PROPERTY BULGARIA INFO

Friday, January 26th, 2007

Golf courses sprout to rescue Bulgarian Black Sea coast investments

After several years of feverish development of holiday apartments and hotels, investors are redirecting their interest to commercial real estate.

Contrary to current trends, the three fully completed and functioning golf courses in Bulgaria are nowhere near the seaside. The first one was built in Ihtiman by the owners of SofiaAir and, having been the first attempt in the country, is not perfect. The golf course in Ihtiman was to a great extent a project of social rather than business significance. Local residents had turned the plot that the Municipality of Ihtiman sold for the purpose of building the golf course into an illegal rubbish depot. The investor recovered the land and thus relieved the local authorities of their financial and environmental problems. SofiaAir bought two more plots, respectively near Razgrad and Sliven. The company put the Sliven golf course into operation and is completing construction of the Razgrad one. SofiaAir is a co-investor in the grand project for a golf course, which is being built in the area between Bansko and Razlog. The other major investor in golf is advertising boss Krassimir Gergov. His is the third operating golf course in the village of Ravno Pole in the Municipality of Elin Pelin, which opened last year.

The investment in the golf course near Razlog amounts to EUR 62 million. The plot is in the valley of Razlog, three km from Bansko. The golf course will spread over 900 decares and will be 6210 metres in length. The built-up area will be about 120 000 sq m and will consist of hotels and apartment buildings. Mountain streams will flow through it and the golf club will be in the centre of the course.

The golf complex is already being built, and the first buildings – hotels and apartments, which are being built near the entrance of the golf course, are in an advanced stage of works. The huge investments in the golf course make the holiday villages attractive and the houses there are sold at prices ranging from EUR 1200 to 1500 a sq m. Landowners are selling plots of the 9th (second to lowest in terms of quality and fertility) category at prices of EUR 30-50 a sq m.

The logic behind the construction of the golf courses started by SofiaAir was to create a network of courses that covers the whole country. That is why they bought the plots near Razgrad and Sliven that, together with that in Ihtiman, form a kind of a ring in the country. According to SofiaAir president Lilyan Todorov, the area around the golf courses is of no importance to the golfers. In his opinion, the significant factors are the easy access and the variety, meaning lay and number of holes, and not the variety of properties that will be built nearby.

However the similar sites that have been built near the Black Sea coast follow exactly the opposite logic. They offer not only courses designed with the help of international golf pros, but also large surrounding areas for property construction.

There are over 10 investors’ projects for golf courses and they are at different stages of construction. According to the latest government data, investments this year in the more than 10 golf course projects that are currently in different stages of construction amount to 700 million leva. The largest share of these funds will go for construction of golf courses on the Black Sea Coast. The total amount of the investments in the region of the northern Black Sea coast is nearly EUR 320 million.

A first-class-investor certificate has been issued to Cabland Golf Complex for the construction of a golf course near Pomorie. The investment in the complex there is E 370 million, and the owners of the company are the registered in Malta Darnik Ltd (80 per cent) and Pomorie municipality (20 per cent). According to data provided by the manager of Cabland, Dario Tomaletti, the investments come from abroad, mainly from the Gallagher family, which invested in several golf courses in Spain. The course will be built over 2000 decares near the village of Kableshkovo.

Three investment projects for the construction of golf courses in the area of Balchik were announced. The Light House course is an investment of Pirin Golf and it was entirely designed by Ian Woosnam. The other two courses under construction in this area were designed by Gary Player – The Black Sea Rama near Balchik and The Thracian Cliffs near Kavarna.

Investors in The Black Sea Rama are Krassimir Gergov, sociologists Kuncho Stoychev and Andrey Raychev and investment company Landmark Properties. The site is being built in the area called Tabiyata and the investment amounts to nearly E 103 million. The price at which residential properties will be sold is EUR 1700 a sq m. Besides the course and the residences, the complex will offer tennis courts, a spa centre, gyms, football pitches and swimming pools.

The Thracian Cliffs complex will cost EUR 120 million and is the largest of the three projects. It is situated between the villages of Topola and Bozhurets on an area of 1400 decares. The investor here is the international company Thracian Cliffs Golf and SPA. The investors are planning to build a five-star hotel with 3000 beds.

According to Address Property Agency data, the price of land in the region of Balchik, Kavarna and Shabla ranges between E 40 and 100 a sq m due to the construction of the golf complexes. Property owners hope that investors in hotels and apartment buildings will follow the investors in the golf courses.

A month ago investment company Bulgarian Land Development purchased 85 decares of land at the price of EUR 3.3 million or EUR 39 a sq m. The plot will be used for the construction of a modern complex – Harmony Hills.

Presently 200-250 apartments in holiday complexes under construction are for sale and about as many again have already been sold in the region of Balchik and Kavarna. Apartments around the golf complexes are sold at the price of EUR 700-1500 a sq m.

The construction of a golf course and a holiday village is beginning in the vicinity of Primorsko. It will be in the area called Silihlyar. The investor in this site is Primorski Golf, in which the municipality holds 90 per cent of the shares with the contributed property of the land and the Yuzhen Golf Company, owned by Krassimir Gergov, holds the remaining 10 per cent.

Fort Nox started building a practice course and two apartment building complexes in the vicinity of Sunny Beach. The whole complex is situated on an area of 100 decares, but the course will be a small one – only 11 decares and will have only three holes. 800 apartments will be built on the rest of the area.

The company Oil and Gas Research and Production, which is based in Pleven and owned by the Varna group TIM, also announced its intention to build a golf course. They have registered the company Golf Shabla and as the name indicates they are going to work on the completion of the project of the site near Shabla. The investment here is EUR 20 million.

Manuel Sanches, President of Ferry Group that invested in the village of Katina, said that golf in itself was not profitable. Profit is made from the activities that go along with it. This is probably why so many golf projects are under construction at the Black Sea coast.

Address Property Agency stated that investors in the Black Sea coast hoped that these projects would make the tourist season longer and attract tourists of greater affluence.

Property brokers who deal in apartments in the new holiday complexes both at the seaside and in the mountains already point out golf course proximity as an advantage. The apartment buildings near the golf courses were extensively presented at the Property Expo forum at the end of October.

The golf complexes which are being built at the seaside are located next to or within the 20km zone, where old village houses and plots sold rapidly in the past four or five years. Investors bought houses in this area at the price of E 10 000 because they believed that after the coastal line is built-up the interest would shift to them. National property agencies such as Address, Foros, and Yavlena claim that there has been no demand for properties of this type for over a year.

The successful completion of the golf-complex projects in this area might revive the market of properties there and bring returns to the investors who bought properties with the intention of resale.

According to the experts from Address, if managed well, the properties near the holiday complexes may bring their owners annual rental returns of four to five per cent.

But this will happen only if the authorities in Bulgaria solve a number of major problems – the construction of roads, filtration stations and sewerage systems, electricity supply and the whole technical infrastructure.

Bulgaria Property Wise