Seventeen years after the fall of communism, restitution issues continue to cause tension.
The most recent example is a case in Sofia where owners of property neighbouring Sofia’s seventh school have restitution claims to 250 sq m of its playground. The neighbours of the school have made several previous attempts to take ownership of the disputed land, Za Grada website said. On July 22 this year they cut open the door of the school, entered the courtyard with a digger and started taking down a wall. About 300 students and teachers from the school gathered at the demolished wall on September 17. Yordanka Fandakova, the deputy mayor in charge of education, said that mayor Boiko Borissov would recommend to the municipal council to amend a 1993 order giving the neighbouring owners rights to part of the school playground. Borissov wanted the municipality to give him the right to represent the interests of the schools in court, Fandakova said. She promised the support of the municipality in the school’s attempt to apply for EU funding to restore the facade of the school and the demolished wall. Students made a wall out of cardboard boxes, on which the text in protection of the seventh school was written.
Meanwhile, Raiffeisen Leasing (RL), owned by Austria’s Raiffeisen Zentralbank Oesterreich AG, launched real estate hire-purchase schemes targeting foreigners. According to Bulgarian publication Dnevnik daily, one of Latvia’s largest lenders, Trasta Komercbanka, also unveiled plans to join in the race. Raiffeisen Leasing’s hire-purchase schemes run up to 15 years and require 30 per cent to 40 per cent co-payment from the buyer. The leasing of property in rough construction comes with a grace period of up to 12 months.
Trasta Komercbanka plans to open its first representative office in Bulgaria in the Black Sea resort of Slunchev Bryag (Sunny Beach).
The new outlet will loan-finance Latvian investors who want to buy properties on the Black Sea.
Borrowing money was the natural choice for UK-based real estate developer Bulgarian Property Developments (BPD) in its attempt to build a logistics centre near Varna on the Black Sea. On September 18, BPD subsidiary Varna Logistics said that it had borrowed 22 million euro to finance its logistics centre project in Varna.
“The loan is for a term of three years, with the option to extend it once the development is completed, and is sufficient to cover 88 per cent of the anticipated costs of construction of the development,” BPD said in a statement to the London Stock Exchange. The lender is Bulgarian commercial bank Unicredit Bulbank. Varna Logistics is a 50:50 joint venture between BPD and Bulgarian FairPlay Commercial, which is wholly-owned by real estate developer FairPlay International. The company owns the 132 500 sq m Varna Logistics Park in Bulgaria’s second-largest city of Varna.
“BPD, together with FairPlay Commercial, has planned a mixed use development providing approximately 80 000 sq m of modern warehousing and mid range offices, together with trade showrooms,” BPD said in the statement. Construction started in March and the first warehouse is expected to be completed and fully let by the end of this year. The total investment in the project, to be completed in three stages, was estimated to exceed 51.1 million euro, BPD and FairPlay said earlier in a joint statement.
The 50:50 joint venture plans also to invest about 60 million leva in a trade and residential building in the country’s second largest city, Plovdiv.
FairPlay International and BPD also own 38 per cent each in a 30 million leva trade and residential project in the northern city of Pleven, which should be launched in mid-2007 and will be completed in two years. Bulgarian-registered construction firm Sofia Estates owns the remaining 24 per cent in the joint venture.
Meanwhile a newcomer is on the horizon. Again the UK is the source of interest. London-based real estate investment management company AXA Real Estate Investment Managers (AXA REIM) is considering entering Bulgaria and Romania.
The company would focus on retail, office and logistics projects in the Black Sea neighbours. According to company officials, the logistics segment was the most attractive because of increasing demand among limited supply.
