Along with the situation concerning the migrant crisis, Bulgaria has strengthened its demand for a membership in the passport free travel zone of Schengen. The aim of Bulgaria to become part of the Schengen area has been blocked by several member states led by the Netherlands on the basis of lack of progress in the fight against the organized crime and the corruption. Now with the refuge crisis, the position of the Deputy PM in charge of European affairs Meglena Kuneva is that this crisis will be facilitated to a great extent by the joining of Bulgaria and Romania to the Schengen area.
If the Romania and Bulgaria enter the Schengen zone, the information exchange between the member states will be easier and that will improve the chance of the countries to deal with the risks that are provoked by the refugee flow and the migration. The authorities in charge in Bulgaria think that now is the time for the Schengen zone to take the proper decisions, which will demonstrate unity between all European states and one unified position.
While that has been happening, Germany temporarily reinstated the border control at its border with Austria due to the influx of refugees. Two weeks ago Austria opened its doors to refugees, which provoked strong reactions of approval all over the world. Yet, the Vice-Chancellor and Minister of Economy Sigmar Gabriel stated that the lack of European action was forcing Germany to limit the number of potential refugees.
Bulgarian Deputy Prime Minister for European Policies Coordination and Institutional Affairs Meglena Kuneva stated that Bulgaria had been meeting the Schengen accession requirement for seven years now and it was time to become an equal member. Meglena Kuneva also gave comments on the forthcoming Bulgarian EU Presidency in 2018. According to her the first stage of the preparatory works was already finalized.
In 2015 only one office building in Sofia opened doors and that is the office project Capital Fort on Tsarigradsko Schousse Blvd. With the opening of the new business center, the capital Sofia will get 42 000 sq.m. of office premises to be used by the outsourcing companies. Currently under construction is also the second phase of the Infinity Tower Building next to Bulgaria Mall, placed on Bulgaria Blvd. This new office premise is to be completed in 2016. At the same time several other projects are to be completed. These projects are not new but they have been postponed until now, waiting for better time to come. Among them is the City Tower Building on Macedonia Square, which is to be completed in 2017. The same is valid for the Millennium Center close to the National Palace of Culture. This building will feature residential premises, trade zones and offices.
The real estate agents believe that the total area of the new office buildings in Sofia to be released on the market is 72 000 sq.m, which is the amount of office premises that is being rented by the outsourcing companies for a period of 6 months approximately. This means that there is a serious demand for the construction of many other such office projects in Sofia. Currently, the rental levels of the Sofia office premises are stable and the offices are being rented for 10-13 Euro/sq.m, with no increase planned for in the next two years. Besides the rent however, the companies that are renting offices in Sofia also need to cover various maintenance taxes and other expenses.
Several Ministers of Home Affairs and Justice gathered a week ago for an emergency meeting, during which they were to agree upon the revised proposal of the European Commission concerning the resettlement of 160 thousand refugees currently being in Greece, Italy and Hungary. In addition to the temporary solution, the European Council is also offering a permanent mandatory relocation mechanism based on the number of filed asylum applications and the number of illegal entries into a country in question, both for a period of six months.
Bulgaria, which is still not a member of the Schengen Zone but is a member of the European Union, is against the permanent mechanism. According to the Bulgarian authorities, the crisis development reveals that a simple relocation will not be enough as it will lead to secondary relocations and will increase the tension among the refugees. Besides, the member states cannot stand against the wishes of the refugees that have certain destination. Bulgaria is for a financially secured and well working integration policy, accepted by all member states of the European Union. Bulgaria is open to accept more refugees, but demands the preferences of the refugees to be taken into consideration.
In the last few years the profile of the companies that are active on Sofia office market has changed. Currently, the companies that show interest to outsource part of their business and even the entire business are mainly IT companies and companies from the outsourcing industry, and currently – the companies for easy loans which need not only front offices but also large back office premises. These companies now have higher and higher requirements for the office premise in Sofia they want to rent or to buy. The requirements of these companies are associated with the improved quality of the construction, with better infrastructure and onsite services offered. These companies are also looking for better property management.
In addition to all those criteria, that the Sofia office building needs to cover, it further needs to have pleasant façade and to be placed in an area with good infrastructure with excellent transport connections. With all that in mind, it should be noted that the number of the available office premises in Sofia and in the other large cities in the country are not many in number. It is expected their number to go down further by the end of the year. That is so, as the demand for new office buildings is serious, while the existing business buildings in Sofia are already 80 to 90 % full.
Didier Reynders, the Deputy Prime Minister and Minister of Foreign Affairs of the Kingdom of Belgium, arrived to Bulgaria on an official 2-day visit in early September upon an invitation from Daniel Mitov, the Bulgarian Minster of Foreign Affairs. During the official talks, the two ministers discussed the two-way cooperation between Bulgaria and Belgium, as well as some major initiatives of the European Union.
The Deputy Prime Minister and Minister of Foreign Affairs of the Kingdom of Belgium stated that Belgium will back Bulgaria in the country’s efforts to access Schengen. Yet, Didier Reynders stated that Bulgaria has certain issues to solve first that concern the Parliament, the anti-corruption legislation and some other reforms. According to the Deputy Prime Minister, Bulgaria should have progress in the fight against corruption, and its efforts to protect its borders and to guarantee security of the residents.
