Real estate - Trends 2007 In recent years the economic upswing in the country is largely determined by the surge in real estate and related industries - construction, production of building materials, tourism and trade. According to the statistics of those sectors account for 35% of foreign investment over the past five years. For the first quarter of 2006 Investments in real estate are determined to around 300 million Euro, as throughout 2005 on are nearly 410 million euro. Trends in the development of the real estate market at international level International real estate agency "Knight Frank" account of delay in growth of prices of real estate worldwide. According to the survey covering 32 countries in the world, Bulgaria occupies second place in a slumping property during the third quarter of 2006 According to the survey between July and August prices of properties in the country have increased by 19% on an annual basis, compared with the registered for the same period of 2005 increase of 32%. According to NSI indicators were 14% for 2006 (third quarter) and 32% for 2005 (third quarter). Latvia holds first place (growth in prices was taken to the capital Riga) - Real estate prices are poskapnali with 39.2% in the third quarter of 2006, which is a slowdown in the growth of prices, which for the same period of 2005 was 65.9%. Thirdly Denmark ranks with the growth of prices in the third quarter of 2006 by 17.8%. Immediately after it is Lithuania - 15.5% and Ireland - 15%. The trend for the third quarter of 2006 is a significant delay in the appreciation of properties. The survey indicates that the greatest increase in prices of properties in European countries, which hold nine of the first ten positions in the ranking of 32 countries surveyed. Trends in the real estate market in Bulgaria With the stabilisation of the national economy and the introduction of large investors as any other industry, and the market for real estate in Bulgaria is developing and confirms its position as one of the most dynamic markets in Europe. Estimates for the development of the Bulgarian market of real estates are numerous. According to analysts from the international consulting agency for the purchase of real estate "Assetz International Ltd", the prices of properties in our country are still among the lowest in Europe, with the country's entry into the EU and good prospects that lie before the Bulgarian economy in the medium and the long term, this moment is very suitable for operation in this market. According to a published study of the agency has good prospects to the property in tourist resorts, big cities and the capital of the country. The company indicated that the average growth of tourism in our country is 22% on annual basis over the past five years. Among the main advantages in the sector in our country and indicates the creation of a stable market for the resale of property that provides the opportunity for return on the investment. Analysis of the Agency for Real Estate Burgas "shows that the number of transactions in property in 2006 is located 261 000, as compared to 2005 on growth is around 10%. After burnoto development of the market in 2004 -- 2005 on, in 2006 observed some stabilization, as the average increase in prices of properties in Sofia is between 10 and 20%. For some properties observed spike in prices by more than 100% - these are properties in prestigious areas of the capital, commercial sites, building plots. For Sofia throughout 2006 on observed increased demand from foreign investors and bulgarian of residential properties in attractive peripheral areas of trade and logistics centers, office buildings, hotels and land for building them. Outside the capital as the most promising areas for investment in real estate are determined Black Sea and mountain resorts, villages with mineral springs and opportunities for balneotherapy, which is looking for land to build hotels and holiday villages and residential buildings whose apartments are sold more of green. The interest of big investors will increasingly be directed to: * Investment in commercial properties: o Building and renting office buildings class "A"; o Building and rental of commercial centers in Sofia and in major cities of the country; o Construction of logistics centres. * Investment in industrial estates. * Investments in tourist sites: o Projects related to the construction of balneological and spa centers; o Projects related to the construction of small hotels and holiday villages in the still under-developed locations. * Investment in housing: o Building complexes of "closed type" in suburban areas. According to representatives of leading real estate agencies in Bulgaria during the first half of 2006 business properties were "crest of a wave". According to the National Association Real estate over 50% of turnover in the market of