Category: Offices for rent

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.

Sofia office market showed signs of recovery, marking the path for the other property markets in the country to follow. The total number of rented offices in Sofia reached its highest peak since 2008 and for the first time in the last five years as the world financial crises have started exceeded 100 thousand sq.m. According to the real estate and financial experts, this is a very good indicator that there is movement in the economics, more activity from the investors and many international companies from the IT and the outsourcing sector willing to relocate their business to Sofia.

Year 2013 was very important for the office market in Sofia. Many foreign companies invested in office space in Sofia and outsourced some of their activities to Bulgaria. According to the realtors, 2013 was the year of the office market in Sofia. The available office premises in the top ten projects have been reduced with 7.5 % and the available offices at the end of 2013 were only 10 %. At the end of this year, the realtors expect for another 60 000 sq.m of class A office premises to be completed. In a result of the reduced number of available office premises in Sofia, the rental prices of Sofia offices have increased to 10-12 Euro/sq.m.

The affordable prices of the Sofia offices are attracting many new companies that wish to relocated entirely to Sofia or to outsource some of their business in Sofia city. In year 2013 one third of all available offices from the highest class A have been rented by large international companies according to the reports of the leading real estate agencies. This is so as Bulgaria remains stable and is among the attractive outsourcing destinations with a lot of well-educated professionals and competitive market.

The international companies which are looking for new offices in Sofia are in search of office premises of class A. The business centers in Sofia they wish to rent office premises at have easy to reach location, many facilities services, large parking zones, etc. Almost 60% of all new rental contracts signed in 2013 was with international companies willing to relocate to another office in Sofia. At the same time 15% of the relocations in new offices in Sofia were due to the expansion of the company and 15% for the rental of offices in Sofia by the companies that are entering the market now. The current rental levels of Sofia office premises are around 10-12 Euro/sq.m., where the offices of class A are definitely being rented at 12 Euro/sq.m compared to the 9 Euro/sq.m a few years ago. The real estate companies predict that soon the number of the available office buildings of the highest class A will further decrease.

The serious international companies that are planning to move their offices in Sofia or to expand their business and rent more spacious office premises in the Sofia are showing interest in the more luxurious office buildings. In general, the office market in Sofia was activated last year and the number of the rented office premises reached the levels from the years before the crisis. In fact, in 2013 the number of office premises that have been rented by new companies and existing companies that are outsourcing their business to Sofia has increased with 30 %. This led to a decreased number of available office premises in Sofia.

According to the real estate agents, the office market in Bulgaria is being driven by international companies, mainly in the IT business. Almost 15 % of all office rental contracts in Sofia that have been signed in 2013 were with new companies that are outsourcing their business to Bulgaria. The prognoses of the realtors are for more such companies to relocate their business to Sofia. The new companies that are looking for office premises in Sofia, as well as the already existing companies operating their business from their Sofia offices are looking towards offices of class A with central location and access to many facilities, which have the necessary capacity to welcome large international companies.

The companies that are outsourcing their business in Sofia are looking for good location with easy public transport links and large parking premises. Currently such office buildings are available in the periphery of the city which make 67 %, while the office projects in downtown Sofia are just 12 % of the total available office space, with 21 % concentrated in the central parts of Sofia. Currently, the office projects in Sofia that are under construction comprise of around 185 000 sq.m.

The office market in Sofia has been quiet in the recent years, however since last year there are optimistic signals, according to the real estate agents who have specialized in office sales. The number of office premises in Sofia that have been rented by companies which have outsourced their business in Bulgaria is increasing now. The total office premises that have been rented in 2013 for example, has reached 116 300 sq.m. The realtors state that 60 % of all deals with offices on the market in 2013 have become a fact due to the expansion and relocation of different companies to larger offices.

Which are the companies that are in search of more spacious offices in Sofia? These are new and existing companies on the Bulgarian market that have outsourced their business from abroad. These are mainly international companies from the IT industry, as well as companies dealing with data processing, financial activities, human resources, etc. The interest of the foreign companies in the office buildings of class A in Sofia provoked the start and completion of successful office centers in Sofia, which are equipped and are in the position to offer all facilities that the managers and the employees in these companies require.

Leading real estate companies confirm the ongoing interest towards the offices in Sofia from international companies that are already in Bulgaria and are looking to relocate and from companies that are planning to outsource their business to Sofia. The companies that are interested in finding new office premises for their business include mainly companies from the IT sphere and the outsourcing business. These companies are looking for offices in Sofia of the highest class A, with good location along the main boulevards of the Bulgarian capital and the lines of the metro. The rental levels of the offices there are stable, ranging from 10 to 12 Euro/sq.m.

