Property: Locals Get a Taste of the Lifestyle They Fancy*

Sofia's two gleaming new shopping malls are giving Bulgarians a taste of the western European lifestyle to which they aspire.

Both feature hundreds of international brand names alongside several fast-growing regional names in fashion and footwear, as well as multi-screen cinemas, dozens of cafes and restaurants and, for a nation of readers, one or two bookshops.

Air-conditioned basement parking lots and what will be the country's first Imax cinema in the Mall of Sofia in the centre of the capital highlight the contrast with the 10-storey building's drab surroundings. At the City Center Mall south of the centre, the ground floor cafe surroundings have been landscaped to soften the view of a communist-era museum. But the ground floor at both stores is anchored by a Bulgarian brand - a Piccadilly supermarket, one of the country's leading food retailers.

The completion of the two malls is a sign that, after several years of feverish development of holiday apartments and hotels, a market is emerging for commercial real estate. Transactions in the past year totalled ˆ350m, according to Elta Consult, an affiliate of CB Richard Ellis, a property company. Both malls were taken over by new investors shortly before they opened.

With a population of about 1.5m, Sofia could absorb four or five big malls, analysts say. But 10 local and international companies are reportedly looking for sites, suggesting that a construction boom similar to that on the Black Sea coast may be repeated.

"If new projects that developers have started are realised, the capital will have at least three new shopping malls in the next two years," says Veneta Krasteva, the organiser of Real Estate Expo in Sofia.

Investors are also considering half a dozen mall projects in some of the country's largest cities. Two are under construction in the Black Sea port of Bourgas and the central city of Veliko Tarnavo. Several malls are planned for Varna, also on the Black Sea, and Plovdiv in central Bulgaria.

Equest, which is listed on London's Alternative Investment Market, focuses on commercial, retail and industrial property. The company acquired City Center Mall for ˆ94m from local developer Stroytown.

With 22,000 sq metres of space to let and parking for 500 cars, City Center has an occupancy rate of more than 90 per cent and is expected to be fully let by October.

As well as Piccadilly, it is anchored by Technomarket, a leading consumer electronics retailer, and a Sunny Films multiplex cinema.
Cinema City International, part of Israel Theatres, a property and entertainment group, launched the Mall of Sofia project five years ago. The Aviv-Osif group, an Israeli developer, later took a stake in the ˆ52m project.

Last year a consortium formed by GE Real Estate and Quinlan Private, an Irish rpoperty investment group, acquired 50 per cent of the project. They raised their stake to 100 per cent, for a total outlay of ˆ82m just before the Mall of Sofia's June opening.

"Our theme is to have a city within the city, including most things you will need for shopping and entertainment all under one roof with the latest in high-tech," says Eli Egosi, Mall of Sofia's chief executive.

With more than 75,000 sq metres of floorspace and more than 130 retail outlets, the mall is Bulgaria's biggest shopping and entertainment complex.

"The new malls make an attractive alternative to renting space on a main Sofia boulevard," says Mr Egosi. Monthly rents reach ˆ120 per sq metre on a high street while the highest price for space in a mall is ˆ60 a sq metre.

* The article is part of the an extensive 4-page report on Bulgaria that the Financial Times recently published
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