EU membership has increased the confidence of foreign investors in the
country's real estate sector across the board and a wider range of nationalities
are expected to invest in the country in coming years.
Currently, 29% of real estate sales in the country are made to foreigners,
mainly British (67%) and Irish (12%). Other EU members have been less enthusiastic about entering the market, with Germans accounting for 4% of sales and Italians 3%. In 2007, the majority of foreign purchasers is still expected to be British.
Particular areas of interest for individual foreign investors this
year will be ski resorts such as Bansko, Pamporovo and Borovets.
Black Sea resorts such as Albena, Golden Sands and Sunny Beach are
expected to draw less demand as properties in these locations are considered to be
profitable only in the summer. Negative press coverage of the perceived "overdevelopment" of the coast may be another factor, though many resorts are still investing heavily in holiday complexes, and many foreign firms are putting money into high-end developments such as luxury hotels and golf courses.
Katya Tsenova, the executive director of Address real estate agency, told
local press that another area of growth would be spa resorts such as
Velingrad, Hisarya and Sandanski. Spa tourism also is the focus of the
State Agency for Tourism's current development campaign.
Last year, British real estate firm Assetz caused a stir in Bulgaria
by saying that the Balkan country was a less favourable investment
location than the UK and that the time for fast profits in the
country was over. Assetz recently issued a report, listing Bulgaria as
the third best country in Europe in which to purchase buy-to-let property. While the
UK was listed above Bulgaria, with Poland taking top spot, Bulgaria
came above Turkey and France, traditionally strong buy-to-let
locations. Estate Agent Knight Frank lists Bulgaria in fifth place in
Europe in house price growth for 2007.
Besides, Colliers International announced last week that the industrial real estate
sector had received considerable attention in 2006, driven by logistics operators,
manufacturers and traders. Bulgaria's location on five of the Pan-European transport corridors highlighted for development by the European Commission is one of the factors driving demand. Other factors include the rapidly improving economy, the boom in retailing and production and finally, Bulgaria's lower costs in comparison to the rest of the EU.
At present, 700,000 sq metres of modern industrial space are available in Sofia, while Plovdiv has some 250,000 sq metres and the coastal city of Varna about 200,000 sq metres. Rents for prime modern industrial sites, which Colliers said have climbed to
"unrealistically high levels", range from $5.10 to $7.4 per sq metre, according to location and accessibility to transport links.
Atanas Garov, Colliers International Bulgaria's executive director, said he expected an increase of 220,000 sq metres of logistics space in Bulgaria this year, due to improvements in the transport infrastructure, particularly in Sofia and the southern city of Plovdiv.