come shall be finished several new office projects that will meet to some extend the needs in that segment of the market.

The modern offices in Sofia that are part of high quality business buildings of class A are not that many and in the near future there might be a great demand for such top offices. This is so, as in the first six months of the year were rented or sold 44 % of the high-quality Sofia offices. These are offices with excellent location in Sofia, many facilities and extras, large parking zones and perfect business atmosphere. The available office premises in Sofia of that class are approximately 12% and their number is going down. Managers of top companies that have entered the market prefer the business districts and the Sofia office buildings of higher class where they can count on parking zone, lack of city noise, more green areas, security services and common parts management services.

Sofia city remains one of the most sought-after destinations in terms of good professionals, low expenses levels and great offices. That is why many foreign companies decide to invest in Sofia and relocate their entire business or just a part of it. It is no surprise that so many outsourcing companies are now coming to Sofia, renting offices in the business zone of Sofia and hiring local professionals.

Typically, the property market is not very active during the summer season and this is valid for the market for sale and rent of offices in Sofia. During the last few months, the office market in Sofia faced no big changes. The situation in the Bulgarian capital shows that there are many office buildings and the tenants still have a good choice of office premises. The companies are looking for more extras and better location of the Sofia offices, while at the same time they are trying to get them at lower prices.

According to the real estate agents, the modern offices that are part of office buildings of class A are rented out in the price levels 8-11 Euro/sq.m. However offices in Sofia could also be rented at 5 Euro/sq.m if the location is not that good and in case the office is not part of a modern business center.

The expectations of the real estate companies are that there will be a higher and more serious demand for offices in September, when many companies will decide to get a new, bigger office in Sofia and relocate before the winter season. Thus, the agencies predict that some of the modern office buildings will get new tenants soon and the Sofia office market will enter a new phase.

The number of available offices in Sofia has dropped, since the interest towards them is serious for the first time after the start of the global financial crises. The Sofia offices that are now available are around 20% from the total number of offices in Sofia or around 350 000 sq.m. Around 70% of the available office premises in Sofia are positioned in business buildings outside the center of the capital. Since the beginning of the year have been rented almost 76 000 sq.m of office premises which is an increase with 150% compared to the first half of 2012. The companies which are in search of offices in Sofia come from the outsourcing sector mainly. These are large international companies that are coming to Sofia for the low rental levels, the easy process of company registration in Bulgaria and the low taxes. These companies are renting the offices of class A, which offer many facilities and modern extras.

According to the real estate specialists, there are 18 office centers in Sofia of the highest class, which correspond to the international requirements for the quality of construction, the easy access with automobiles and public transport, etc. The offices that the investors like most are set along “Tsarigradsko Schousse” Blvd. and “Bulgaria” Blvd., as well as near the Sofia Airport and the ring road. The rental of Sofia offices varies from 9 to 12 Euro/sq.m depending on the location.