commercial properties in 2005 due to transactions with the office area. It is estimated that a total of three kinds of commercial properties - commercial, industrial and office, it amounted to over 1 billion euro. Increasing popularity acquire modern office centers are gradually building up in cities of the country. Forecast data on the supply of offices of high-end (Class A) in 2006 show an increase by over 50% and the emergence of some prenasishtane market in this segment. Bulgarian Investment Agency predicts that the interest will be directed to the offices of type B intended mainly for Bulgarian companies which follow the trend for the release of offices located in residential buildings (evrostandartite for working conditions are stringent) and move into business centres. Although luxurious offices offer two to three times higher rents, their demand is growing especially at the expense of the offices in Class C. Estimates are that the overall price of a top rent of office products segment will increase. According to "Fortan International, which is an associate partner of Bulgaria, Serbia and Macedonia of" Cushman & Wakefield Healey & Baker "(world leader in the field of business properties and offering advisory services in real estate), specializes in serving on business property and consultation, the profitability of investments in the office area is currently about 8-9%. An increasing percentage of the volume of investment in property transactions, has a commercial-razvlekatelnite centres. The main factor affecting the development of this segment of the market is the development of trade worldwide. Last year (2006) may be defined as the year of shoping molovete. Hit are commercial centers in Sofia (Sofia City Centre, Mall "Sofia", "Sky City" shopping center "YouTube") and other major cities in the country ( "Central mole" in Veliko Tarnovo, is the construction of moles in Plovdiv and Varna - as reported by "Fortan International over 65% of the areas in Mole" Varna "are already employed and they have signed preliminary agreements). Estimates are that 2007 g. will be the year of usilenoto construction of luxury shopping centres, in which world marks neprisastvali so far on the Bulgarian market. The trend of recent years shows strong investor interest in locations outside the capital. Representatives of some retail chains believe the risk of prenasishtane with moles and there is potential danger from lack of tenants. But according to investors in both Sofia mola - MALL "Sofia" and "City Center Sofia", and "Central mole" in Veliko Tarnovo, has achieved a very high percentage of zapalnyaemost of areas during the very construction of buildings. The emergence of commercial centers in the capital showed a trend of decrease in rent of shops in the central commercial streets (Blvd. Vitosha employees such as prices decreased levels of 120-130 euros / sqm. To around 80-110 euros / sq.m . m.). The three mola offer over 300 shops with about 58 000 sq.m. Pure commercial area. Rent of commercial premises there moving below 20 euros / sqm. for key tenants of buildings with an area exceeding 500 square meters and 50-65 euros / sqm. for sites with an area to 100 square meters Such a trend of lowering rent in the central commercial part is expected in Varna with the first appearance of moles. One of the biggest advantages of investment in commercial buildings are traditionally high and selling their rental price levels compared to other segments of real estate. The experts in the industry trade sites are identified as the best investment product in time. Their rental income in Sofia is about 9% (2006), but is defined as greater in other cities. The return on investment in the first commercial complexes ( "City Center Sofia," MALL "Sofia", "Sky City", "Central mole" in Veliko Tarnovo) is around 10%, but forecasts suggest that the profitability of the projects are currently in construction will fall to 8.5%. According to "Cushman & Wakefield" molovete of profitability in Europe is between 5.5% and 6.5%, as these levels already achieved in the Czech Republic, Poland and Hungary and rarely exceed 8.5%. At this stage Blgariya is defined as one of the countries with the lowest levels of established commercial areas per capita. In other countries the EU average rate is 171 sq.m. in 1000 people, and in our country this rate is 64 sq.m. in 1000 people. On the real estate market in our country already navlyazoha item called commercial parks - complexes of hyper and supermarkets. Located in the periphery of cities offer lower rents compared with molovete and commercial streets. These are food chains, IT centers, chain-type "Hints and tips, furniture chains. Commercial chains, which have large individual buildings contribute to the formation of another niche of the real estate market, as t. called construction measure. On this principle