Are you looking for office space for rent? Then you probably want to know what is the rental price of the office space that you need. Although the market for office rent in Sofia is large, when a person starts looking for an office, he often cannot find the desired office, or in case he finds it, it turns out that it is much more expensive than the budget he has set.
The cost of office rentals can vary considerably within the city and even within a certain area. Therefore, in order to help you better understand the lease prices of offices for rent, below we have prepared a list of the main factors that determine the rental levels for offices in Sofia.
The rental price for an office depends on several main factors:
– location of the office
– type of building in which it is located
– Features of the office itself
– The floor on which it is located (only in some office buildings)
Location of the rental office:
In recent years, several major business districts/clusters have developed in Sofia, which are a preferred location for most companies.
For Class A office buildings, the highest rental levels are for office buildings in downtown Sofia, Tsarigradsko Shosse blvd. and Lozenets in the area next to Paradise Mall. At the last location are some of the newest and most modern class A office buildings in Sofia, built in the last few years. At these locations, the office rental prices are 12 – 16 Euro / sq.m without VAT.
The middle price range includes the offices located in Mladost 4, Todor Alexandrov Blvd., Iztok, Lozenets, outside the Paradise Mall area, as well as the office buildings in the areas around Bulgaria Blvd. Here the rents vary between 8 – 12 Euro / sq.m without VAT, with of course exceptions for the newest class A office buildings, where rents are higher.
There are also class A office buildings, which are located in different and slightly more distant from the center areas, where you can rent an office for less than 8 Euro / sq.m. These are areas such as Druzhba, Sofia Airport, Geo Milev, Student City (Studentski Grad) and others.
The type of building is the other factor that determines the amount of rent
Offices in Class A office buildings are usually rented at the highest price levels specific to the area. However, this higher rental price allows for the use of many additional extras/amenities that the building offers. Such extras are the representative common areas in the building with a 24/7 reception, conference halls, designated places for recreation such as a park environment or large panoramic terraces, restaurants, in some cases a commercial area, fitness, underground and outdoor parking and more.
The rents in class B office buildings are lower, and those in mixed-use buildings or in residential buildings are the lowest and in some places can reach 5-6 Euro / sq.m.
Features of the office itself and the floor on which the office is located
The rental price of some of the rental offices also depends on their specific characteristics. These can be the layout of the office, the presence / absence of a kitchenette, bathroom in the office, bevels, etc. The features of an office affect the rental price mostly for offices located in mixed-use buildings or in residential buildings.
The floor on which the office is located can also affect the office rental price in some cases, including large class A office buildings. In some of them, the rents for the offices located on the higher floors are 1-3 Euro / sq.m higher than those for the offices on the lower floors. Ground floor offices are also generally offered at lower prices.
If you still have doubts about the best choice for you, according to your budget, you can contact us for a free consultation at: 00359 885 908 811; 00359 888 137 222 or e-mail: [email protected]
6 things to consider when looking to rent an office
Choosing an ideal office for your business is not an easy task, because there are a lot of factors which you have to take into consideration.
Because of that, a good understanding of the market can significantly cut the time you spend searching for an office.
То help you find an office we made a list with basic factors you have to take into consideration when looking for an office space to rent.
Determining your budget is the first thing we advise you to do when searching to rent an office so that you don’t lose time and energy in worthless viewings. The office market in Sofia is large and varies in price so your budget is the defining point between which offices might be suitable for you and which are not.
The rental price is determine by factoring the following points:
– The office location
– The type of the building where the office is
– The features of the office
– The floor on which the office is ( only for part of the office buildings)
Location is key when choosing an office space. The office should be easily accessible for both your employees and your customers (if they visit you often).
If your office is difficult to find or in an area with few transportation links, this can negatively affect finding new employees or retaining old ones, as well as your relationship with customers.
Very important for the location of the office is the existence of nearby dining areas, cafeterias, bank branches, parking spaces, public transport stops, etc.
If your company’s employees, as well as your customers, travel mainly by car, then it is better to choose an office with a location that is outside the most popular ones, but will provide you with easy accessibility and parking.
One of the most preferred areas in Sofia are those in the immediate vicinity of the metro, which provides fast movement, regardless of overground traffic. The proximity to the metro is extremely convenient, but it also brings with it higher rental levels for the offices around it.
