Category: Serviced Offices

A brand new multifunctional complex will open soon near the building of the Bulgarian National Television. The construction of San Stefano Plaza complex started in 2005 but was prolonged for various reasons. The project includes luxurious apartments, offices of the highest class, shops and garages. The construction stages of the complex were accompanied with various problems, issues by the previous owners of the site, financial difficulties and world crises. After several changes in the investors companies that stood behind the project for offices and residential units and a change in the ownership rights, currently the project on San Stefano Plaza complex is owned and arranged by the Swiss company Edelweiss, presented by Dr. Beat Schpeck.

At the end of 2012, the new owner of the project invested more than 9 million Euros in the capital of the company, a sum which was required for the construction of the complex. The sale and rental of offices, as well as of apartments and shops will start slightly before the project is completed. According to the prognoses, the new Sofia office complex and residential zone will get permission for usage in the middle of 2014.

The financial crises had its impact on the office market outside the capital of Bulgaria, Sofia. If we have to describe the offices market situation outside Sofia with one word only, this would be: frozen. The lack of interest from the business in the rest of the cities in the country led to a drop in the average sales levels of the offices. Nowadays, an office in a nice building that is not placed in Sofia city is below 850 Euro per square meter. According to the brokers from the real estate agencies, this is so because of the lack of companies and investors who are willing to buy or rent such office premises. Behind the bad results stays the poor economics of the country, which has no increase in the last few years and that prevents the business from making investments.

The cities that still evoke the interest of the companies when it comes to rental of offices and apartments are Plovdiv and Varna. These are the two biggest cities in the country after the capital Sofia. There are a few office buildings there, but the interest is not as it should be and the demand is not serious. A rumor goes, according to which certain outsourcing companies will enter the country but will settle in the cities of Varna and Plovdiv, rather than in Sofia. One big outsourcing company from German already moved its offices to Plovdiv. Even so, the investors who are heading towards Sofia are looking for rental premises of around 300 sq.m, while those in Varna for example are looking for much smaller offices around 50-60 sq.m. The real estate specialists say that the office market outside Sofia will improve once the entire economics in the country faces better times.

When a certain industry is in progress, this affects other spheres of businesses as well. This happened in Sofia, when the film industry brought here many new companies and workers. An interest had been shown in luxury houses for rent in the areas of Boyana and Dragalevtsi, close to the studios and in the offices nearby and along Bulgaria Blvd. that connects the two prestigious districts with the center of the capital Sofia. The interest of the foreign investors towards Bulgaria and especially towards Sofia is serious; however they are more focused on renting apartments and offices in Sofia rather than buying them. The foreign citizens who rent offices of the highest class and apartments in good areas are usually working for the big international companies. Ninety percent of the actual buyers of luxury houses, apartments and top offices however are local people and companies.

For the first three months of the year, the rental market of offices and apartments in Sofia is stable and has increased twice if compared with the same segment of the market last year. It seems that the film industry had a lot to do with that, since the movie companies were renting many luxurious properties for the TV episodes and movies they are filming in Bulgaria. These companies are usually looking for luxuriously furnished houses in Boyana district that had four or five bedrooms.

According to two German politicians from the conservative party, Romania is to be blamed for the delay of the accession of Romania and Bulgaria in the Schengen zone. The vice chairman of the European People Party Manfred Weber opposed his own government and the official position of the European Commission. He congratulated Bulgaria for the progress it had made and blamed Romania for the blocking of the membership of the two countries. He stated at a public event held in Brussels that the two countries are always coming as a package, which should not be so.

The European Commission has stated that Bulgaria and Romania are ready to enter into the Schengen zone. However, thanks to several of the member states their accession was postponed based on the Cooperation and Verification Mechanism. Even so, the European Commission finds this mechanism inappropriate in order to judge the readiness of Bulgaria and Romania to enter the border free Schengen zone.

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.