According to the real estate agents, the companies from the outsourcing business follow a policy of reducing their expenses, however they are not willing to make compromise with the location and standard of their offices. That is why these companies insist on large office premises in Sofia, which are equipped with all facilities they require and have the necessary parking and the desired location. Compared to the office markets in Europe, the prices of the offices in Sofia are quite competitive.

The member states of the passport free travel Schengen zone were five initially, when the Schengen area was formed back in year 1985. In the years that followed, the border free area was joined by many member states, namely Italy, Spain, Portugal, Greece, Austria, Denmark, Finland, and Sweden. The largest expansion however happened in 2007, when the no internal border area was accepted the following countries as member states – Czech Republic and Estonia, Lithuania and Latvia, Malta and Hungary, Poland, Slovenia and Slovakia. There are three countries that are waiting to be accepted as members. Cyprus, Romania and Bulgaria are not fully fledged members of the Schengen zone, though they are technically ready to become members.

The member states of the Schengen area took certain measures, which were accepted as part of the cooperation efforts under the Schengen agreement. The main rules within the Schengen border free zone include removal of the checks on persons at the internal borders of the member states, a common package of rules applied to all people who are crossing the external borders of the European Union Member states. The rest of the rules include same entry conditions and visa rules for the short term stay, good police cooperation, strong judicial cooperation, fast extradition system, establishment and usage of the common Schengen Information System.

The real estate agents in Sofia confirm that there are new Sofia office projects and locations emerging on the market. These new projects are driven by the outsourcing and the IT sector. As a rule, the international companies that are outsourcing their business to Sofia city are looking for offices on Bulgaria Blvd. and Tsarigradsko Schousse Blvd. These companies are also interested in the offices in Sofia along the metro lines 1 and 2 – in the areas near Cherni Vrah Blvd. and Todor Alexandrov Blvd. The number of the available offices in Sofia however is going down as the rental contracts for Sofia office premises are expected to reach the levels from last year or 90 000 – 100 000 sq.m.

The prognoses of the real estate agents are that the large companies will focus towards high-quality office buildings in zones that have not been that attractive until now. Such areas include Sofia business centers near the airport, the upper zone of Tsarigradsko Schousse Blvd., the zone near Business Park Sofia and the southern part of the ring road. An important factor here is the approaching new lines of the city metro, which will make these locations easily approachable. Some companies from the IT sector and the outsourcing sector are already showing interest in the offices in that part of Sofia. The large office projects in Sofia city include Sofia Airport Center, Alfa Business Centre near the ring road, Bulgaria Tower office center, Megapark on Tsarigradsko Schousse Blvd.

The steady growth of the outsourcing sector in Sofia city led to serious situation on front of the office market investors. The companies from the outsourcing sphere are showing serious interest towards the highest class office buildings, namely business centers AA with all the facilities and extras they come with. The international companies that have picked Sofia as the destination to outsource their business have special requirements towards the office premises they intend to rent. It seems that Sofia city has many available offices, however only four or five of the business centers answer to the high requirements of the office buildings of class AA. Currently, there are two or three projects for office buildings of the same quality and high standard. The main set of offices for rent in Sofia that are available are with size ranging from 250 sq.m to 1000 sq.m, while the large companies from the outsourcing business looking to relocate their business practices in Sofia are looking for office premises with size of 1200 sq.m and larger.

The companies that are outsourcing their business to Sofia city are looking for large office premises in Sofia office centers of class AA, or two or more offices set on one floor. Many of these companies are also planning to expand the number of their employees in the future, thus most probably they will need even larger offices in Sofia to rent. Among the other requirements are the good location and the easy access to the local public transport system, large parking area, good air conditioning and ventilation system, wireless internet, etc.

Sofia city has new types of companies that rent the available office premises in the modern business buildings. More than half of the office buildings in Sofia are rented by outsourcing companies, which choose only high class AA office buildings. The outsourcing industry in Sofia grows significantly with the impressive 20-25 % per year and the companies in that sphere of the business seem to be the ones that are most active on the Sofia office market. The business of the outsourcing industry is associated with investments in call centers and service centers and these companies often need significant space to do their business.

That is why in year 2013, more than half of the office rental contracts were signed with companies working in the outsourcing sphere. This is good news for the real estate agents, however the outsourcing companies looking for offices to rent could be quite precise and demanding clients. Unfortunately, Sofia city has not so many office buildings of such a high class. It seems that the office market has to go in one direction – projects and construction of office buildings of the highest class AA. These business centers with offices have to enjoy central location or location in the organized business areas of Sofia. They should also have good transport connections and large parking areas.