Category: Offices for rent

The office market in Sofia city is busy and even if it had a slight delay and had gone through some tough times, it is still strong and getting attention. The situation is not the same with the offices outside Sofia city. The market of business areas in the country is not that busy. Actually, the average selling price of the offers for offices is below 850 Euro/sq.m. The real estate agents comment that the lack of buyers and investors in offices is due to the poor economics in the country which blocks the investment intentions of the business companies.

A slight interest in offices outside the capital Sofia is shown in two of the other major cities in the country – Plovdiv and Bourgas. There are a few modern office and business buildings there that deserve the attention. They have been built with the intention of accepting several outsourcing companies and this will eventually happen, but for now on there is no serious interest. According to the real estate agents, the office market will get more attention when the entire economics faces a stable development. Until that moment, the only chance for the office market in the country to develop is if some companies decide to move their offices from Sofia to the other cities in the country where they will find a cheap work force.

A brand new office and trade building in Sofia is under construction. It is located on the southern part of Tsarigradsko Schousse Blvd. and will offer large and modern offices, auto centers and auto services, warehouses, café and bistro, as well as parking lots. The offices will be located of the third floor of the business center and some of their tenants include Eurocar, Subaro Motors and BL Leasing. The plans for the office building are that it will be completed for a period of seven months or until the end of 2013.

The office area will be arranged to form a compounding three-level zone and will be f the highest class will all necessary facilities and extras required. The office building itself will be done with special facades and large window displays. The entire area of the offices will be 1100 sq.m. There will be also auto centers with 1250 sq.m of area, auto service center with 3208 sq.m. and nicely landscaped area with a lot of greenery with 1792 sq.m. The total built-up area of the office building is 9253 sq.m. The new office building will be a nice addition to that part of the Sofia, standing nicely among the rest of the office buildings and large trade complexes.

A brand new neighborhood will be formed in the south-eastern part of Sofia city, very close to the ring road and just behind IKEA furniture store. It will feature Sofia offices of various size, several residential buildings and a mall. One part of the new neighborhood is already completed, another part is going to open in one year time, while the entire complex will be ready by 2019. The project is known as the Sofia Ring development and is set in the area between the districts of Bistritsa and Simeonovo. Here are already located the IKEA store and is being constructed the Sofia Ring Mall, which is expected to open doors in March 2014. The new district will be serviced by new lines of the public transport, which will help not only those who want to shop, but also people who work in the offices in that part of Sofia.

The second phase of the project will focus on the construction of the business zone with offices, sports equipment, park with a lake and a hotel. The last phase of the project will cover the construction of apartments and houses. It is expected that as many as 5000 people will live and work in the new district.

The office market in Sofia is stable and has many new tenants. These are solid local and international companies who are looking for new offices. An year ago the main source of activity on the office market were the companies that were relocating, but since the beginning of 2013, an interest towards the offices in Sofia comes from brand new companies that are emerging on the market. Usually, these are outsourcing companies from the sphere of services like call centers, IT technologies and pharmaceutical companies. This marks a new moment for the Sofia office market and is a sign that it is recovering.

According to leading real estate companies, in the last four years the rented office premises in Sofia have increased with ten per cent per year. Currently, the office market in Sofia in general has reached a state of balance where the demand and the supply of office and business remises in Sofia have met. The most sought after locations are placed along Tsarigradsko Schousse Blvd. and more specifically in the area around The Mall where are set the Megapark and the ETC business centers projects. Serious interest is also shown in Serdica offices. The companies are different and work in various spheres of the business, but they are all looking for good location easy access, high quality of the construction and functional distribution of the premises.

In the last two years there is slight, but constant increase in the rental of offices in Sofia city. In year 2011 for example the percentage of the available office premises was 28 %, which marks a drop of 10 % if compared to the available office premises in 2012 which were 18 %. In other words, the available Sofia office premises are being rented on a stable and constant basis. This optimistic information is actually a really good news for both the business and the Bulgarian economy in general. The new office tenants are looking for bigger and better offices. This is valid both for the local companies and for the international companies that are setting foot in the country.

This is a solid tendency since the rental of offices in Sofia is going up with 10 % each year. Currently, the office market in Sofia city is quite stable. The demand and the supply of office premises has reached a balance. In 2012 the completed office buildings offered 140 000 sq.m, while in 2013 the prognosis are for 81 000 sq.m. Many of the of the new office buildings and business centers were constructed for the specific needs of the companies that will use them – a new trend that is expected to become a standard.

The business companies in Sofia are looking for better and more spacious office premises. Currently, the capital of Bulgaria ranks last in Eastern Europe as far as the rental levels of offices are concerned. This means that companies find it affordable to open offices in Sofia city. These are usually international companies that want to organize their business in a new way or companies that are willing to outsource certain activities from their portfolio to other destinations such as Sofia city where they can find many professionals and where the level of wages is below the one they are accustomed to pay at their home country. The companies that are most active on the market come from the business outsourcing sphere, the call centers, the software and the pharmaceutical companies, as well as some international trading companies.

