Category: Serviced Offices

The number of the completed Sofia Offices for year 2014 has significantly decreased compared to the year before that. The share of the vacant office premises has fallen to 15 %, according to a report issued by MBL CBRE. In 2014 only 36 000 sq.m of office premises in Sofia have received permissions for usage. This is almost half the number of the completed office sq.m for 2013.

The decline was a result from the several years of crisis, when the demand for offices for rent has seriously reduced and the number of investments in the segment has been low. In the past two years however, there is a steady growth in demand for prime offices in Sofia. That is so, as many companies are now either expanding or entering the Sofia office market. These companies come mainly from the IT industry and the outsourcing sector.

According to the analysis of MBL CBRE, the office market in Sofia resulted in 88 000 sq.m of rented new office premises. The share of the vacant offices in 2014 has dropped with 33 000 sq.m and now they are approximately 250 000 sq.m. In other words, at the end of 2014, the available offices of class A and B in the capital Sofia were 15.4%.

Currently the most sought after are the business buildings in Sofia that come with open floor plan, high class equipment, quality construction and good location outside the central city areas. The driving force of the office market continues to be the large companies from the IT and the outsourcing sector. The rental levels of the Sofia offices from class A vary from 10.5 to 13.5 Euro per sq.m.

Those companies that are looking for offices in Sofia are now more interested in the offices that are outside the city center. In fact, the real estate agents are talking about migration from the center of Sofia city to the new office buildings in the districts near the ring road of the Bulgarian capital. According to the experts that is a tendency in the Sofia office market that has started in 2014 and is expected to continue in 2015. It seems that the outsourcing companies that are moving to Sofia plan to stay away from the center noise and busy traffic, the expensive parking in the blue and green zones, etc.

Several office buildings in Sofia are planned for completion soon, all located outside the city center. The office premises that are available there are offered at 12 Euro/sq.m. These are offices of the highest class A, characterized by comfort, convenience and numerous amenities and extras. The main companies that are looking for such premises are coming from the IT and the outsourcing industries. These companies are interested in the Sofia office centers Q-center, Imperia Online, Infinity Towers, Mega Park, Serdika Offices, etc. The rental levels that are valid are around 12 Euro/sq.m.

The real estate agents have noticed an increased interest towards the Sofia office premises located near Sofia International Airport. The number of companies that chose to rent offices in that location is growing – back in year 2013 were rented 101 000 sq.m of office premises there, followed by 112 000 sq.m of Sofia offices rented in 2014. The interest shown is for high class Sofia offices, but also for industrial and trade premises.

Due to the lack of new office centers in process of construction in the recent years, the number of the available offices near Sofia Airport is quite reduced. Currently the available offices of the highest class in Sofia are only 4 %, based on the ten most sought after business centers of the city. The rental levels in these business centers are around 12 Euro/sq.m. Such are the rental prices of the office premises in Business Center Europe, as well as in the Business Center MegaPark and in the European Trace Center along “Tsarigradsko Schousse” Blvd. near the trade zone The Mall.

The companies that show interest towards the office premises near Sofia Airport are coming from all over Europe and the United States. These companies are operating in the sphere of the financial services including banks, pension funds, insurance companies, etc. The area around Sofia Airport is also suitable for warehouses and logistic bases, which is suitable for companies that require such premises plus offices.

The companies that are trying to relocate or outsource their business to Sofia and work in the service and support sphere noticed a lack of office premises that are suitable for call centers. According to the real estate experts there are not many suitable office buildings for the companies that are willing to outsource their business. The real estate companies expect the interest towards Bulgaria and Sofia in particular as an outsourcing destination to grow in 2015. This means that there will be a great demand for high-quality office premises of class A with all facilities needed. The companies are expected to look for larger offices, positioned in good locations with easy access from all parts of the city. That is so, as the nice and comfortable offices are part of the general offer that managers get when recruited for the job.

Currently, the capital Sofia has available premises of the highest class A in ten of the projects amounts to only 7.5 %. The real estate agents believe that some 100 000 sq.m of office premises are to be offered on the market in 2015, in case the office building projects are done in time. Most of the companies in the outsourcing sphere are not buying but just renting the office premises in Sofia that they need. That is why the rental levels in the capital are stable and are around 12 Euro/sq.m. for the office of the highest class A and 8 Euro/sq.m for the offices of class B.

The real estate agents have recently stated that the rental levels of the Sofia Offices are among the lowest in the European Union. At the same time, the number of the available luxurious offices is strongly reduced. The main demand for offices of the highest class A in Sofia comes from the outsourcing companies. That is so as almost all prime office buildings in Sofia are almost 100 % occupied.

Since the beginning of 2015 there is almost no offices available in business buildings of class A, placed in good locations. The international companies are willing to relocate to Sofia city to make business thanks to many reasons. Among these reasons are the low costs for offices and the highly-qualified professionals that can work in the IT and in the outsourcing sphere.

