In a recent visit in Bulgaria the UK Prime Minister David Cameron has visited the country’s border with Turkey, which happens to be an external border of the European Union. David Cameron urged the other nations to follow the example of Bulgaria and said that the countries from the European Union are facing a flow of migrants and should make efforts to control their borders.
According to Cameron, it is very important for Europe to have strong external borders by sea, air and land like the one Bulgaria has with Turkey. In 2015 around 27 000 migrants came through the 150 mile border between Turkey and Bulgaria, which is still not part of the travel free and border free Schengen but acts as an external border of the European Union.
The countries from the European Union are facing an increasing influx of migrants and they should learn from the Bulgarian efforts to keep the external controls, said the UK Prime Minister David Cameron at the border with Turkey. The states of the European Union have agreed to take emergency action in order to shore up the external borders of the union with stricter control.
The high-quality office premises in Sofia have been running out for quite some time and as a result, the rental prices started increasing reaching pre-crises levels. This means that the prices of the class A office premises in Sofia are heading towards the levels 14-16 Euro/sq.m. Due to the lack of supply, many companies are now ready to get offices in off-plan business centers and wait for them to be completed.
Throughout 2015, the office demand in Sofia has increased by 15-20 % with almost no supply at all in the center. According to the data, the number of the available offices in Sofia in the middle of 2015 has dropped to 25 % and to 2 % in the most sought after places in the capital of Bulgaria. Among the most desired business zones in Sofia are placed around the boulevards “Tsarigradsko Shosse”, “Cherni Vrah” and “Dragan Tsankov”.
The recently completed business center Capital Fort, which is also the tallest building in the country, is renting offices fast. These companies are mainly in the high technologies and the IT sectors, as well as the outsourcing. Under construction is the Trade Center Europe near Sofia Airport, where 50 % of the office premises are already rented out. The office market in Sofia is being driven by large companies looking for more spacious office premises of a class A quality.
Schengen is a dream about Europe living with no borders and no passport controls. During the Justice and Home Affairs Council in 9th October 2015, the Minister of Interior and the Deputy Prime Minister for Coalition Policy and Public Administration Rumyana Bachvarova stated that Bulgaria becoming a member of the visa free Schengen Area is a matter of security for the entire European Union.
During the sessions of the EU Justice and Home Affairs Council, the Luxembourgish Minister of Foreign and European Affairs Jean Asselborn stated that he wants to thank Bulgaria for all the efforts made in the protection of the external border of the European Union, even if not being a member state of the Schengen zone. The Minister of Interior of Bulgaria stated that today Bulgaria’s joining the Schengen Area is a matter of security of the entire EU. She further stated that the external border management of Bulgaria was directly related to the most recent challenges to the EU connected with migration processes. She stated that this requires coordinated, joint, and collective response on the part of all EU member states and that Bulgarian cannot adequately contribute to joint efforts in this direction as it is still not part of the Schengen Area.
If Bulgaria is a member state of the Schengen Area, the county will be in the position to use the full set of instruments of Schengen legislation which will lead to more comprehensive prevention – checks on the Schengen Area visas, proper usage of the Schengen Information System, etc. Since joining the EU Bulgaria has managed to ensure a serious protection of the EU borders, making the needed efforts despite the limited access to such systems and the limited resources of the country.
The real estate agents have recently stated that around 250 000 sq.m of office premises are to enter the Sofia market by 2017. Approximately one third of these were planned to be opened until the end of this year. Serious activity is found at the projects for Sofia office buildings and many of them are under construction. The first six months of 2015 were characterized by very low levels of class A office availability in Sofia – less than 4 %.
The serious activity on the office market in Sofia is due to the great number of outsourcing companies that are moving their business to the capital of Bulgaria. Most of them are international companies working in the sphere of outsourcing and in the IT sector. These companies are paying between 10.5 and 12.5 Eur/sq.m for Sofia offices of class A and another 2 to 3 Euro/sq.m for the maintenance of these offices. The expectation of the real estate agents is for these levels to remain the same at the beginning of 2016.
Just before the EU summit in October, the Deputy Prime Minister of Bulgaria Meglena Kuneva raised the question about Bulgaria and its membership in the Schengen area. She stated that the fact that Bulgaria has not joined Schengen several years ago along with its entering the European Union and today that is not only a problem for the country, but also a problem of the European Union. According to the Deputy Prime Minister, it is of high importance for Bulgaria to receive a date, no matter when the accession will happen, as it is the horizon that matters.
Bulgaria not being part of the Schengen security zone of the European Union puts the country in the position of no man’s land. This position makes it impossible for the country to take care of its security and for the European security. Bulgaria does not know whether to contribute to the Schengen improvement as it does not know when it will join, and yet the country cannot belong to a different alliance, as it has already committed to this one.
