The main developers in Bulgaria continue to be local firms that have now gained significant experience in project development. But today, more and more international companies are also turning their gaze to the local commercial property market in search of a higher yield from their investments.

The German ECE Projektmanagement and the Hungarian TriGranit Development Corporation, which have already registered local companies, are among the latest preparing the launch of their projects.

Modern malls in the larger cities of the country, such as Sofia, Plovdiv, Varna, Bourgas, Stara Zagora and Rousse, as well as logistics centres and warehouse facilities, are serious niches for new investments.

In line with the Special Purpose Vehicles Act adopted in 2004, the first 10 REITs (real estate investment trusts) are now a fact.

In June 2005, Immoeast Immobilien Anlagen AG, a subsidiary of the Viennese stock-listed Immofinanz, which is responsible for Central and Eastern Europe, bought a 20-per cent share of the stock in noted Bulgarian real estate company TBI-BAC for 47 million euro. The company operates under the name Prime Property BG REIT.

Immoeast’s CEO, Dr Karl Petrikovics, explained this move, claiming that Bulgaria will become the next big “boom” market, a prediction that many market analysts share.

Despite the small volume of the managed funds, they are expected to contribute to greater transparency in the real estate market. These companies have diversified portfolios; some of them focus on the purchase of agricultural land, others are mainly orientated towards commercial property.

Regardless of the existing potential in many cities throughout the country, the capital Sofia still remains a priority city for the development of new schemes.

With its population of over 1.2 million people and the many foreign companies that constantly create new jobs and, therefore, need modern offices, the city can to a great extent be regarded as a country in itself.

It is a place where the standard of living, the purchasing power and the hunger for modern commercial buildings are much higher than in other Bulgarian cities.

* The Europe Real Estate Yearbook is printed in the Netherlands and is a product of the efforts of real estate researchers from many European countries. More information on the publishers can be found on www.europe-re.com.