Global companies consider investing in industrial properties in Bulgaria


Global international companies within the top 5 world rankings, are showing investment interest in the construction of industrial and logistics buildings in Bulgaria. Inquiries are coming mainly from companies producing automobile components. Investment interest in our country also comes from companies associated with the production of aircraft parts, food processing, cosmetics and pharmacy.

Entrepreneurs are attracted primarily by the economic stability of the country, low taxes and skilled labor.

The greatest interest in building and leasing of industrial and logistics space is observed in Sofia and Plovdiv, but it also increases the searching for such terrains in North Bulgaria - Pleven, Lovech, Veliko Tarnovo, Vratsa, Vidin and Montana.

The share of vacant industrial space in Sofia remains low - around 2%, the main shortage is of a newly built and equipped with modern safety systems areas of adequate height and between column distances. The rent of such prime properties is remaining around 4.2 euros/sq.m. in Sofia and its surroundings and for the airport area exceeds 5 euros/sq.m.

Overall, the country's demand for industrial real estate remains for light industries and auto parts industries, to a lesser extent - for logistics operations. The investments are mainly in their own facilities or so called construction on demand - for the needs of a particular user.

In a similar model is developed the industrial area around Plovdiv, where already in exploitation are over 800 000 sq.m of production and warehouse space.

With the construction of the highway "Maritsa" areas around Haskovo and Kardzhali also became more attractive to investment in production. In the second quarter around Dimitrovgrad was announced the launch of two major projects - Yazaki factory and the Turkish manufacturer of automobile components Sa Ba. 


Office areas

There is an increasing interest in the construction of new office buildings, commented from. However, investors act more reasonably and cautiously, after a thorough market analysis.

In the last quarter in the capital were completed in a total of 7000 sq.m of offices, bringing the total stock Class A and B that reached just over 1.8 million sq.m. On the boulevard "Srebarna" is finished the construction of EM Building (6100 sq.m of office area), which is authorized for use by over 80% leased areas.

The shortage of quality supply was the stimulus for the launch of several large office projects in Sofia. In June BLD Office Park began construction of a second building by Polygraphia Office Center (10,000 sq.m office area) in the central part of the city. Together with the existing areas the project will offer 5500 sq.m of floor, allowing to attract tenants seeking larger sizes. Completion of construction is planned for the last quarter of 2017, and with this project the total supply of Class A offices in the city center will grow by a total of 75,000 sq.m.

As a result of active rental market share of vacant space continues to decrease and to the second quarter of 2016 stood at 2% for the most wanted by tenants projects.

Rents remained stable at around 13 euros/sq.m. for prime offices in Sofia and 6-8 euro/sq.m. for class B projects. In Plovdiv prime areas are available for 8-10 euro/sq.m, while in Varna and Bourgas rental rates remain in the range 6.5-8 euro/sq.m.


Commercial areas

Over the past three months there are no new major projects in the sector of retail space, the consultants explained. There is active working on restructuring the buildings of the City Center Sofia and Mall Markovo Tepe in Plovdiv.

At the same time the dynamic development in the segment of fast-moving consumer goods trade leads to dislocations in the market for retail space. Because of financial difficulties Carrefour and Piccadilly freed some of their locations, but that opened a niche for the rapid expansion of some of their competitors.

For example Lidl, which has so far grew mainly with street locations, announced its entry into the Sofia Ring Mall and took the place of Piccadilly, once there is an object in Mall Galleria in Bourgas. The withdrawal of Penny Market from Bulgarian market free space for expansion of the Lithuanian chain T-Market, which in the last quarter rented or acquired its 12 locations in Sofia and in the country.

The mentioned trend has led to market entry of a new type of retail outlets - supermarkets, which provide areas of local producers and small traders. This type of store will open in September in Bulgaria Mall, and it expects an opening in Sopharma Business Towers.

Rents for prime locations in Sofia malls remain stable - 28 euros/sq.m. Boulevard "Vitosha" rents are also resistant about 44 euro/sq.m. for premises of 100 sq.m.




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