Colliers consulting company released a market analysis of the commercial property market in Central and Eastern Europe for the first half of 2017, which states that Bulgaria is the fastest growing market. The analysis reports an increase of 213% on an annual basis in the volume of investments in Bulgaria in the second quarter. This is the highest growth in CEE markets, in the environment of the existing historical investment growth for the whole region – by 17% for the period to EUR 5.4 billion.
Following Bulgaria, the second fastest growing commercial property market is Romania with an increase of 155%, Czech Republic is third with 114%. The experts expect that if the pace remains the same by the end of the year, the 2017 volumes will reach a new record, beating last year’s EUR 12.2 billion..
As an absolute value, the amount of investment in commercial property is the largest in the Czech Republic – about EUR 2,159 billion. This takes Poland down to the second place with EUR 1,520 billion. Bulgaria is at the end of the ranking with EUR 390 million.
The other conclusions of the report:
In a separate analysis of Colliers Bulgaria for office space in particular for the first six months, Sofia maintains the trend of active demand for office space in 2017 and the resurgence of the construction of new sites and the reconstruction of existing ones. A total of 5 projects with a total area of nearly 90 000 sq.m. are planned to be completed by the end of 2017, as most of them already have signed rental contracts.
According to the company, the demand continues to be stable, the rented space is 94,000 sq. m. , which is a growth of 64% compared to the first half of 2016. Most of the rental deals in Sofia (43%) are concluded at the “under construction” stage. The reason for this is the continuing trend of supply shortage of class A premises since 2016 as well as the profitable rental rates at this stage. The following in volume deals are executed due to contract renewal (19%), change of location (18%), office expansion (17%) and deals with new companies (3%). The main driving force of the office space market remains the outsourcing sector. It forms nearly two-thirds (67%) of market transactions in the first half of 2017.
The vacant Class A and B office spaces in the capital in the first half of 2017 are 170,000 sq. m., as 25% of them being Class A. Due to the Class A office space shortage, there is a slight increase in rental rates. The low percentage of vacant first class office space is expected to lead to increased interest in Class B buildings and increased dynamics in this segment.