Category: Offices for rent

Sofia city is a wonderful business destination for the large international companies, which plan to outsource their call centers and part of their services and practices to a more affordable destination. Sofia is the only European capital where these companies are able to rent offices and entire business centers for a monthly rental price ranging from 4.5 to 12 Euro/sq.m. Among the affordable office buildings in Sofia city is the Benchmark business center on Tsarigradsko Schousse Blvd. with its office premises of 17 500 sq.m. The office building was completed in the beginning of the financial crises and had difficulties finding tenants due to the high rental levels. Today the rental levels are normal and the business center is welcoming new companies from all spheres of business since it has excellent location interesting architecture and spacious atrium which adds to its charm and which could be used for hosting exhibitions and various events that will improve the working environment.

Another business center that is trying to gain the interest of the big companies and find tenants is the Vertigo Business Center in the district of Manastirski Livadi-Iztok. The office building has an impressive architectural form and is placed near Bulgaria Blvd. Those companies whose sphere of business requires them to be close to the Sofia Airport can rent offices in Sofia in the Black Diamond Business Center near Georgi Asparuhov Stadium or in the new office building near Domko Hypermarket on Vladimir Vazov Blvd. The office buildings that are new and waiting to be rented by business companies from Bulgaria and abroad are 25 in number with usable area of 130 000 sq.m. where 75 % of that brand new office area is vacant.

The modern Sofia offices are following the tendencies of leading European countries, aiming to offer excellent working conditions, results oriented facility management practices and optimization of the expenses. According to the chairman of the European facility management network, the financial difficulties in the past few years have had an impact on the office market in Bulgaria and all over Europe. Today the office premises are used more wisely, the living space is optimized and many efforts are made for the employee productivity in the offices to be increased. Today this is possible with a deep analysis of the business specifics, optimization of the working processes and implementation of new and modern technologies. The effective usage of the office area in Sofia is associated with good understanding of the working processes there.

In the past many Sofia offices were designed in such a way as to offer a large study for the manager, which was not fully used since the manager is often traveling or outside meeting business partners. Before the crises the employees were not feeling comfortable using that office area in Sofia for the purposes of the meeting. Today, many employees are arranging meetings with important clients in the cabinet of the manager when the manager is away and this is no longer strange or taboo. The optimization of the expenses of the offices in Sofia is very important, but this does not mean that the office “kitchen” or the coffee room should be cut. On the contrary, these areas make the colleagues and office employees communicate, solve work tasks in more informal environment and thus improve the working climate in the company in general.

All modern and new office centers in Sofia use the services of property management companies, which are either owned by them or hired. The property management is a though business and it is often associated with problems that arise if there is no a proper contract. The rental contract that the companies sign when renting an office in Sofia should include detailed information of the services that the property management should offer and the sum that the companies have to pay for that service.

The expenses in each office building in Sofia go beyond the monthly rent and this is normal. In addition to the monthly rent, companies that reside in a certain office center in Sofia should also cover a service charge and supplies. The service tax includes all expenses done on managing the building and associated with the business center normal everyday functioning. The companies that rent offices in Sofia are usually required to pay for security, maintenance of the elevators, common parts and installations, and for the landscaping of the green zones. The companies that are renting offices in professionally maintained business centers should ask for detailed list of the things and services they pay for. This will avoid future problems between the owner of the office center in Sofia and the company that is renting an office in this building. In general the property management fee at the office market in Sofia varies from 1.5 to 3.5 Euro/sq.m. This fee could be paid in several installments throughout the year.

In year 2013 were constructed almost 70 000 sq.m of new administrative premises and office areas. The increase is significant f compared with the situation on the office market in 2012. The new projects for office buildings that started are focused mainly on small office premises and many of them are arranged for the usage of the companies that own the land and the property. Usually these are office projects that have been prepared long time ago, but have been postponed because of the financial situation of the past few years. Still, the real estate experts say that time has to pass until the complete recovery of the office market in Sofia and this recovery will be reached once 80 000 sq.m. of new office premises are started each year.

The large office buildings that are in project have been started several years ago. Among these large projects are the business center City Tower, the construction of which is postponed. Another large project is the Millenium Center which is in construction but it goes slowly and is expected to be completed in 2015. These new business buildings are expected to bring another 90 000 sq.m of new office premises in Sofia. The office centers that are planned to be completed in 2014 include the Capital Fort project on Tsarigradsko Schousse Blvd., Grammy Complex on Alexander Malinov Blvd. and Bulgaria Towers center, which is the office part of Bulgaria Mall. Further to be completed in the third section of Expo 2000 business center in Sofia city. The new office centers in the area are expected to increase the competition, the quality and the good maintenance of these business centers in the next few years.

In the past few years in Sofia city were constructed many modern offices that correspond to the highest requirements in that sphere. The new offices in Sofia use modern technologies and special systems for reducing the expenses and allow the companies to save up to 30% on their bills. A good example of such modern office building of the highest class A is Sofia Airport Center, placed in close proximity to Sofia Airport. The business center works with an energy-saving air-conditioning and ventilation system and with an automatic system for building management. Thanks to these two systems, the building has constant level of temperature between 22 and 24 degrees, which is believed to be best for the health and the tonus of the employees. Thanks to the good ventilation of the building and the fresh air that comes in the premises, the employees get ill 39 % less than the employees working in the old congenital office buildings. Many of the new and modern office in Sofia have such management and ventilation systems and provide more daylight in the office premises, which has positive effect on the employees.

