The residential markets in Sofia and Varna account for the bulk of luxury homes in Bulgaria while occasional listings in other cities are the exception rather than the rule, says a market overview commissioned to local analytical outfit Industry Watch by Lux Imoti, a local real estate agency specialising in upmarket properties.In many cases, the label ‘luxury’ is misleading because it is used to describe properties that offer basic amenities like parking and sports facilities which are considered standard in the rest of Europe, said Industry Watch. (more…)

Wizz Air announced plans to expand its Sofia base in Bulgaria by deploying an additional new A320 aircraft starting from 12-Jul-08. The airline will commence new services from Sofia to domestic Varna, Milan-Bergamo, Valencia, Barcelona and Izmir (Turkey), and will increase frequency on existing services to London, Rome and Dortmund. By introducing the Sofia-Varna route, Wizz Air will become the first LCC to operate domestic services in Bulgaria. Concurrently, the launch of Sofia-Izmir service will be the first low fare route from Bulgaria outside of the EU.

Wizz Air is also launching its recruitment for pilots and cabin crew to be based in Sofia for staffing the new aircraft.

“This wave of expansion will triple Wizz Air’s current capacity in Sofia and will further strengthen its market leadership in the Bulgarian low cost airline sector. Our low fares combined with the convenient travel experience on board of our young A320 fleet continues to attract an ever increasing number of passengers allowing us to launch more destinations and flights from Sofia. We are especially proud of becoming the first low fare airline flying a domestic service in Bulgaria,” said József Váradi, Chief Executive Officer of Wizz Air.

Prices in several overseas property investment markets have remained buoyant despite slowing growth in the domestic market.

According to research from overseas specialists Assetz, property in key markets, including Cape Verde, France and Bulgaria, is remaining profitable for British investors. “In spite of a continuing slowdown in capital growth across the global property market, it remains an exciting time for investors worldwide,” said Stuart Law, managing director of Assetz.

“With a plethora of exotic new destinations coming to the forefront of property investment, there are several emerging markets with the long-term ability to cause more than a stir of interest among the more canny of property investors.”

In France reforms by newly elected president Nicolas Sarkozy – including tax relief on home ownership - are helping to drive up prices.While tax breaks do not apply to foreign ownership they have presented a spur to the domestic market, driving prices higher and providing a boon to British investors. At present the country is providing just over 40 per cent returns on cash invested, and generates net rental returns of 8.6 per cent.

In eastern Europe Bulgaria remains the runaway leader.The country presently produces an average of 84 per cent returns on capital investment, well ahead of Poland in second place. It is becoming increasingly possible for buyers to obtain the highest possible returns on cash invested, with the increasingly competitive mortgages available on the market, even in less established locations, offsetting any slowdown in price growth,” continued Mr Law. “Investors now have the capabilities to leverage their money in a way that affords them the chance to take home a significant percentage against any initial outlay.”

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By Kerin Hope and Theodor Troev
Financial Times

Home owners in many parts of the world have reason to worry about the implications of the international credit crunch. In Bulgaria they do not. Bulgaria’s residential property market is showing unexpected resilience to the impact of the crisis thanks to investment by east Europeans and increasing numbers of local buyers. Interest from foreign investors remains high as they are aware that Bulgaria still has the lowest property prices in the European Union, says Michail Chobanov, chief executive of Sofia-based Bulgarian Properties.

Investors from Russia and Romania have started to replace the British and Irish buyers who were the first to put the Black Sea coast and Bansko, a ski resort south of the capital Sofia, on the international second-home map.

“The credit squeeze has had an impact mainly in the US and the UK, while the market in the past six months has been driven predominantly by investors from Russia, Romania, Poland and Ukraine,” says Rossen Dimov of Rockarch Estates, a London-based property consultancy. Russians and other east Europeans, who filled Bulgaria’s Black Sea resort hotels in the communist era, are returning as buyers of holiday homes. While no official statistics are avail-able, local estate agents say sales to east Europeans, whether of low-priced apartments or high-end villas in gated developments, have shown a significant increase this year. (more…)

The Bulgarian cities of Sofia and Varna have been identified as potential overseas property investment hotspots by analysts PropertySecrets.net.Strong demand in recent years has allowed the country to develop a robust financial sector, making investment in Bulgaria easier than neighbouring markets. Yet, while Sofia and Varna are expected to provide investors with good returns in the medium term, some areas of the country are best avoided according to the organisation.

“I think in the mountains and the coast it’s already completely saturated and over-supplied,” commented Simon Tweddle, chief analyst for PropertySecrets.net. “I think the popularity of the country generally will subside a little bit but there will be more of a shift away from the coast and the ski-resorts and into the cities.”

A recent boom in these areas is coming to a dramatic end, according to PropertySecrets. Cheap material and labour in the Bulgarian property market allowed property to be built for a low cost, before being sold for ever increasing prices.

However, this market is now saturated.

“The likes of the beach and then the mountains which are completely over-supplied and are not an investment location at all, in my book,” continued Mr Tweddle.

“You’ll probably end up losing your shirt if you invest there.”

Yet, buying off-plan in up-and-coming locations is a key trend in the Bulgarian property market.

“Most people are buying off-plan because with off-plan you know what you’re getting, more or less,” continued Mr Tweddle.

This is largely due to the convenience of new property.

