Mr. Boyadzhiev, how would you comment the development of the property market in 2016?
This year the real estate market kept a steady growth, with particularly strong interest from the investors in the development of the office buildings segment. The significant demand by new and growing companies raised the investors’ confidence to develop new and to complete old projects. The tendency of the big cities outside Sofia, to become increasingly attractive to companies in the IT and the outsourcing industries remained in 2016, and resulted in increased construction of office spaces. More and more office projects are rented before they are finished. For example I would point out our project Office Park Plovdiv, which was 80 percent rented even before the building had a use permit. This excitement and interest of potential tenants has led to stable rental levels that ensure certainty for investors.
Plovdiv has become a preferred investment destination for IT and outsourcing companies. What is the reason for this interest?
Plovdiv is the fastest growing market for office space, as the city is preferred by investors because of its universities, and skilled workforce for the technological industries. Many of the companies working in the city have grown and more and more new companies are starting their business here. Major global brands in the IT and outsourcing sector are looking for high-quality offices and have a number of requirements for office space, which can be met only by a new building. The demand is mainly for open-space offices. I see these trends as a sign of confidence in the city among the business. This shows that the economic environment is predictable and stable. Let us not forget that Bulgaria is competing with the other countries in Southeast Europe, and we should endeavor to keep the high level of the country and continue to establish it as the best place for outsourcing.
The development of this sector has led to an increase in demand for residential space. Galaxy Investment Group has plans to launch an attractive project in this direction and will soon announce the details of it.
What are your predictions for 2017?
In 2017 the growth in the outsourcing industry is expected to continue, as more and more complex business processes with high added value will be exported to Bulgaria. I predict a good year for the cities outside Sofia, and Plovdiv will remain investment destination No. 1 for most companies. I expect this trend to encourage the investors, and more office buildings projects to be implemented. However, the decision on such an investment is not taken easily and needs serious technological time for research, design, funding and of course implementation. Investors will continue to focus on buildings that have the potential for higher returns. These are already completed buildings or those that are to be completed, with good location and the opportunity for long-term rental contracts.
In terms of the housing market, I foresee steady growth in the sales at the initial stage of construction and interest from buyers in quality projects executed by proven investors.
Bulgaria, and Plovdiv in particular, has become preferred location also for industrial investors. We hear more and more news on the starting of new productions. What is your forecast on the market with industrial prosperities?
For industrial properties, as well as for any other, location is the most important factor. Large investors, who already have production in Bulgaria, are in themselves good advertisers and a strong motivating factor for other companies to come and to explore different regions in our country, as well as opportunities to build production bases. The dynamic development in this segment invigorates the property market as well. The new companies require good infrastructure, optimal production costs, and qualified workforce. The availability of these factors in Plovdiv and the region attract major global manufacturers. The transformation of the city into the industrial capital of Bulgaria, in turn, is a magnet for other businesses and is the basis for development of other sectors of the economy. So I remain optimistic and my forecast is for a steady growth in all segments of the property market.
Source: Economy Magazine