Currently, Belgium takes a second place in investments in Bulgaria. This was stated by the Minister of Foreign Affairs of Bulgaria Daniel Mitov. This is so, as the total volume of Belgium investments surpasses EUR 1 billion. Most of the investments are made in the light and in the heavy industry, etc. There is also a growth of tourists coming from Belgium with more than 30 %.
The real estate investors are looking for clear requirements concerning the in office buildings in Sofia. At the same time the companies that are looking to outsource their business to the capital of Bulgaria or to relocate their office in Sofia to a bigger one are paying greater attention to the facility management and the technical standards. There is a great interest towards the office projects in Sofia that are certified according to the international standards like BREEAM, LEED, etc.
Currently in the city of Sofia the side that is setting the rules is the one of the tenants. The companies that are looking for office premises in Sofia show interest in high quality office buildings which are energy-efficient built with modern materials and according to the latest technologies. The requirements are becoming more and more and that means better working environment for the employees.
Besides being efficient, the modern offices in Sofia should also have a good structure that allows for the premises to be rented by different companies working in various spheres. The companies that are interested in these offices of class AA in Sofia are mainly companies from the IT and the outsourcing sphere, which are mobile and open to changes. These companies are also interested in the way the office building looks like, in the design and the façade of the building. The organization of the common area is also of great importance.
Several days ago the European Commission stated that Romania and Bulgaria meet the criteria to join the travel free zone of Schengen and that the two countries need political decision in order to get into the passport free zone. It is not up to the executive body of the European Commission to take that decision. The decision about the entry of Romania and Bulgaria into the Schengen zone should be taken by the Council of the European Union.
The countries in the Schengen zone, including the two states that want to become members – Romania and Bulgaria, should react wise to the current crisis with the migrants and should give a unified answer. There should be a mandatory distribution of the refugees among all member states in the European Union. This will allow the Union to keep its Schengen area as it is – free of checks on the border. Until now the Schengen zone has been accepted as one of the success projects of the European Union.
Yet, the situation with the migrants is getting worse. Last Wednesday Denmark has temporarily suspended its rail connection with Germany due to the influx of migrants. The Danish police also clods a motorway set between the two countries after a large group of migrants started walking north of Sweden. All countries in the Schengen zone, including the want to be members Bulgaria and Romania should be careful with the migrant’s situation.
The intensive increase in the outsourcing industry in Bulgaria has led to a great interest in the office premises in Sofia. The main demand is for offices of class A, located close to “Tsarigradsko Schousse” Blvd. and the Sofia Airport, the Business Center Sofia and “Bulgaria” Blvd. The available office premises of class A in Sofia for 2014 have decreased in half compared to the year before that. The serious demand for offices and the lack of many projects for business centers have led to that situation.
The main companies that are active on the market of offices are coming from the outsourcing sphere. Almost all of them expect increase in their income for 2015 and around 60 % plan to increase the number of their staff with 100 to 200 new employees. Approximately 40 % of the companies are planning to change their office and move to a larger one. The main factors for choosing a new office premise in Sofia are the location, the expenses, and the availability of parking area. There is strong interest towards several new office projects in Sofia, namely – Capital Fort, Kambanite Business Center, Sofia Airport Center.
In the end of July the head of the Consular Relations Directorate at Bulgaria's Foreign Ministry Rakovski Lashev said on a press conference that the Bulgarian consulates have improved the readiness of Bulgaria to enter the passport free Schengen zone by meeting all requirements concerning the no visa area. In fact, the consulates in Bulgaria are not only maintaining but also improving the level of readiness of their employees and the equipment they have. Bulgaria has been named ready to join Schengen in 2011 by the European Parliament and the European Union Council.
At the same time, the Bulgarian President stated that Bulgaria wants to be a member of the passport-free travel area of Schengen by 2018 and that he hopes that the country will soon enter the first stage of accession at the Schengen zone – the opening of the air and the sea borders. Romania and Bulgaria are members of the European Union since 2007 and had hopes to join the Schengen area in March 2011. This however did not happen as some members of Schengen have expressed reluctance and concerns over the security and corruption in the two countries.
The recovery of the Sofia office market in 2014 and in the first half of 2015 is easy to see. The percentage of the rented office premises in Sofia in 2014 has gone up with 42% compared to the year before that. This means that in 2014 the number of the rented offices has been around 154 000 sq.m. At the same time the percentage of the available offices in Sofia city has dropped to 26% in 2014. The main interest is towards the Sofia offices of class A, which are in the focus of attention of the outsourcing and IT companies, which are looking to relocate their business to Bulgaria. The average rental levels are around 10 and 13 Euro/sq.m. with a tendency to go up.
At the same time the office market in Sofia is coming with new projects for business centers including Capital Fort Business Center, the office center next to Bulgaria Mall, Trade Center Europe, Sofia Airport Center, etc. The interest of the outsourcing companies is provoked by the offices of class A, the young professionals in the country with knowledge of foreign languages, etc.
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