Category: Serviced Offices

For several years already, the outsourcing is the main engine that drives the office market in Sofia and also in Bulgaria. The country is preferred by the international outsourcing companies for several main reasons: Bulgaria has the lowest corporate tax in the European Union; excellent internet connection; well-educated professionals who speak at least one foreign language and last, but not least – high quality office premises.

The average size of the offices that are rented in Sofia is 1600 sq.m and the share of the outsourcing companies in the country has reached 65% of the entire office market. The available office premises of high class in Sofia in the end of 2014 were only 6%. The outsourcing companies on the Sofia market are looking for larger premises, as they usually employ more people. These companies are in search only of offices class A with excellent location and infrastructure. This is so, as the office location, the atmosphere and the conditions are part of what these companies offer to their employees.

The main requirements towards the offices in Sofia include large and bright premises with high ceilings, open-space layout, excellent quality of the rental service, parking area, shops and restaurants nearby, public transport, rental levels between 10-12 Euro/sq.m for Sofia offices of class A outside the downtown city area.

The quality office projects in Sofia, characterized with good locations have above 95 % occupancy. At the same time the interest of the foreign companies into outsourcing their business to Bulgaria is quite serious. The local investors show interest in the construction of new office buildings, yet the local banks are still quite cautious. Foreign investors are also showing signs that they wish to invest in new office projects in Sofia and may be in several of the other large cities in Bulgaria. The most sought after office locations in Sofia are already established. The general rule is the good infrastructure, which means proximity to public transport and especially the metro stations.

According to leading real estate companies, the office market in Sofia is stable and is developing well. The quality office buildings with good location are already occupied, so there is room for other new office projects in Sofia. The interest towards the old Sofia office location is strong. There is also serious interest towards the area around the airport and Hladilnika District, near Sofia Paradise Center. The most active companies on Sofia office market are coming from the IT and the outsourcing sector.

In the fall of 2014 the real estate agents registered increased interest by foreign investors towards the Sofia Offices. The interest was mainly from solid international companies which are eager to relocate part of their business activities in Sofia, as well as from companies which have already outsourced their business in the capital of Bulgaria but are expanding and thus in search of more and larger offices. Naturally, these companies are looking for offices of the highest segment – this means offices with top location, fantastic amenities and excellent facilities, plus great location with easy access for both clients of the companies and for the employees.

According to the real estate agents the number of the available offices of class A will decrease significantly as the investments made for the construction of new quality office buildings in Sofia are very limited. This is so as the banks are cautious, which is not bad since the growth will be smoother. The only larger office project now in construction in Sofia is a business building in the center of Drujba District, near the airport. These Sofia offices are to be completed in 2015 and are suitable for companies looking for an office premise and a storage area in one place. The new business center will offer 4000 sq.m of storage area which will be connected to the offices, shops, showrooms in the main business building with total area of 3000 sq.m. The new project will further have an underground garage with 70 parking lots.

Bulgaria and especially its capital Sofia is among the most preferred locations for outsourcing the business in Europe. The country is also the only country in Europe which is part of the world ranking of the most attractive destinations for outsourcing, according to a survey covering 51 countries and made by the analyst company AT Kearney. Currently Bulgaria occupies ninth place in the prestigious index, climbing eight positions compared to 2011. This means that for a second time in seven years, Sofia office market enters the top ten of the most attractive destinations in the world for the development of the outsourcing sector.

The Chairman of the Bulgarian Outsourcing Association Stefan Bumov stated that this is a great acknowledgment for the efforts made, the maturity reached by the office market in Sofia and for its potential. Currently Central Europe offers a mature industry and a lot of experienced employees. The ranking made by the analyst company AT Kearney was based on 39 indicators in three main categories: business environment, financial attractiveness, availability and skills of human resources. This index is greatly used by the outsourcing companies when making a decision where to open their centers for business processes and IT back-office functions.

Many clients of the real estate agencies in Sofia are now looking to hire offices in Sofia for short periods of time that could be one day, a week or several months. In this way the companies are trying to reduce their costs while finding their way and niche on the Sofia market. Very often, the short-term rental of Sofia offices is used by foreign companies which want to make a special campaign or to explore the market on Sofia or to find employees for the time they plan to move and open a large office in Sofia.

The outsourcing companies that are interested in investment in Sofia are in search of modern offices with areas above 2000 sq.m., positioned in specialized buildings with good location. These are companies from the outsourcing industry, IT and software companies. At the same time many local companies with small business are in search of smaller offices but again – placed in prestigious office buildings. Some of the outsourcing companies are looking to hire first-class offices in Sofia and in the main cities of Bulgaria and are willing to wait for the realization of new projects in 2016 and 2017.