be constructed shops of Praktiker, which is one of the commercial chains, which are rented. Each chain relies on large areas of service, so we made our first steps in the capital Sofia and used as an invasion tramplin for the rest of the country. Essential to locate objects of trade and transport access options for parking. Although commercial chains operating in a competitive environment, there are processes that forcing them to pool their efforts to create commercial centers. Ie one territory began to work on several commercial stores in different chains. Estimates are that up to several years in our country and will appear in stores by category autlets and riteyl parks. Typically, these centers are not as luxurious, they are in the suburbs of the city and placed in large areas of lower rental prices. Expectations are for rent between 5 and 20 euros / sqm. Preconditions for the realization of such projects are okrupnen availability of land and the land price below 50 euros / sqm. Increasingly gaining speed the process of building a modern industrial parks in the country, which are a new segment of the market. According to representatives of Fortan International this process will grow with the entry of institutional investors in the sector and shifting the capital to the industrial and logistics projects. The Bulgarian market of real estate logistics centres, unlike the commercial and office centers still are not as popular. The trend is that with the stabilisation of the economy, with the development of production and trade, the interest in a similar type of property will increase, especially by the large retail chains (on timely delivery of goods transportation, good storage conditions). The experts, at present the objects that meet the highest grade storage areas are few and the rent is inadequate to the needs of the market. But all are categorical that the development of a segment of logistics and property is yet to evolve over the next two, three years. Prerequisites for this are the geographical situation of the country, the introduction of new companies in the market, the removal of production in Eastern Europe. At this stage, however, Bulgaria still lags behind in Romania, Greece and Turkey. The development of this segment of the market is hindered largely by the lack of large vacant parcels, the adoption of European standards, poor infrastructure and the fact that markets in Eastern Europe have not yet been opened. Some of the most important centres are distributivni Brno and Prague in the Czech Republic, Budapest in Hungary and Gyor, Poznan, Lodz, Warsaw and Katowice in Poland, Bratislava in Slovakia. The development of these cities is the basis for expansion of distributivnite locations in south-eastern direction. According to international consulting company "Colliers International" constructed new logistics centers have a total area of 166 000 square meters, located in Sofia and Plovdiv, where there is already exported products of Western companies. In the capital of about 300 m from the new Sofia airport is currently under construction "Sofia Airport Center" - the largest project in Bulgaria in real estate, which will be the first complex of buildings for logistical activities, facilities for industrial purposes, offices and hotel. Close is being constructed and Tehnopark Sofia, in which concept enshrined grouping of companies in the field of IT technology. The park will have offices, manufacturing facilities, storage areas, laboratories and workshops. Estimates of specialists in the industry are, in the coming years, large production and storage facilities will be exported outside the cities (usually at a distance of 20-25 km). Deployment of industrial zones in suburban lokatsiii allows for flexibility in expansion or shrinkage of the company. Essential is the location that should be close to major European transport corridors, to have quick access to the airport or port and well developed infrastructure. Problem construction of logistics centres is the lack of large plots and many investors withdraw their projects outside Sofia. For the country suitable areas for construction of this type of objects are the sea and river (Ruse, Silistra, Lom) ports. Plovdiv is formed around three industrial zones-logistics - Rakovski, Kuklen, Maritza. Industrial bases be constructed in areas around Pazardzhik and Stara Zagora. Central and Northern Bulgaria as a suitable area taking shape Gorna Oryahovitsa. The lack of modern land leads some companies to invest in construction of their own homes. Thus was built logistical centre of speditorskata company "Frans Maas" and that of the German transport company "Willi Betz". The main danger to the establishment of a logistic center is the percentage of zapalnyaemost with tenants. Expectations of most experts is that much of the companies will focus on areas for