According to leading real estate agencies, new office space put into operation in Sofia was over 27 thousand square meters in the third quarter of this year. With this, the volume of all completed offices in the capital came to about 1.3 million square metres. Still, much of the office space area built in 2010 has not been bought, nor rented.
It should also be noted that price cuts allow workers and benefiting companies to transfer from lower-class offices into higher ones without increasing costs, and many benefit from it. Despite some improvement in the occupancy of individual buildings, vacant office space made no significant change and now it account for about 29 percent. The good news is that businesses are increasingly placed in a specially built and equipped for the purpose buildings at the expense of residential premises.
According to brokers, the building of new office space continues as under construction are nearly half a million square metres more. But how many of them will be completed within a period of six months is difficult to predict. Probably at the end of 2012 about half of them will be put into operation.
In this situation, rental levels have stabilized. There is a decline, but it now seems under control, because it is within about 2% annually in the most sought after central urban areas and about 5% in other parts of the city. In full swing is also the renegotiation of lease terms, as the demands of tenants are for decreased rent and often they are satisfied. The lack of flexibility in some owners leads to an outflow of customers and collapse in their revenue, making the prospect of bankruptcy of the business centers and shopping malls next year very real. Although Bulgaria is still only 30th in Europe in retail space per capita (76 square metres per 1,000 people), the demand seems quite dormant. Last month only one new store of a retail chain opened in Sofia, which against the boom from three or four years ago seems insufficient. Most stable among those who are still active in the market for retail space remain eating establishments that have almost constant clientele.
The general conclusion is that after significant changes in rental levels over the previous two years, 2011 reported tentative stabilization. Decline in commercial areas continue to be around 9% in Sofia and between 16% and 25% for other cities. In the shopping centers a store of 100-200 square metres in the capital costs around 27 EUR per square metre, and for other cities – between 11 and 15 EUR.
