PROPERTY BULGARIA INFO

Monday, November 5th, 2007

Prices of industrial plots in Varna mark record-breaking growth

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.