The tendency for the office complexes of the highest class is for almost full rental of the offered business premises. The truth is that the international companies, as well as the large Bulgarian companies are choosing from a limited number of top office buildings in Sofia. Even the smaller companies are still looking to rent an office premise in the modern business centers of Sofia. This is the reason why the number of the available office premises in the buildings of class A is decreasing and there are more office premises available in the office buildings of the lower class B.

The outsourcing business processes companies and the IT companies working in the capital are the most active tenants on the Sofia rental market. Currently, they have taken one fourth of the total number of offices for rent in Sofia. The interest of these companies in towards modern office and business buildings of class A, which have parking zones and central location, that is serviced by the public transport and are easily accessible by car and on foot. Since the beginning of the year until the end of March the completed office premises reached total of 19 300 sq.m. Most of these office buildings were completed for the investors’ own needs. The rental premises in Sofi that have been rented for the first three months of the year reached 31 000 sq.m., which is a 23 % increase compared with the rented office premises in the previous three months.

The successful companies follow one basic tendency – they move to office buildings of a higher class, which have more facilities and extras and better location. That is why the number of the available offices in Sofia of class A is decreasing. The available offices in the business buildings of class A have dropped with almost 2 %. The available office premises in the ten best office centers in Sofia is just 17 %. The rental levels in these top office buildings vary from 9 to 12 Euro per sq.m.

The office market in Sofia is driven mainly by the international companies that have moved their business in the capital of Bulgaria. These companies are looking for high-quality office premises that are positioned in office and business centers of class A that are characterized with excellent characteristics, many facilities and good location that allows for an easy access. The top office buildings of the highest class in Sofia take not more than 20 % of the entire number of available office premises and their total sq.m. coverage is around 330 000 sq.m. However, these are the office premises that provoke the interest of the big companies and usually the 90 % of the office premises in the business buildings of class A are rented.

The new office centers that opened in 2012 are mainly concentrated in the eastern and southern areas of Sofia city, with the focus being set on Bulgaria Blvd. As we have pointed out in many of our previous articles, the office buildings that provoke the attention now are the office zone of Bulgaria Bvd. With its 30 000 sq.m. of rental premises, followed by Vrtigo Business Center with it 18 000 sq.m. of area. The zone along Bulgaria Blvd. is moder and easily accessible, close to the city center and near many facilities, which increases the interest of the companies that are looking to relocate or to settle their first office in Sofia. The prognosis in front of Sofia city office market is for a stable year ahead with 12 Euro per sq.m average price for the offices in the center of Sofia and 9 Euro/sq.m for the offices in the suburbs of the city.

The office market in Sofia city will be stirred next year with three new projects that will be completed and will enter their doors for new tenant companies. The three office buildings will add approximately 100 000 sq.m. more to the already existing office premises in the capital of Bulgaria. This new office area is above the annual percentage of the square meters of offices that were completed in the years before the crises, but at the same time is below the annual level of office demand in the period of the crises. In 2014 will be fully completed the administrative centers Capital Fort on Tsarigradsko Schousse Blvd, the Millennium Centre and the City Tower on Macedonia Square.

The supply of office space nowadays is approaching with slower steps if compared to the supply in the years before the crises, but still the number of offices provided is going up. According to the statistics, at the end of 2012 the office premises offered were 1.60 million sq.m, marking a 7 %year increase. The office premises that were completed were estimated to 108 000 sq.m., while the rented office premises for the same period were 85 000 sq.m. in total.

The main tenant on the office market remain the international companies, which are moving their offices on the territory of Bulgaria. In general these are companies from the IT sector and the pharmaceutical sector, which are looking for high-quality office premises in office buildings of class A that are easiy accessed via the public transport and feature parking zones. The real estate agents believe that the same parameters will form the office market search in 2013.

Sofia ranks third in the world as far as cheap offices are concerned. The average rental for an office in the center of Sofia was 14.75 Euro per sq.m a month in 2012. Lower rental levels of offices are available only in the town of Kito in Ecuador and in the city of Sandan in the South African Republic. The data was collected and analyzed by the consulting company “Cushman and Wakefield”. The lower rental levels of Sofia offices led to the decrease in their overall value. At the same time however the local and international business companies have a good choice of high-quality offices at reasonable and affordable prices. That fact made Sofia one of the preferred places for making business and investments in Eastern Europe. The country has attracted the interest of the companies in the outsourcing industry. This is so, as the country could offer excellent services and production and low expenses for rental, taxes and labor.

The only capitals that can rival Sofia in terms of affordable offices are the Riga with its 16 Euro/sq.m. and Tallin with its 17 Euro/sq.m. At the same time, the average rental price of the offices in Bucharest is 28 Euro/sq.m and 18 Euro/sq.m. in Belgrade. However, the cheap and good offices in Sofia are not the only thing that attracts the foreign companies. The country has highly qualified people, stable micro economy and political situation.