Demand for Office Spaces in Sofia on the Rise
26.02.2007The office real estate market in Sofia continues its rapid development according to Colliers International.The office real estate market in Sofia continues its rapid development according to Colliers International. At the end of 2006, the total stock of Class A and B offices was estimated ат 564 500 sq m. Another 116 000 sq m new office space were added to the overall stock during 2006. This represents a 14 per cent increase for the second half of 2006 and 27 per cent for the whole year. “This is a record for the region,” said Atanas Garov, Colliers' executive manager for Bulgaria. The take up of new office space has been increasing steadily with the increase in quality office inventory, according to Colliers' report on the office market. Strong demand comes from multinational companies which either expand to Southeast European markets or simply take advantage of the favourable and improving economic conditions by offshoring business activities operations in Bulgaria. Colliers' forecast is increase in both demand and supply of office space. The land for office developments in Sofia's central locations is limited, so construction will be concentrated in the suburbs. In general, rental rates and sales prices are expected to remain within current limits. At the moment, the overall vacancy rate in Sofia is 5,2 per cent. “In 2009 most of the projects which are in different stage of completion now will be finished and we expect an initial decrease in the absorption rate of this new office space, but the market will stabilize afterwards.” Atanas Garov said. Average prime rent prices in Sofia are from 15 to 22 EUR a sq m per month, compared to 17 to 20 EUR in Bucharest.