3) Office size
The size of the office is the next thing you need to consider when looking for an office for rent. If your business is growing and you expect the number of your employees to increase, it is good to consider whether to take a slightly larger office that will meet your needs in 6-12 months or choose a larger office building that will be able to to provide you with a larger office for rent when needed. You can read more about how to determine the office space you need and what to consider at How much office space for rent do I need?
Some of the offices nowadays come with a wide range of additional amenities. Before you start your search, we recommend that you decide what amenities your employees need to have access to. Those can be places for rest, meeting and conference halls, restaurants, fitness, bicycle parking, outdoor green space, etc.
Keep in mind that the more additional extras that are offered in an office building, the higher the rental price of the offices in it will be.
5) Term of rental agreements for offices
There is a significant difference in the conditions for renting an office in the different types of buildings. Below we will describe the main differences to help you decide more easily what type of office building would be most suitable for your business depending on your plans and resources.
In class A office buildings, the term of the contracts varies between 3-5 years, and in most cases this period is unbreakable. If you are not ready to commit to such a long-term lease, we recommend that you look for an office in one of the other types of buildings (class B, mixed-use buildings or residential buildings), where the term of contracts varies between 1-3 years and many contracts are often with more flexible terms and conditions.
6) Additional costs and fees for renting an office
The Service charge (maintenance fee) as well as the security deposit are an integral part of the rental agreement for each office and are important to consider when determining your budget.
– Service charge
In addition to the rent, in office buildings you have to pay a service charge, which is calculated based on the rental area. Usually for class A office buildings it varies between 2 Euro / sq.m – 3.5 Euro / sq.m without VAT, and for class B buildings it is between 0.8 Euro / sq.m – 2 Euro / sq.m without VAT. This fee is different for each building and is paid monthly, together with the rent for the office.
There is also a maintenance fee due for common parts in mixed-use buildings and residential buildings, but it is usually minimal and does not depend on the size of the office.
– Deposit for the office rental agreement
In every rental agreement there is a security deposit that has to be paid by the tenant, which serves as a guarantee for the good maintenance of the office premise and the timely payment of the amounts due under the contract.
For Class A office buildings, this security deposit is usually equal to of the sum of 2 or 3 monthly rents plus the subsequent service charge fees. For Class B office and mixed-use buildings, the deposit is the sum for 1-2 months
At Sofia Offices we know how important it is to choose the right office space. Our team is available to help you find the perfect place for your business without wasting time in unnecessary surveys and market research. Are you ready to start your search? Contact us by e-mail: [email protected] or call us at 00359 888 137 222; 00359 885 908 811.
How much office space for rent do I need? – Few useful tips
Taking an office space for rent is a very important decision, which is bounding by a contract for years to come, so choosing the right office size is very important. In addition, the right office size will provide you with a calm and pleasant work environment with enough space for you and your employees. Choosing the right size of the office depends on several key things:
1. Type of the office building
First of all, it is good to decide what kind of building you want your office to be situated at. In other words, whether you are looking for an office for rent in class A office building, class B, mixed-use building or office in a residential building.
In almost all cases, the offices for rent are offered with their gross area, which includes the net area of the office and added area for common parts of the building, corresponding to a percentage of the common parts. The rent is calculated on the gross area of the office.
An exception to this are the old administrative buildings, as well as the old residential buildings built before 1998, which offer offices for rent with their net built-up area.
What is the difference in % of common parts for different types of buildings?
Class A office buildings are the largest business buildings in Sofia with large and representative common areas. The rental area of the offices in these buildings includes a larger % of common areas, which is between 14 – 24% depending on the building.
For smaller, class B office buildings this percentage is between 10-12%, and for residential buildings – about 10%
What does “leasable area” mean and include?
The leasable area is the area on the base of which the rent for an office is paid. It includes the net area of the office (the built-up area of the office, together with the walls), as well as the area of common areas, in accordance with the above-mentioned percentages.
2. Additional premises in your office
The additional rooms that you will need are also important when choosing the right size for your office.
Additional, auxiliary rooms are the second thing you need to think about before determining the size of the office. It should provide enough space to work comfortably and without worries about lack of space or excessive waste of space in it.