Every 6 out of 10 companies that are operating on the territory of Sofia are looking for office premises larger than 500 sq.m. The companies working in Bulgaria that are most active in the search process are the coming from the IT sphere. Often, some of the outsourcing companies have two or three offices and they take steps towards setting all their employees under one roof for better expenses optimization and more productive communication. The other companies that show interest in the offices of class A in Sofia are new to the local market and usually they start with up to 50 employees, to increase their number within an year and start looking for larger offices in Sofia.
Sofia office market can provide available offices of class A with area of up to 500 sq.m, yet there are not many offices of the same quality in Sofia above 1000 sq.m in size. Several large office projects are about to be released in Sofia next year, which is good for the companies and the business. The rental levels of the Sofia offices of class A run between 10.5 and 12.5 Euro/sq.m. and 2-3 Euro/sq.m for the maintenance fee.
In early October the President of the European Council Donald Tusk stated that Bulgaria is may be the best example of how the borders should be protected. He further stated that Bulgaria is ready to become part of the Schengen zone. Bulgaria is bordering Greece and Turkey, as well as Macedonia, and these countries are under great migratory pressure. Yet, Bulgaria still manages to protect its borders well.
The President of the European Council further stated that the borders of Bulgaria are also borders of the European Union. That is why, in his words, the country is ready to become part of the travel free Schengen zone. In fact, many politicians and people from abroad feel that Bulgaria entering the passport and visa free Schengen area should have happened long time ago.
The country still needs to make sure that all judicial reforms are mad and the fight against the organized crime and the corruption is still strong. Along with Romania, Bulgaria has hoped to enter the Schengen area in March 2011, yet this was postponed by several members of the alliance due to concerns associated with the security situation and corruption levels. The two Balkan states are still waiting.
Throughout 2015, the companies that have decided to make business in Bulgaria have shown interest towards larger office premises situated in office buildings of class A. This comes as a result from the good expectations of the companies in connection with the future situation of the economics in Bulgaria, the region and the European Union in general.
The companies looking for offices in Sofia are focused on office premises of 500 sq.m (or more) where some of the outsourcing companies are looking for Sofia offices of 1000 sq.m. The companies that are on demand of such large office premises operate in the IT and in the outsourcing sector. They are usually relocating since their business is growing. Yet, the office market in Bulgaria is also attracting new companies that are planning to open their first office in Sofia. There is a serious interest towards unification and getting all office branches of one company under one roof aiming optimization of the expenses and better communication in the team. Approximately 80 % of all requirements for offices in Sofia come from companies that plan to start working with up to 50 people as staff.
At first Romania and now Bulgaria are slowly abandoning their hope to receive an invitation to join the passport-free travel zone of Schengen area. The admission of the two countries is on hold for many years now, though both states have proved their technical and border readiness to become part of the Schengen zone. The European Council sessions have put on hold all discussions concerning the admission of Romania and Bulgaria into the Schengen area and the expansion of the Schengen area in general.
Romania and Bulgaria have hoped to join the borderless zone since 2010. Through the years several nations have opposed the joining of Bulgaria and Romania, mainly Holland, Germany and Finland. Their reasons for that were concerned with the serious corruption issues that the two countries were believed to have. Yet, both Romania and Bulgaria are meeting the technical criteria for entering Schengen and for controlling their borders, including the borders with the countries that are not part of the European Union.
According to the Romanian political analyst Cristian Inteanu, the immigrants’ crises have caused serious issues and will influence the perpective of EU states over the future extension of the Schengen space. As the experts said, Romania and Bulgaria will be allowed to the Schengen area, if that will strengthen the eastern border of the European Union.
The interest towards the offices for rent in Sofia has been strong throughout 2015 and the figures show that the companies show a demand for more than 100 000 sq.m. of office premises in Sofia and in the country in general. During the first half of 2015 the interest towards the offices for rent in Sofia and in Bulgaria has gone up with 40 % more compared to the same period in 2014 when the interest shown was towards 70 000 sq.m of modern office premises.
More than 60 % of the active companies on the market come from the IT and the outsourcing sector and this percentage is going up. That tendency in the rental market of Sofia is not new, yet in 2015 the contracts sign are much serious. That is so as the IT and the outsourcing companies are hiring more employees and need much more space. Back in 2014 the companies have shown interest in Sofia offices of approximately 1000-1400 sq.m, while in 2015 the interest was in class A offices in Sofia with area between 3000 and 5000 sq.m.
The companies that are most active on the Sofia office market are the new one which experiences increase in their business. The demand is for offices of the highest class with excellent location and large floor premises above 1000 sq.m, easy transport connections and easy access to the metro stations. The interest of the companies and the limited supply of such offices led to shortage of this kind of offices. And that led to new projects and start of the construction of new 66 000 sq.m of office premises in Sofia. That will result in a balance between the supply and the demand of offices and will keep the class A rental levels in Sofia reached between 10.5 – 12.5 Euro/sq.m.
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