rent, using the advantages of logistics centers - lower rent, good location, or possibly a closer connection with another mode of transport, significantly larger areas and allowing access room for manoeuvring of heavy vehicles, enabling the business to change according to their needs, companies the opportunity to combine its distribution facilities with its central office. Important is the possibility of using a wide range of additional services. Employees prices in the new industrial buildings moving from 3.8 to 5.5 euros / sqm., The price depends mostly on location and transport services area. The highest prices are determined in Sofia and Varna. The forecasts are in the coming years the prices to remain stable. The return on investment in industrial property is defined as the highest in our country - reaches 12 percent or more a year (data for 2006), which together with the lack of established modern industrial and logistics centres are the main factors attracting investment interest - mostly foreign companies. In 2006, housing market, where in recent years nalyaha large investment is a stagnation. During the first quarter of 2006 apartments in the country are poskapnali average 4.7%, which is symbolically increase compared to last three years. According to NSI in 2005 prices of apartments have increased by 36.6%. Since the beginning of 2006 is a smooth increase in the prices of properties in 7-10%. One of the lowest levels are those in Vidin, Vratsa, Gabrovo, Kyustendil, Lovech, Montana, Pazardzhik, Razgrad, Silistra, Dobrich, Targovishte, Yambol. High prices keep nedvizhimostite in Stara Zagora and Blagoevgrad. At this point in the larger cities of the country as Sofia, Plovdiv, Varna, Burgas house price limits vary widely - from 400 euros / sqm. in the final quarters to around 1500 euros / sqm. for the elite. Luxury apartments start at more than 900 euros / sqm. And those in the resort complexes in the Black Sea - from 1000 euros / sqm. up. For top places in Sofia and Varna prices reach between 2200 and 3300 euros / sqm. But in massive case of a luxurious estate prices moving from 1000 to 1500 euros / sqm., Which are priced mostly in Sofia and Varna. In other cities, these values are lower. The trend is that house price gradually in our country will be close to European prices. According to representatives of real estate agencies house price in 2007 will grow smoothly, the forecasts are for 10-15% increase, but will be influenced by the characteristics of each property. Expectations are that will increase the value of luxury properties in attractive locations, a supply of flats in new residential buildings are a type of "storey property" in not particularly attractive areas and apartments paneled buildings would exceed demand for these properties not expected increase in prices. The development of the market in 2006 shows that increased demand for independent houses in the vicinity of the towns. Increasing popularity acquire complexes of closed-end or so. VIP complexes. Experts forecast that they are current on the market in the coming years. Mass construction of sea and mountain resorts in recent years, depletion of suitable land and organised protests gradually nasochiha investment interest in a new alternative - the holiday properties in podtsenyavani to date and poorly developed area along the Black Sea coast and the interior of the country. According to brokers the focus of investors is drawn to holiday villages in the once unpopular resorts. Prepostavka investment and increased demand for this type of property is the presence of good infrastructure, proximity to a major city, natural resources - mineral springs, mountains, rivers, dams, built ski slopes, golf courses, the ability to combine several types of tourism -- Eco, rural, etc. This category has already come and rural properties, which are an alternative to both villas and holiday complexes. As an attractive place with potential for development taking shape destination Razlog-Bansko-Gotse Delchev-Kavala (the villages of Banja and Dobrinishte, where prospects for development of golf and spa tourism). Opening of the border "Eksohi - Ilinden and lower prices of properties in this region (especially in Gotse Delchev) and attracts the interest chuzhdestanniya (mostly Greek). Attractive villages in the region are Delchevo, Leshten, Kovachevitsa, Ognyanovo. Dobarsko is one of the villages known to the general name Pripetsite. Hissar, and Devin Tour is formed as the new locations of real estate market in attracting investment interest. Construction in Velingrad is mainly aimed at building and renovation of hotels, after the city in recent years developed very rapidly in the spa tourism. There are the first projects for the construction of holiday villages. More and more houses are searched by zapazaen antique style. Among some of the most villages