In addition to the workrooms where your employees will work, you need to consider what additional rooms you will need – such as a meeting room(s), kitchen, lounge, storage room, server room, terrace, etc. The area of these additional premises should also be taken into account when determining the size of the office you are looking to rent.
Keep the following standards in mind when choosing an office space:
The standards assume an average of 7-10 square meters minimum space required per person in an office.
In open-space premises, you can put in more workstations than on the same area in an office divided into separate rooms.
If you’re seeking to set up a business in Bulgaria, you will certainly need to consider renting out an office. Local, as well as international realty firms operating the domestic market, are best placed to help you negotiate your way around the choices. Yet, we can certainly offer you a fast summary of your alternatives.
Modern office complex
Rental fees for Class A workplace in Sofia stand at 10-12 euro/m2 at the end of 2018. Although at first glance it appears like there are a lot of high office buildings around Sofia, it turns out there is actually sort of a lack of excellent office spaces that fulfills the requirements of international companies. Bulgaria’s popularity as an outsourcing destination has pushed up the leas and has led to reduced availability. Outsourcing businesses require class A workplace with all the modern-day services for their teams. Additional services related to safety, cleansing, hidden wiring, web and phone accessibility, cooling, cars and truck garage, restaurants and coffee shops, recreational locations, among others, are also needed. That’s why large workplace complexes like the Business Park Sofia still draw in many companies since they offer every one of these additional services, plus outside areas, a selection of dining as well as coffee shop choices, shops, and even dry cleaning. Business Park Sofia remains, in fact, a mini-city.
According to Forton, a real estate consultant, there is presently 1.7 million m2 of Class A and B office space in Sofia.
Most of this is located along the main web traffic highways such as Tsarigradsko Shosse, Bulgaria Boulevard, Todor Alexandrov Blvd, Nikola Vaptsarov Blvd as well as in the residential areas and also the area near Sofia Airport. Significant new projects currently being developed in the prime office segment in Sofia city centre include City Tower (34,600 sq m leasable office space) at Macedonia Square as well as Millenium Centre – 3 high structures near NDK.
Serviced workplace can be a remedy both for long term as well as short-term requirement. Serviced workplace gives fully furnished and also equipped workplaces, IT infrastructure, safety and security and secretarial as well as admin support. This can be a terrific benefit to companies not wanting to make capital expenditure on fitting out a workplace, authorizing long-term rental agreements. Serviced office suppliers offer a great deal of flexibility, consisting of the possibility to alter workplace dimension, per hour rental of conference room, online offices. This is specifically attractive for start-ups and also worldwide companies.
Workplaces in apartment
Many companies still choose workplaces in apartment buildings in the centre of Sofia in spite of negative aspects such as traffic jam, vehicle parking as well as the old facilities of a number of the structures. Most apartment or condos for rental as workplaces are on the ground or on the first floor. The convenience of being situated in the city centre is what leads most companies to select such offices, especially if their organization negotiations happen around. Furthermore, there are some very attractive older buildings around Rakovsky St., Physician’s Garden area, which can add prestige to the firm’s picture. Leas differ hugely from around 4 euro/m2 to equal those of the Course A workplace centres at 12 euro/m2.
Coworking is becoming crucial in Sofia, and there are numerous coworking spaces. Such spaces are Soho, Betahaus,Cosmos Coworking Camp,Trevor Workspaces – Lozenets and more, which offers offices, coworking area, a coffee shop with a yard. Also hosts a variety of exciting events.
The newly established Bulgarian Outsourcing Association made prognosis for a stable increase in the number of companies that plan to outsource their business to Bulgaria. These companies be registered in Sofia and could come from many spheres of activity. The new association predicted that the increase in the number of companies will be around three times in the next five years. The outsourcing business is considered among the most dynamic industries in the country and currently it employs around 15 000 people in the capital. Their number is expected to triple according to the five year prognosis. The stable political situation, the low taxes and the acceptable wages in the country, the professional skills of the employees, as well as its being part of the European Union, make Bulgaria an attractive destination for the large and stable companies in Western Europe and the United States. These companies will look for business centers with offices of the highest class, which have central and convenient locations and perfect infrastructure, besides offering an impressive range of services and facilities. It is believed that these big companies will later open other offices throughout the country in cities like Varna and Bourgas, Plovdiv and Rousse.
