Real estate investment to exceed all expectations, says Elta Consult CB Richard Ellis' General Manager
   Real estate investment volumes in Bulgaria are seen to significantly exceed all expectations this year, ignoring possible effects of the global credit crunch. "We do not expect slowdown in the fourth quarter of 2007, neither next year, as property market in Bulgaria will not be affected by the crisis that seized the US", says Valeri Leviev, General Manager of Elta Consult, Bulgarian partner of US commercial real estate services group CB Richard Ellis. Mr. Leviev shares this and more opinions on the market in an interview for the Bulgarian Property Index magazine. The increase in the office rents in Sofia will keep on going in the next year, provided the vacancy rate remains within its current low levels of 6 to 8%, he says. According to him, demand is increasing in line with development volumes and so the capital's market has the capacity to absorb new supply. According to the analyses of Elta Consult CB Richard Ellis, office space in the capital will reach 860,000 sq m by the end of 2009, while Prague, which is approximately the same size, has over 2 million sq m contemporary office stock.

Apartment prices in Sofia take off
   Growth in residential real estate prices continues to show no signs of abating, pushed forward by strong shortages in supply. The difference between supply and demand in Sofia is so huge that the average price of apartments has increased by 15.6% in the third quarter of the year only, taking the annual growth to 42% according to the latest survey by National Statistical Institute. Such increases have not been seen even between 2003 and 2005, when the prices in the capital rose with very fast rates starting from much lower levels. Average values in the whole country are surging despite recent slowdowns in the real estate markets around the world. Even after the central bank drew out liquidity from the commercial banks with the increase of their mandatory reserves, demand has remained strong. Several institutions have increased their base interest rates, which set the benchmarks for borrowers' credit costs, but according to experts, the effects of the rises have been limited.

Real estate professional: Property is better investment than the stock market
   Property has proven as a better investment in the long run than public stocks, real estate professional stated before Bulgarian media. Frank J. Polzler, co-founder of the European operations of American real estate services brand Re/Max, says every market has its ups end downs. "But it never goes down where it was", he adds. Mr. Polzler's advice is to buy now and "let this thing grow". 'There were times in between when the market slowed down; people had to sell, so prices would drop a little bit. But it's a better investment than, I think, the stock market", he says.

New projects opt for more services, better infrastructure, BalPEx shows
   Residential developers are adding more services in order to correspond to the higher prices they ask for properties. There are almost no large-scale schemes targeted at the high-end market, which do not offer private infrastructure and facilities such as parking lots and garages for all residential units, maintenance of the common areas and extras like swimming pools, SPA centers or shops and restaurants. This was demonstrated by the investors at the largest real estate exhibition in the Balkan region, BalPEx, or Balkan Property Exhibition, which was held in the beginning of October in Sofia. The biggest projects in the Sofia region presented there were located in Bistritsa, Pancharevo, Gorna Banya, Bankya and Manastirski Livadi districts. The exhibition showed that more and more developers have been attracted by the high-end real estate market segment. The highest asking price for an apartment at the expo was 3,500 euro per sq m for residences in Sofia's Lozenets borough, near the U.S. embassy, but it represented rather an exception of the overall market. Price levels for in prime areas of the city ranged between 1,200 and 2,100 euro per sq m depending on exact location, views, completion deadlines and on-site additional services.

Investor Slalom
   Super Borovets project broke ground in the beginning of October paving the way for the development of what is thought to become the most high-profile ski resort in Bulgaria. Investments of between EUR 500 and 600 million are planned for the area not including the funds needed for the infrastructure. The scheme is to be developed by a special purpose vehicle, Rila-Samokov 2004, whose shareholders include Equest Investment Balkans and an Oman state fund, which together hold 67% of the capital, construction company Glavbolgarstroy with 8% and Samokov municipality, which holds a 25-percent stake. The development of the Super Borovets resort is divided in two phases in the period 2007 - 2012. The total built-up area of the residential and hotel part will be 623,500 sq m. Some 40 km new ski runs will be also developed along with ski lifts and other service facilities.


Reference: Index Imoti Magazine