Growth in the European commercial real estate market will accelerate over the next two years, which in turn will benefit Bulgaria by creating more favorable conditions for foreign direct investment, said global commercial real estate advisor Cushman & Wakefield and its alliance partner in Bulgaria and Macedonia Forton at a press conference in Sofia.
The two companies are strengthening their alliance. Forton rebranded with the aim to achieve stronger recognition as well as to increase the confidence of international investors and corporate clients in Bulgaria.
“Europe has the eye of the world“, said Peter Victor, Senior Managing Director of Cushman & Wakefield for EMEA and Head of International Desk. „Investment demand is growing to new regions and sectors while the interest in development increases. ”
According to the latest data, Bulgaria’s investment market reached €114 million year to date, in a total of 26 transactions and is now 54% above the reported volume for the entire 2013, said Forton.
“We see a considerable increase in demand for land as well as for office and retail space with potential for revenue increases after successful financial restructuring, additional investments and the attraction of new occupiers”, said Michaela Lashova, MRICS, Managing Partner at Forton. “What is more important however, we have experienced a stable growth in occupier demand for office and retail space. This gives greater confidence to international investors who are expected to show higher levels of activity in the following months.”
Compared to the boom years for the commercial real estate markets in Central and Eastern Europe up until 2008, higher growth rates from 2015 on are expected to be a result of not only capital flows to real estate but also to other, non-financial parts of the economy. “Business process outsourcing and a trend for nearshoring of manufacturing activities will bring numerous benefits to Central and Eastern Europe”, said Peter Victor. “The CEE markets will see growth in demand for commercial real estate, but nevertheless they still have relatively higher levels of supply to absorb,” he noted.
Bulgaria is considered to be in a favorable position to capture a good deal of the demand for new locations for BPO activities and shared service centers. According to Cushman & Wakefield, Bulgaria
The emerging trends of globalization and development of online sales channels in the retail industry are causing a shift in focus towards prime markets and locations. Meanwhile, technology presents an important opportunity for quick access to new markets. The end results hence are the more rigorous requirements for new retail projects.
"The supply of retail space now depends not only on construction but also on the closing of existing projects,” said Michaela Lashova. "The retail market is in the process of recovery and it is occupiers that still set the rules. In recent months, several new shopping centers were released on the market proving that there is still room for professionally planned and managed projects. "