Among the founders of the Bulgarian Outsourcing Association are companies like Coca-Cola Hellenic IT Services, AII Data Processing, Sofica Group, Atos Bulgaria and Bulpros. They believe that if the state and the companies join their forces, this will lead to a stable development of that industry sphere. If the proper activities are arranged and successful policies are followed, then Bulgaria can become one of the top ten destinations for outsourcing. Special attention has to be paid to the professionals who apply for work in these outsourcing companies. Usually, these are people with a lot of knowledge and skills, but they still need training in certain spheres. It is not a secret at all that some of the largest outsourcing companies that are working in Bulgaria are in direct connection with the universities where they look for ambitious students. They try to attract the talented ones and offer them a job before they head to a carrier abroad. There is potential in the rest of the big cities in the country besides Sofia, where there are no such projects and opportunities, but there are still good professionals. The outsourcing industry is in demand for different types of employees – from recent graduates to managers and strictly qualified professionals.
In general, Bulgaria has excellent reputation among the companies in the outsourcing business and it will continue to attract them. The reasons for that are not only the membership of the country in the European Union, but also the tax alleviations and the desire for less bureaucracy. Of course, we should also mention the welcoming atmosphere, the excellent infrastructure and the construction of business centers with prestige location that correspond to the needs and the requirements that are important to the foreign investors.
Year 2017 that just ended can be defined as the year of the tall buildings in the capital of Bulgaria. The skyscraper projects provoked numerous disputes, protests, and debates about the need for such tall buildings in Sofia and the chosen location for them.
In February 2017 one of the biggest projects – Grand Kanyon Sofia received a building permission. The event was followed by more plans for constructing big office buildings in Sofia including a multi-functional building (215 m) near a large mall, a project for a residential building with offices (100 m) in Lozenets and an office building project (80 m) next to Bulgaria Blvd in Borovo District. In the autumn of 2017, it was reported that there is a serious struggle against the construction of an office building (150 m) in Strelbishte District due to lack of all the necessary documents.
Conversely other two tall office buildings has gained their building permissions and both are currently under construction. One of these office buildings is located on Tsarigradsko shosse Blvd while the other is rising up in the heart of the city on Macedonia Square. The increased demand for business offices in the capital have led to the renewal of several old projects for office buildings as well. In general, the largest office building projects of 2017 in Sofia are mainly focused on good infrastructure and fast transport links, with the new metro lines which are currently in development, being the main factor.
The Today’s Office Building Projects in Sofia
Which are the present worth mention office building projects in Sofia and what will they offer us as work area and environment? Let’s take a look on them.
Grand Kanyon Sofia
Grand Kanyon Sofia is one of the biggest office building projects that will be constructed in Mladost 2 District. The building is situated right next to Alexander Malinov metro station which grants quick access to almost each city point. The investor of this huge project is the Turkish company Garanti Koza.
The project includes modern offices, two residential buildings with 700 apartments, a hotel from an international brand, an entertainment and commercial center with a cinema complex, a spa area, and a park. The investment is expected to reach 120 million leva and the launch of the site is planned for 2020.
Advance Business Center
Advance Business Center is an administrative building on 11 floors in Mladost 4 District. It is built near the Business Park and is expected to be the tallest building in the area. The project has been financed by the foreign investor Global Trade Center. The company plan to open an area of around 14,500 sq. m. with Class A offices right after the first stage of the project is completed.
The investment for the entire project is 54 million euros, and the first building is expected to be finished in April 2019. The second part of the project is awaiting a building permit.
In the very heart of Sofia, only a few meters away from the Levski monument, a hotel of a famous international hotel chain is under construction. In addition to the countless five-star luxury rooms and suites, two restaurants, two bars, and a huge spa center, the Hyatt hotel will offer a large conference hall with an area of 600 sq.m as well as five smaller meeting rooms. The common space for the organization of various business meetings and events will be 1300 sq. m. The company owner of Hyatt Hotel project is Terra Tour Service. It plans an investment of 30 million euros that will support finalizing the project during the first half of 2019.
Building Office A
Located near Tsarigradsko shosse Blvd, this office building will provide office space of the highest Class A. The building will also feature a restaurant, a café and an underground parking area. The investment is 10 million leva and the expected date of completion is December 2018.
