Rentals of Cheap Offices in Sofia Fall to EUR 3 per sq.m.

Pari Daily, 09.10.2009

Office rents in the low price segment in Sofia have fallen to EUR 3 per sqm. for unfurnished offices. To 8 Euros per sq.m. have decreased the rental prices of furnished offices in Class B in Lozenets residential area, around Cherni Vrah Blvd., Tsarigradsko Chaussee Blvd, Bulgaria Blvd. and small streets in the center. This is what shows analysis of BULGARIAN PROPERTIES.

Price Discounts

Price reductions are large, ranging from 11 to 45 percent. Price levels for this type of office ranged between 7 and 10 EUR per sq. m. until early in 2009 , and the average price decline in the offer prices varies between 20 and 40%.

Highest real interest is to lower price range of offices 4-7 EUR price per sq.m., and rental agreements are reached with even further reductions in prices.

Luxury

In the offices of class A and those with an ideal central location prices vary widely from 8 EUR per sq. m to 26 EUR per sq. m. Mass offerings in this segment is at around 10 EUR per sq. m.

The most expensive office rents are in the building of "Landmark" on Tsar Osvoboditel Blvd. - 26 Euros per sq. m., and for 15 - 20 Euros per sq.m. offices are in the center of the capital - Vitosha Boulevard, Positano Str., Dondukov Blvd., Todor Alexandrov Blvd., Bulgaria Blvd. Offices in and oppostite Business Park Sofia are being offered at prices of 10 Euros per sq.m.

Between 8 and 10 Euros per sq. m. are quality offices around Maria Luiza Blvd., wide center areas, Tsar Boris III Blvd., Botevgradsko Chaussee Blvd. and others.

2009

Last year, rental prices for Class A offices varied between 15 and 20 EUR per sq. m, they fell to 11-17 EUR per sq. m till April 2009, to reach 10-15 EUR per sq.m. in September. So, the decline in rental offers for 2009 is around 25-30%, said the Chied Operations Manager of BULGARIAN PROPERTIES.

Offers

Office supply is the highest compared to the demand in the business properties segment. This explains the significant reduction in prices compared with last year. Determining the choice of office are a few key factors, amongst which the price is leading. In order to optimize their expenditures most companies prefer to rent an office with a less attractive location, but at a lower price. So the trend is to move from the center to periphery of the capital. New office buildings, offering decent conditions and completed to European standards can be found in these areas, according to BULGARIAN PROPERTIES.

Huge supply, low demand

The market for office sales has been stagnant since the beginning of the year. The offers are various but almost no demand. Sellers rarely agree to reduce prices. Only 15 percent of the offers are offered at reduced prices and the reductions are still within 10%. There are, of course, owners who are willing to make big discounts, but they are very few, according to BULGARIAN RPOPERTIES.

• Дори и след намаления обаче офисите за продажба много рядко се предлагат на цени под 1500 EUR на кв. м. Even after the reductions, however, offices for sale very rarely are offered at prices below 1500 EUR per sq. m. Among Bulgarian Properties' offers prices vary from 2000 EUR per sq. to 2700 for offices in Class A or B buildings in downtown Sofia. Between 1500 and 2000 EUR per sq. m are offered offices in new office buildings in the broad center, on Bulgaria Blvd and in Lozenets district. Offices for under 1500 EUR per sq.m. are rare, said Polina Stoykova.

Due to the still high prices many buyers still prefer to buy residential property that would qualify for office since the reduction in prices for these properties is much greater, Polina Stoykova summarized.

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