The most sought after office buildings in Sofia are situated along the two main boulevards – Bulgaria and Tsarigradsko Schousse. There is also interest towards the area along “Cherni Vrah” Blvd., which is now serviced by the new metro line. At the same time there is also interest towards the Sofia offices near the Business Park in Mladost and near the Ring Road. The rental levels of Sofia offices remain stable and vary in the price range of 8-12 Euro/sq.m.

The market of Sofia offices is stable and is expected to remain so in the year ahead of us. The companies that are renting offices in Sofia have their preferences of the location and size, which depends on the sphere of work and the number of their employees. In general the companies that are opening offices in Sofia are looking for central location, in case they plan to employee several people only. These small companies are looking for offices with size between 250 and 300 sq.m. In general these are consulting companies, lawyers and notary offices.

The larger companies from the outsourcing sphere which are planning to open their offices in Sofia or to relocate to a new office thanks to their expansion include offices from the IT, pharmaceutical and telecommunication business. These companies are in search of large and spacious offices in Sofia outside the city center. At the same time there are a few office buildings in the center which do not catch the eye of the companies. This is so as they are located I areas with no parking zone and difficult access or because they come with high rental prices.

Many companies that already have offices in Sofia are planning to rent additional premises or to move to other business centers with more room and potential, as well as with better facilities. This is expected to be the trend of the Sofia office market in 2014. According to the real estate agents, the Bulgarian office market will be strongly influenced by the outsourcing processes and the fact that many companies are now moving their businesses from Asia into Europe.

Sofia office market is driven by those large international companies which are opening their offices in the Bulgarian capital and by the companies which are already on the market but wish to relocate due to the increase of the work load and the number of their employees. The situation on Sofia market could be explained like that – there are plenty of offices on offer, but the selection is limited. This is a problem that many large international companies are to be facing on the Sofia office rental market in the months to come. Why is this so? Many construction companies focused on residential projects rather than in the office projects during the crises, while at the same time many international companies started seeing Sofia as a great destination for outsourcing. That is why many of the available and completed office premises and the ones in the business centers near completion were rented. Actually the business centers with greatest occupancies are placed on some of the largest boulevards.

The expectation of the real estate companies is that the outsourcing companies coming to Bulgaria will focus on the areas near the metro stations in Sofia. This means that some locations that were not popular until now will become more appealing in the next two years to come. The business centers with the highest number of rented office premises include the Europеan Trade Center with 95%, Megapark with more than 80%, as well as Sopharma Business Towers, Litex Tower and Polygraphia Office Center, followed by Serdika Offices.

For two years in a row the Sofia office market is driven by the companies from the IT sphere and the outsourcing area. These are the main companies that show interest in the office premises in Sofia and have rented the largest number of offices in the first three quarters of year 2013. The country and especially its capital Sofia is attracting the attention of the international companies which are oriented towards customer support and business processes. These companies open offices in Sofia as they are tempted by the low levels of expenses for labor, taxes and rental prices. This is good for Bulgaria, since these companies are hiring local people and are offering good working conditions.

In the recent years however, the construction of offices of class A has decreased and the number of new luxurious offices that are completed has dropped. At the same time, this brought to an investment activity. The ten office projects of the highest class in Sofia are attracting the attention of the greatest number of the companies which are looking for an office to rent. That is why the available office premises in this ten office buildings in Sofia is decreasing and the available office premise there is just 12 %. Hopefully, the construction companies will take note of that and will start new business projects for construction of Sofia offices of the highest class.

The trend of activity on the office market in Sofia that was valid for the first six months of the year, continued during the third quarter of 2013 as well. At the end of September, the number of the deals and contracts that were signed reached the total number of all rental office deals for the previous year. The tendency with the rental of offices is for larger number of deals for a smaller amount of money. The total amount of the recently rented offices from class A and B in the third quarter of the year have reached 16 500 sq.m., which is a decrease of 15 % compared to the second quarter. The total amount of all Sofia office premises of class A and class B for the first nine months of 2013 reached almost 50 000 sq.m.

In the first six months of the year the number of the available office premises from class A in Sofia that correspond to the requirements and the international qualifications have dropped from 21% to 14%. As there is a significant interest towards this type of office premises, it is expected the number of the available office premises of class A to drop even further by the end of the year. The major international companies that are opening offices in Sofia show interest towards the areas around Bulgaria Blvd. and Tsarigradsko Schousse Blvd., Sofia Airport region and the ring road. The average rental levels in the office market segment remain stable and this tendency is expected to proceed.

During the first six months of year 2013, the office market in Sofia showed a slight increase and the total area of office premises that were offered almost reached 1 700 000 sq.m. The completed office buildings in Sofia during 2013 added approximately 35 000 sq.m more, most of which being placed in the outskirts of the Bulgarian capital. The greatest number of modern office premises of class A is to be found in the southeastern part of the capital, near the ring road, followed by the downtown and then by the central city zone. During the first six months of the year is registered an increased activity in the office rental practices. The office premises that have been rented cover approximately 76 000 sq.m, which is up with 45 % compared to the figures at the end of the previous year.

The office market in Sofia is driven by the new companies that are emerging on the market and the expansion of the activities of the existing companies which are already operating in Bulgaria. The most active are the companies from the spheres that were not that affected by the financial situation in the past few years including companies working in the spheres of trade, software production and pharmacy. The companies are mainly interested in large office premises with reasonable monthly rentals and functional distribution of the interior area. Great attention is also paid to the good transport connections. Currently, the city of Sofia features 18 projects of class A, which are completed and correspond to the requirements of the international qualifications for office buildings of the highest class A. The highest percentage of rented offices in these buildings, testify for potential shortage of that type of office space in the near future.