Office Building 15
The company Arko Real Property Holding will locate its Office building 15 in the eastern part of Business Park Sofia, not far from the lake. The building features an interesting architecture and offers five levels of offices and two levels of parking lots, as well as a ground floor with shops and restaurants. The roof space will be organized as a small park. The project value is about 30 million leva and the expected date of its completion is December 2018.
Interest in Class B Office Space in Sofia
The optimistic forecasts of the business and the good economic performance in 2017 affected the office property market in Sofia. Along with the new class A office projects the interest in Class B office spaces in Sofia has also revived.
Available Office Premises and New Office Projects in Sofia
The volume of new office rents has increased by 14% in 2017 compared to the previous year 2016. The offices of class A and B available at the end of 2017 are approx. 187,000 sq.m. Under construction are approx. 340 000 sq. m. of office space that are to be completed in the current year of 2018. At the same time, in 2017 were issued building permits for offices with approx. size of 110 000 sq.m. The experts expect that by 2020-2021 another 300,000 sq. m. will be completed.
There is a slight increase in the rental rates, reaching 7-10 euro/sq.m. for Class B offices and 12-14 EUR/sq.m for Class A offices.
The preferred business locations in Sofia remain the same. The interest is towards office buildings located in the districts of Lozenets, Hladilnika, near the Business Park Sofia, around Tsarigradsko shosse Blvd., Todor Alexandrov Blvd and Bulgaria Blvd. These areas have a high percentage of already rented office space at an early stage of the projects. The demand comes from well-established companies that expand their business and from emerging companies that are starting their business in Bulgaria.
In the second half of 2016 the offices under construction in Sofia city reached 175 000 sq.m. The offices are expected to become ready in the capital city of Bulgaria in 2017. Great deal of these new office premises are based in the main business zones of the city, along Tsarigradsko Schousse Blvd., the ring road, the Business Center in Mladost 4 District and the city center.
Even so, the trend is for decreased number of available office premises. In fact, the available offices of class A and B in the last quarter of 2016 were approximately 210 000 sq.m, which is two times less than the previous quarter. The average rental levels remain unchanged, which means 11-14 Euro/sq.m for the offices of class A and 6.5-8.5 Euros/sq.m for the offices of class B.
One of the major construction companies in Bulgaria will built a huge office center right in the heart of the Bulgarian capital Sofia. This will be the second phase of the Polygraphia Office Center and it is calculated at 10 million Euros. The completion of the new office project is planned for the end of the summer 2017 and is expected to provide 12 600 sq.m of Offices of the highest class A. The investment is backed up with the Bulgarian holding company AG Capital and the British Real Estate Fund Northridge Capital.
The new office building will feature six floors and an inner yard. It will be connected to the already existing office center through a solid covered passage. It will feature a parking zone on two levels with 100 parking lots. The new office building will further have an ecological certificate LEED Silver. The rental levels in that office building under construction, are expected to be around 13 Euro/sq.m.
Various companies from UK and Russia show interest towards Sofia offices market. They are opening new branches in the capital city of Bulgaria and are one of the numerous companies that are looking for new and larger office premises. Due to that many investors have stared new office building projects in 2016, choosing locations that are within easy reach to the already established office areas in Sofia.
The new companies that are in search of offices in Sofia are looking for 700 – 800 sq.m of usable area, in office buildings of class A, placed within easy reach to the central parts of the city. Those companies are usually outsourcing their business to Sofia, or are working in the spheres of communications, financial services, information technologies, etc. Often those companies are serving not the local Bulgarian markets but clients outside the territory of the country.
The rental levels of the Sofia offices vary in the price range between 10 and 13 Euro/sq.m, while the interest towards the new office projects remains high. These facts make many investors start planning new office buildings in preferred Sofia office locations in the next 12-18 months.
The newly founded companies in Bulgaria and those that are outsourcing their business in the capital city of Sofia are looking towards office premises of around 200-300 sq.m. There are also companies that are searching for office premises of 700-800 sq.m. The business situation in Bulgaria is changing and that is felt everywhere. In many cases the companies that are looking for offices in Sofia are serving markets and clients outside the country.
The office buildings with central location and good functional distribution of the office premises have been rented with approximately 5-10% availability only. The rental levels are between 10 and 13 Euro/sq.m. depending on the desire of the owners of those offices to make discounts.