“You can see the floor plans at home, you can see the pictures, you can see the location, whereas with the existing property you need to have it checked out a little bit more, you don’t know if the room sizes are going to be right and you need to go and visit it yourself, which is a bit difficult for a foreign investor,” explained Mr Tweddle.

The office market remained stable in contrast to the industrial one thanks to the good number of class A and B offices for sale and rent. Industrial terrains enjoy investor interest as compared to other sectors on the market in Bulgaria. Demand in this industry much outpaces supply, Foros analysis shows. This is thanks to the country’s accession to the EU and its success in establishing a broad network of relationships with countries from within and without of the EU.

The demand of warehouse and logistic areas in big cities grew, and the existing industrial infrastructure proved to be insufficient for the boosted economic activity. This accounts for the enhanced interest in regulated plots and agricultural lands with a view to subsequent industrial and warehouse construction. All industrial areas in Varna have seen a large increase of land prices since the beginning of the year. It has been estimated at 105 per cent for the whole municipality (the newly established Topoli area saw a 200 per cent mark-up).

Plots asked average 22 euro/sq m at the beginning of 2007, whereas at the end of September they sold at as much as 70 euro. Plots in the industrial districts within the city itself were even more expensive. The South industrial area attracted the greatest attention, partly due to the future movement of the port complex and the projected construction of a terminal. Prices have risen by 150 per cent since the turn of the year – from 40 to 100 euro/sq m. The district in Metro hypermarket’s vicinity exhibited a 43 per cent price hike, and plots in the West industrial area grew by 50 per cent. (They started at 100 euro/sq m in January 2007.)

The city zoning plan envisions a 50 per cent construction density and a building intensity factor set at 2.5. Large-area edifices, mall establishments, retail centres, and factories with environmentally-friendly production output are on the go, Ivan Trendafilov, Varna’s chief architect thinks. Brokers predict that appreciation of plots will go on in 2008 due to the region’s urbanisation. (Specialists remember that, after passing of the zoning plan, plots in Metro’s vicinity grew twelve-fold.)

The office market remained stable in contrast to the industrial one thanks to the good number of class A and B offices for sale and rent. To exemplify: prices of offices in central Varna rose from 1250 euro/sq m to 1350 euro, accounting for an eight per cent hike since the beginning of the year.

New settlements may appear, others will vanish due to the demographic collapse. There is reorientation in the demand from low-quality and cheap properties scattered around the countryside to gated communities with gardens and sometimes with private pools, brokers say. This trend is set by the clients who give prominence to the comforts and safety of the complexes. Moreover, these sites are sold key-ready which saves the buyer all the finishing works and the security guards guarantee the peace and quiet of the residents. Almost all such developments offer maintenance of the common parts as well.

Some of the developments are set among nature. The houses there range from 2 to over 100 depending on the area of the plot. However, if they are within the limits of a village or a town the optimal number of houses is from 2 to 5, brokers claim. Each house is sold with a private garden or with enough area that would guarantee the ‘breathing space’ of the residents. Such is the project near the village of Avren. Its first part, the so-called Lake House, has already been sold. In principle, the construction of the houses begins after a buyer shows up and lasts from 6 to 8 months. In the case of Avren the investor is a local entrepreneur and the clients are mostly Britons. The other type of development has 15-20 houses. They are built on large plots of land and resemble small holiday resorts. Such is the case with the project near the village of Lyahovo which is set 4 km from the Albena holiday resort and includes 134 houses. The main disadvantage of this type of development is the phased construction which turns the area into a construction site for quite a long time. This problem is overcome when the complex is offered for sale after being completely built. But such projects are a rarity because the entrepreneur plans to receive money from the already built sites and then continue constructing the others.

Prices of houses in gated communities range between 70,000 and 120,000 EUR for total built-up areas of 90 to 170 square meters, as they are set about 10-15 km from a well-known tourist region. The homes in very attractive areas, as is the Delta Hill development at the foot of the Vitosha Mountain, cost up to 250,000 - 300,000 EUR. Experts think that if the new holiday resort boom continues the developments may well appear on Bulgaria’s geographic map. On the other hand, some small villages nestled on the mountain slopes may vanish due to the lack of inhabitants.

City Market, 02.11.07

Pfohe Mall, the first mall in Varna, officially opens on December 1. Its occupancy rate exceeds 90 per cent, the specialised rental office of Foros National Real Estate Company announced. Foros owns the exclusive rights to let out all of Phohe Mall’s retail areas and has developed the project’s overall concept. Pfohe Mall has been classified as a Fashion/Lifestyle Mall, according to the International Council of Shopping Centres.
A constellation of popular brands, such as OVIESSE, Pierre Cardin, MEXX, Tom Tailor, Hush Puppies, KENVELO, Furla, Adam’s shoes, O’Neill, KILLAH, Patrizia Pepe, Enrico Coveri, Mariella Burani, Riccione, Rossignol, Quicksilver, Fila, and Oxxbow opted for renting an outlet in the mall. Among the tenants are:
· high couture leaders Purple, Galdini, Classic, Ariston’s;
· fast food giants McDonald’s, Nordsea, Coffee Republic;
· mobile service providers Globul, M-TEL, Vivatel;
· front-runners in the services sphere Piraeus Bank, United Bulgarian Bank, Alfa Bank;
· retail chains Technomarket and Perfect Home;
· entertainment venues Sesame casino and Galaxy bowling.

Find more information at http://www.pfohe-mall.com/