are Stoikite, Gela, Shiroka Luka in the Rhodope Mountains and Arbanassi near Veliko Tarnovo. Favorite places for the purchase of houses are Tryavna, Troyan, Apriltsi, Borovets, Koprivshtitsa, Zheravna, Elenskiyat and Gabrovskiyat Balkan, which have saved the authentic Balkan style. Near Sofia (except vitoshkite villages) as the most promising are determined pernishkite Kladnitsa (begin building a holiday resort), and Dragichevo Rudartsi. Inside the country to build holiday villages in the villages and Markovo Belashtitsa (around Plovdiv). With well-established infrastructure and natural resources attract attention around the villages of Pazardzhik - Varvara and Vetren dol. New complexes to be constructed near the village Ribaritsa, Dolna Banya, Borovets, Pamporovo and surrounding villages. According to foreign experts from industry and bulgarian investors showing strong interest in purchasing houses and even whole villages in the Rhodopes zapusteli. A precondition for this is the opportunity to build complexes of closed-end. The prices of similar properties are still well below the average for the country - around 160-170 euros / sqm. One of the most expensive in the region are the houses near the lake "Sea", their price rose to 330 euros / sqm. The highest prices of the houses are close to Pamporovo - new houses in the area reach 1100 euros / sqm. For more starinnite sites in the area, prices are around 100-160 euros / sqm. Estimates of local brokers are that strong interest (mostly foreign) in search of Rhodope houses are expected in the spring and summer of 2007, which reflected in the prices of the properties. One of the most attractive holiday villages in the Black Sea is Kosharica (near Sunny Beach). The price of holiday houses there moving around 850 euros / sqm. Holiday settlements be constructed in Ravda, in the village Bathroom (at bay Irakli), to Information, to Cape Kaliakra, near Byala and future golf courses around a golf course. Development potential and has a destination on the Danube. New emphasis on the real estate market submit tenders for the purchase of properties abroad. Almost all representatives of companies from the industry indicate that this segment of the market moves difficult. At present the most attractive places for investment in residential property are determined Dubai (2500-3000 euros / sqm. Vary lower price classes of data in "Address Real Estate") and Cyprus. According to "ERA Real Estate" in London the average price of housing 80-85 sq.m. is about 4200 euros / sqm. in Paris - 3500 euros / sqm., in Vienna - 2700 euros / sqm. Holiday properties abroad are other segment representing the interests of foreign investors in Bulgarian property - especially those in Spain, Portugal, France. Is still difficult to define trends for the development of the property market abroad. It is considered that with the introduction of the Bulgarian market of global brands in the marketing of Bulgarian properties as "RE / MAX", "Century 21" and "ERA" supply of foreign property in our country will expand. But at this stage the main factor moving this segment is the presence of significant financial resources. Foreign interest According to representatives of the sector along with well-established markets in countries such as Poland, Czech Republic, Hungary, Turkey, Cyprus, Greece, Portugal, which offer very attractive opportunities, Bulgaria forms as novovaznikvashta investment destination. With the largest presence of the real estate market in our country are distinguished British buyers. The focus of foreign interests fall mostly holiday property or items called housing "second home". According to a survey conducted in "Grant Thornton" and "Lombard Street Research", Bulgaria ranks fourth position after Spain, France and the United States among the most preferred countries from British to purchase such housing. According to the survey over 300 000 British citizens have property type "second home" abroad, as compared to 1995 on growth is over 300%. Expected in 2025 on around 1.3 million British to hold property outside the country. Bulgaria, Romania, Hungary, the Czech Republic are the countries which increasingly fall into the center of their interests. According to rating the British magazine "A Place in the Sun" (published in imoti.net as reported by Investors BG), the country ranks third among the emerging markets as the most preferred investment in properties by the British after the established markets Spain and France. Strong interest in the holiday rentals and show the citizens of Russia, Spain, Latvia, Lithuania, Greece and Macedonia. The main factors attracting foreign interest is growing more rapidly razvivashtiyat market of real estate, lower prices, increase the number of creditworthy customers, in cheapest way of life, climate and environmental resources. Realization of real estate