The most newsworthy real estate trend to emerge in the first month since Bulgaria’s EU entry was the arrival of conservative investors like pension and insurance companies, said Valeri Valchev, executive director of local Cushman&Wakefield affiliate Forton International.The new investors are attracted by the lowered political and economic risks inherent to Bulgaria real estate investments projects and the availability of soft-term loan financing.
2006 saw the first Bulgaria real estate takeovers involving U.S. institutional investors – GE bought Mall of Sofia while Gramercy acquired Business Park Sofia. Now it’s the turn of German and Austrian pension funds, said Valchev.
According to Forton, the conservative investors will be targeting prime-location commercial real estate and office developments fully leased for a period of no less than 5 years and specced out to relevant EU standards.
Local realtors said business real estate in Bulgaria currently yield 9-10% versus an EU level of 5-6%. The influx of conservative investors will moderate that rate to 7%, said Ralf Holland, the newly appointed projects manager at Forton. Valchev concurred, forecasting that Bulgarian real estate yield levels will dip below 8% within the next 18 months.
Source: Dnevnikam