CB Richard Ellis: good outlook for Sofia office space market
Despite the effects of the credit crunch and forecasts for an overall slowdown in economic growth, Bulgarian GDP defied the expectations of economists by achieving 7% growth in the first quarter of 2008, real estate consultants CB Richard Ellis said in an H1 Sofia office market overview.
Bulgaria remains attractive to international companies that outsource and offshore parts of their activities to the country, driven by the availability of well-educated and experienced specialists at lower salaries as compared to all of CEE, Western Europe and the U.S., as well as the low corporate and personal income taxes (both 10%), etc. Therefore, according to the report, Sofia’s office market will continue to develop actively at least in the next 2–3 years.
Office space completion in H1 2008 set a record, with completions coming in at levels of over 87% of all completions in 2006 and 58% of all completions in 2007, said CB Richard Ellis. As a result of this large amount of completions, Sofia now has modern office stock of approximately 808,000 sq m. This number will continue to increase, in view of more than 250,000 sq m scheduled for completion by the end of the year.
That said, the consultancy doubts that all announced office projects will actually enter the market by the end of the year. Approximately 250,000 sq m office space are scheduled for completion by the end of 2008. Nevertheless, CB Richard Ellis expect that no more than 150,000 sq m will actually enter the market by the end of the year. Another 500,000 sq m are expected by the end of 2010, to make the total pipeline approximately 750,000 sq m.