OVERALL VIEW OF THE MARKET
For the last year, the total overall leasing activity has remained stable. The total rented area for 2019 ranges around 100000 sqm. which is a sign of the continuing trend of stable growth that has been continuing for the last 4 years. The biggest contributers continue to be the IT Outsourcing Firms which occupy almost 50% of the office market in Sofia. The lack of office space is still very much noticeable, despite the new office buildings built each year. A noticeable demand emerges in other regional cities.
SUPPLY AND DEMAND
According to the national statistical institute of Bulgaria in 2019 there are more than 11 office buildings in Sofia that have started construction with span over 38000 sqm and the total office areas in the city reached around 2,300,000 sqm. Among the most noticeable projects completed in 2019 are Space tower, Goldline and the first phase of Garitage park. The vacancy levels remain lower than the levels in 2018. Net absorption continues to be rising since 2016 and amounts around 80,000 sqm. Almost a third of all deals in 2019 were due to relocations. Demand for class A office space continues to rise in Sofia and is being noticed to rise in other local markets such as Plovdiv, Burgas and Varna.
During the last year the asking rental levels remained fairly unchanged with small exceptions in developing local markets such as Plovdiv and Varna. If the current trend continues, IT and outsourcing firms will continue to be the main occupiers on the office market in Sofia and overall Bulgaria. While awaiting the completion of new office buildinds some companies might refer to short-term solutions.
Besides being a WTO member since 1996, a NATO member since 2004 and a EU member since 2007, Bulgaria has many other “hidden” quialities that contribute to the expanding development of the office and real-estate market. 2019 proved to be a good year for Bulgaria’s economy that continued to grow slowly, but surely. In 2019 S&P Global Ratings revised its outlook on Bulgaria to positive from stable, citing the country’s improving domestic financial conditions “Despite bouts of political instability, Bulgarian authorities have consistently endeavored to maintain low levels of public debt, and substantial levels of liquid fiscal assets,” said S&P.