In the entire European Union Bulgaria seems to be the most affordable office destination. That is so as the available offices of class A in Sofia could be rented between 13-15 Euro/sq.m. In case the demand for such offices increases, that will lead to increase in the rental levels, which however will not be significant. Currently, the number of the available high-quality office premises in Sofia is not sufficient for all the international companies that are willing to relocate their business to Bulgaria.

There is a serious demand for offices in Sofia for several months already. The investments made in business centers have gone up with more than 50 % and that stirred the search for suitable plots for construction of office buildings. For 2014 the investments made in business premises has increased with 115 million Euros, which marked a serious demand and led to an increase in the rental levels of the top class office buildings. Yet, the interest shown is not towards all offices, but towards the high class offices that answer all requirements of the international business companies.

The increased demand for new Sofia office premises is based on the fact that only 4 % of the available office premises in Sofia are of the highest class A. This Sofia offices demand is also based on the numerous international companies on the market that expand and are thus looking for larger office premises in Sofia.

Currently Bulgaria ranks at 14th place in the world and 3rd in Europe in search of office premises. The global tendencies show that the foreign investors are testing the Bulgarian market by doing online sales and then they make investments in offices, located in Sofia, Plovdiv and Varna. The main companies that are expected to make investments in offices in Sofia come from the outsourcing sphere, the trade with electronics, the call centers, the pharmaceutical companies.

The prognosis made for the Sofia Office Market in 2015 are associated with recovery of the demand for offices of class A and better macro-economic situation. The main interest will be shown by the companies in the IT, Technologies, Outsourcing and Bank spheres. That interest towards high-quality offices will be concentrated in Sofia, yet according to the prognoses of the real estate agents, there will be further an interest towards the high class office premises in the other large cities in the country.

The brokers are expecting a very strong year for the office market in Sofia and in the cities of Plovdiv, Varna and Bourgas, since Bulgaria was ranked third in Europe in terms of attractiveness for the outsourcing of businesses. The main office destinations in Sofia include Business Center Sofia, Megapark, European Trade Center, the office building of Bulgaria Mall. The statistics for the ten most sought after prime office buildings in Sofia shows that the average percentage of vacant space in them is only 4.25%.

In 2014 the percentage of the rented offices in Sofia has increased and marked a maximum increase in the last two years. The main reason behind that are the several important international companies that stated their desire to outsource their business, thanks to which the number of the available office premises in Sofia seriously decreased.

In 2014 there were not many investments in office buildings and the search for such premises made many construction companies reconsider their plans. That is so as the earnings expectations are stable and reach 9.25 % for the premium office centers.

Several large industries are showing serious interest in the rental of high class offices in Sofia, mainly coming from the outsourcing, the IT and the pharmaceutical sphere. Companies from the financial and from the energy sector are also showing interest in such business centers in Sofia. Most of the new office projects from the class A in Sofia are to be found in the region around the airport and along Bulgaria Blvd. Interesting to be mentioned is the reconstruction of Pliska Hotel on Tsarigradsko Schousse Blvd., which is to become a central office of a local bank. The rental prices of the offices of the highest class A are stable and reach 12.5 Euro/sq.m for the central business regions. In the rest of the Sofia office destinations the rental prices per month vary between 10 and 12 Euro/sq.m.

The constructions companies that are working on office projects in Sofia are trying to apply modern techniques and technology aiming to create comfortable and contemporary office buildings of the highest possible class. These office premises in Sofia are believed to provoke the attention of the international companies that are willing to relocate to Bulgaria and outsource their business activities in the country’s capital city.

The architects and engineers from the leading construction companies in Sofia try to accept each new office building as a mini ecosystem, since a great deal of the people there will spend at least 50 % and even more of their time in that working environment. The architects of Sofia business centers today are trying to present projects for office buildings with pleasant architecture, careful choice of the completion materials and precise implementation of each detail.

The contemporary situation on the Sofia office market requires the integration of good and functional layouts, done quickly but carefully, providing quality and compliance with all the modern requirements for efficiency. The integration of so many aspects in the construction of office buildings in Sofia is challenging as it features special project and design, choice of the right materials to be used and ideas and appliance of the latest technologies. The idea behind all that is for all the important elements to be combined in the construction of a modern office building of the highest class A, which will facilitate creativity and will stimulate the good mood among employees.

Among the main factors that are of greatest importance for the good functioning of each office building in Sofia and the issue of the highest class ecology certificate are the ones mentioned below:
• Spacious and bright working environment, served by air conditioners
• Excellent infrastructure, parking zone, access to services and recreation zones, served by the local transportation system
• Low exploitation costs with minimal energy use
• Fast and reliable communications
• Representative entrance and reception area
• Individual working places.

Among the other important elements of the successful Sofia office building is the appropriate form that has to be pure and clean, allowing for flexibility and efficiency, as well as for easy distribution of the working area.