Bulgaria’s investment market to stay stable in 2023
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- 30 Mar 2023
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The Bulgarian commercial property market in 2023 will maintain activity around last year's levels. Main buyers are again expected to be local investors with sufficient funds or being able to obtain favourable credit terms. This is what Cushman & Wakefield Forton is forecasting for the period. C&W Forton estimates the total volume of commercial property transactions in 2022 to be just over €270 million. Transactions with traditional market assets – office and retail space – are predominant, while there is also a stir in the industrial property segment.
Industrial rents on the rise
The last quarter of 2022 was marked by a significant drop of vacancy rate in Sofia, with the share of unoccupied production and logistics space falling below 1% of the total supply. On the one hand, the active demand from retail and logistics companies led to the exhaustion of available space. The last quarter was marked by an acceleration of the occupiers' activity and take-up. The total volume of leased space and completed owner-occupied premises in Sofia amounted to roughly 104,000 sqm, an unprecedented quarterly result. As at the end of 2022, the construction pipeline amounted to 319,898 sqm. More than 60% of this supply is for owner occupation. Active development locations are the state industrial zone to the west and the Sofia ring road area to the east The fall of 2022 registered continuing rent increase, with prime logistics space in Sofia rented at €4.75/sqm for premises over 10,000 sqm. The rents for small to midsize schemes increased to €5/sqm in Q4 from €4.6/sqm in the previous quarter. The price growth is pushed by rising construction prices and operating expenses and is expected to continue.
Low pipeline and stable vacancy rate in offices
With 76,009 sqm leased space in the last quarter of 2022, the office market in Sofia registered activity comparable to the pre-pandemic time. The total take-up for the year reached 186,655 sqm. Space optimization remained the leading trend over the last year, since many companies continued to use their offices at partial capacity, due to the hybrid work model.Net absorption remained moderate, with 48,683 sqm annual volume. Read More..