According to the expectations of all real estate agents in Bulgaria, as well as those from the Royal Institution of Chartered Surveyors, the renal levels of the Sofia offices are to go up during the next year. The increase will cover the areas of office, trade and industrial premises for all countries in Central and Eastern Europe, however in Bulgaria there will be a string interest mainly in the office premises. According to the prognoses a lot of companies from the outsourcing sphere of business will head towards Sofia city looking for good offices and those who are already on the market will search for larger and even more modern offices than the ones they are renting now.

The real estate agents working in the office sector in Sofia confirm an increased interest towards the high-end offices of the so called class A. The outsourcing companies, as well as the local companies which are expanding are in search of modern office premises in Sofia with good access from all points of the city, proximity to the public transport system, including the metro stations and easy reach to nice dining zones for more convenience of the employees. According to the Royal Institution of Chartered Surveyors, the investment market in Sofia is stable and there is interest shown by foreign investors.

The interest shown towards the Sofia offices with strategic location is quite serious. Local freelancers, small companies, big international companies that want to outsource their business to Sofia are all looking for nice offices in Sofia. These offices in Sofia need to have strategic location, so that they can attract the interest of the potential clients. All these groups of companies looking for offices in Sofia are interested in long-term rental and insist on having good city location.

The rental levels of luxurious offices in Sofia have gone up with 8 % in the past 12 months. Since the number of good offices in Sofia is decreasing, there is a new tendency that the real estate agents are pointing out. Some of the buildings that were panned to be malls and trading zines are planned to be turned into offices of the highest class. The brokers say that this is a wise step and that these offices will correspond to the needs and desires of the outsourcing companies, as well as the new local companies.

Sofia is the destination with the more serious annual growth in the rental of luxurious office premises on the main streets and best districts of the city. During the first six months of the year there was an almost 30 % increase in the rental levels of the capital when luxurious offices are concerned. The other Central and Eastern European capitals that provoked the interest of the outsourcing companies include Riga, Belgrade and Moscow.

The companies which are interested in the rental of luxurious offices in Sofia are outsourcing companies which work in the sphere of pharmacy, IT services and consultancy. All these companies are looking for comfortable and modern offices in Sofia with fast access and coverage from the public transport. The office premises in Sofia that the companies are looking for need to be large in terms of space, modern in terms of interior, as well as well-organized, with a nice dining area and a parking around. The outsourcing companies who are looking for luxurious offices in Sofia are eager to pay up to 13 Euro/sq.m in order to get the office they need and deserve.

The outsourcing companies which are renting offices in Sofia come from several main sectors, namely IT and telecommunications, production, financial and special services. All these outsourcing companies plan expanding of their business in Sofia and are often looking for larger offices in the capital. So, what are the outsourcing companies searching for in terms of offices? According to the real estate agents all companies that make plans to open businesses in Sofia are looking towards modern office premises with good location, allowing for easy access. The outsourcing companies are also looking for brighter office premises in Sofia with high quality ventilation and air-conditioning system.

The outsourcing companies which are searching for new offices in Sofia require high quality of the services, systems and completion works. They are also insisting on the recreation and dining zones, as well as on the professional property management of the offices in Sofia they are renting. Currently, the rental prices vary between 10.5 and 13 Euros/sq.m depending on the location and on the specific needs and requirements of the outsourcing companies that are moving to Sofia city.

The engine that drives the entire office market in Sofia is the outsourcing market. Sofia is the main outsourcing destination in Bulgaria, followed by the cities of Plovdiv, Varna and Bourgas. For more than 10 years already Sofia is a popular destination for outsourcing and many large and successful companies have already opened offices here. According to information offered by the Ministry of Economics, more than 20 000 people in Bulgaria are already working in the outsourcing business. Bulgaria keeps the second place in Europe and the fifth in the world as an appealing outsourcing destination.

The main factors that make Sofia office market so appealing for the outsourcing companies are the low maintenance costs, the affordable rental prices of the Sofia offices, the high-quality office premises in Sofia, the fast and reliable internet connection, the excellent knowledge and training of the specialists and their good knowledge of foreign languages. For example, a great part of the call centers in Sofia, Bulgaria operate in more than 25 languages. The companies which are building offices in Sofia and the realtors try to answer the needs of the modern outsourcing companies.