Leading Sofia-based consulting firms have reported that perspectives for investments in industrial sites, warehouse complexes and logistics centres in the capital and the surrounding region have in fact "improved", because the crisis has had a substantially lesser effect on rent levels  compared to other types of business properties.

"In the current market, international investors can buy industrial property in Manchester at, say, 9.45 per cent, or say in London, that would generate annual yields of about 8.75 per cent, which results in expectations for 12-15 per cent for Bulgaria as a risk premium," said Mihaela Lashova, manager of Investment Sales in Forton International.

Alexander Gebov, executive manager of construction firm Paladin Property Development, which develops the largest logistics centre in Sofia, in the borough of Elin Pelin, near the Trakia motorway, has revealed that interest in such properties has remained stable.

"We don't suffer from any decrease of demand, in fact, currently we have increase in demand for over 75 per cent for the first phase of the capacity of industrial park Sofia East. The work is intense as we are developing also the auxiliary infrastructure, in and around the complex," he said, as reported by Stroitelstvo Gradut.

Sofia East Industrial park is a large complex spanning more than 40 000 sq m in area, encompassing warehouses, logistical and administrative facilities.

According to Gebov, the lack of financing for new projects is the main hurdle at the moment, but this also is potentially exploitable by firms who have reached advanced stages with the construction of their projects, as the tenants (companies who need the retail space) have less opportunity to construct facilities of their own and so are left with no other choice but to rent them out. This, in turn, has kept the market stable.

Source: propertywisebulgaria.