Category: blog

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.