According to Colliers, for H1 22 Bulgaria yields the highest ROI rates among all major CSEE countries, namely 7.75% in Office space as compared to 6.50% in Romania; 5.00 % in Hungary and Slovakia; 4.35% in Poland, and 4.00 % in Czechia.

The same is valid also for the Industrial and Retial (particularly Shopping Centers) asset classes. The ROI rate in Bulgaria in Industria is 8.50%; in Romania – 7.50%; in Hungary – 5.75%; in Slovakia – 5.50%; in Poland – 4.20%, and in Czechia – 3.90%.

For more information see the figure below.

Commercial Asset Class

Colliers: Office Market in Sofia Grew by 2% in H1 2022, Demand Continued its Upward Trajectory
In the first half of 2022, the market for class A, B, and C offices in Sofia will reaches 2,603 ​​million sq.m. and registered a growth of 2%. The volume of projects under construction has maintained its level since the end of 2021 – 254,400 sq.m. Buildings under construction have been completed, but the launch of new ones has been postponed due to rising inflation and increased prices of construction materials, Colliers’ analysis for H1 2022 shows.

Residential Asset Class

The nascent development of built-to-rent investment market in CEE, especially in Poland and Czech Republic, provoked interest in Bulgaria, as well. By definition, built-to-rent (BtR) is a term for residential units built specifically for long- term renting. The properties are professionally maintained and managed by the owner or operator of the building. The first projects of this type are already a fact in Bulgaria. In the medium term, this still undeveloped market niche has a good development potential.

In the first half of 2022, the supply of mid-plus and high-end residential market saw a 4% growth, leading the number of residential units to 13,270. For the first time, since the end of 2020, an increase in projects under construction was recorded, comprising a total of 3,800 residential units. Larger shared premises (living and dining rooms) and dedicated home office areas have become typical to the interior planning of new properties.

The highest sales volume was recorded for 3-bedroom apartments, followed by 2- bedroom apartments and houses.

Industrial Asset Class

The logistics space market maintained its activity levels since the end of 2021. Demand was initiated by retailers and wholesalers (69%), followed by logistics operators (23%), professional services companies (3%), pharmaceuticals (3%) and manufacturing (1%).

Net absorption was 34,690 sqm. – a 46% rise, compared to the same period of 2021.

Rental levels remained unchanged. The gap between asking and effective rent started to melt. The average asking rental rates for class A warehouses, with good location and established infrastructure, were between EUR 4.7 – 5.2 per sqm per month. Class B space stood at an average of EUR 2.7 per sqm per month.

Retail Asset Class

• The most active market players – discounters will continue their expansion in shopping centres and retail parks. New operators from the sector are expected to enter the Bulgarian market.

Source: Colliers Bulgaria