Category: Serviced Offices

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.

The real estate market in Sofia is stable and the years of the crises are behind. Currently, there is a serious demand for offices in Sofia of the highest class A. At the moment the office premises that are provided and the search for such premises are balanced. Most of the international companies are oriented towards offices of class A. Yet, in the recent years not many such high-class business centers have been constructed. Namely, last yeat only 34 000 sq.m of offices from class A and B have been completed. Since there has been stable interest in the offices of class A, the number of the available offices of that class has dropped significantly.

The real estate professionals say that the companies looking to outsource their business in Sofia are searching for office premises in Sofia in the main business destinations, near the main boulevards and close to the airport. The business centers in these parts of Sofia are provoking great interest on the side of the companies and the offices there are being rented fast. The areas that are in the prime zone of interest for the managers of the international companies include the boulevards “Bulgaria”, “Dragan Tsankov” and “Tsarigradsko Schouuse”. The companies which are interested in renting offices in Sofia are from the outsourcing and the IT sector. These companies have high requirements towards the location, the security and the good infrastructure of the area.

Since 2013 there is a new tendency on the Sofia office market, according to which there is a growing number of large international companies which open their branches in the city, other international companies that relocate part of their business to Sofia and many local companies which are expanding or simply want to improve their working conditions by moving to larger and better offices. The largest new business center that was completed and opened doors in the end of 2013 was Bulgaria Office Tower, which is part of the complex Bulgaria Mall. Yet, almost half of the rental offices which are 20 000 sq.m in number were already rented out, leaving just half of them available. At the same time there are 143 000 sq.m of offices undr construction. This makes 30 % of available offices in Sofia.

The companies that are loking for modern offices to rent in Sofia are mainy outsourcing and IT companies. These include IBM Global Delivery Center and Ingram Micro, Experian and Sofia Airport Center. Some easterneuropean IT companies are coming as well including SoftServe and LuxSoft. The rental levels are stable, among 10 – 13 Euro/sq.m.

Sofia Airport Center is among the new business centers of Sofia, which are offering office premises of the highest class A. The international companies which are in process of searching for suitable office premises are easily recognizing the advantages and the potential of the offices that are provided by Sofia Airport Center. That is why these offices are of a high demand and the rental prices of these offices are stable with a tendency to go up. There is also interest towards modern logistic premises.

The companies that are most active on the market are from the IT sphere, the lare pharmaceutical companies and the companies that are outsourcing part of their business to Bulgaria. These companies are looking for modern and functional offices of excellent quality – things they are used to in their other locations abroad. In general, the area around Sofia Airport is appealing and dynamic. It is a fastly growing zone for different businesses as it is not only close to the airport, but also to the center of the city. The area is characterized with brand new and modern office buildings, which forms a modern and functional image of the region. In the area are already working companies in the sphere of IT business, mass media, insurance companies, etc.

Recent research made by the professional real estate agencies in Sofia showed that there is a lack of availale office premises of the highest class AAA. At the same time, there is a demand for such offices, mainly from the managers of large international companies which are planning to outsource their business to Sofia city and from local companies that are expanding and thus hiring new people. There are several new office projects in Sofia that have recently been completed or are soon to be completed. These offices are of class A and come with many facilities and extras, as well as with great city location with good infrastructure and excellent transport connections.

Sofia Business Tower is among the new office buildings of the highest class A in Sofia city. The new business center has unbeatable location on Tsarigradsko Schousse Blvd., in the part which has been naturally formed as a business zone of the capital. Sofia Business Tower provides access to several other business buildings, to the centre of the city and to the airport. Interest towards the office premises in the new business center has been shown by different international IT, pharmaceutical and outsourcing companies. These potential tenants are impressed by the fact that the interior of the offices could be transformed according to their needs. In general, this business center in Sofia allows for the companies to rent as much as 3500 sq.m per floor. The project further comes with an underground parking zone on four levels. The infrastructure includes many green zones and pedestrian areas.

The new business building, which is part of the modern Bulgaria Mall, is to be recently completed according to the world standards applied for the office premises. The office part of the recently constructed (year 2012) Bulgaria Mall is to be completed soon. It has excellent location on one of the main boulevards of the capital, which allows for fast and easy access to each part of busy Sofia city. The construction of the office building Bulgaria Mall Tower has started in the beginning of 2013 and is now completed and ready to be used.

The project of the business building has been designed with a focus towards the needs of the companies that will rent the offices. Certain offices can be transformed or arranged according to the special needs of the companies in order to form the area to suit them most, so that they could be successful at their business. The concept of a trade center and office premises is a good one, a well working formula for successful combination of work and relaxation after the busy day. The offices of Bulgaria Mall Tower are of class AAA and they answer all requirements on the bases of the European and the Word standards for office premises. The building has Building Management System and Building Integrated System, which makes the usage and the maintenance of the building very easy. Thanks to the location and its excellent coverage by the public transport system in Sofia, the people working in this office building, as well as those who have to come here to attend a meeting, will be able to do so easily. The building has yet another advantage – the adjacent Bulgaria Mall can provide all the things that the companies and their employees might need in terms of dining places, places for sports and recreation.