What is the return on investment in property – Properties

The returns in the various segments of the investment market in Bulgaria remain stable. It amounts to 7.75 percent for offices and commercial areas, 7.5 percent for industrial and 4 percent for residential properties.

The total investment volume is EUR 12.3 million, according to data from the latest Colliers report on the real estate market in Sofia in the first quarter of 2024.

In the segment of offices, the average rental levels in the capital for class A areas registered minimal growth up to 15 euros per sq.m per month, and for class B remain unchanged – 10 euros per sq.m per month. At the time of publication of Colliers’ data, there are 303,800 sq.m. under active construction. The gross utilized areas are 36,900 square meters, and the share of unoccupied spaces is about 15 percent for class A and B offices.

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At the flex offices (rented for a short time – note p.) in Sofia, the average monthly rent for a fixed desk is 180 euros per sq.m., for a shared one – 150 euros per sq.m., and for a private office – 220 euros per sq.m. The existing supply amounts to 63,800 sq.m., and a new 9,850 sq.m. is expected to be additionally offered to the market. The number of flexible workspace operators is 63, offering a total of 8,717 jobs. The total fund of the flex segment compared to that of standard offices class A and B is 3.4 percent.

In the segment of industrial properties a smooth growth of rent levels is registered, with which they reach 5.5 euros/sq.m/month for class A properties and 4 euros/sq.m/month – class B. The existing supply includes 1,412,600 sq.m of completed areas and 77,200 sq.m under construction. The gross leased spaces are 7,750 sq.m., and the unoccupied spaces decrease to 4.2 percent.

Rental prices for areas in malls increase to 43 euros/sq.m/month. The same trend is observed in the main shopping streets and shopping parks, where the indicator reaches 56 and 11 euros/sq.m/month, respectively. No new projects are planned in the segment of shopping centers, and 70,700 square meters of parks are under construction. Colliers’ data show that the share of free space in shopping malls decreased to 2.5 percent, while in the main shopping streets and retail parks it remained at 1 percent in the former and 3.3 percent in the latter.

High and mid-range residential unitswhich are offered on the market in Sofia, amount to 16,540, and 5,250 new ones are under construction. The average offer prices remain unchanged. For the sale of a two-bedroom apartment, they are between 180,000 – 230,000 euros, for a terraced house – 320,000 – 450,000 euros, and for a detached house – over 490,000 euros.

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