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Bulgaria's property investment volume more than trebles y/y to 67 mln euro in H1 - Colliers

Bulgaria's property investment volume more than trebles y/y to 67 mln euro in H1 - Colliers Image source: Pixabay.

SOFIA (Bulgaria), August 16 (SeeNews) - The total volume of real estate investments in Bulgaria increased year-on-year to 67 million euro ($67.8 million) in the first half of 2022 from 19 million euro in the same period of 2021, although it failed to attain pre-pandemic growth, real estate consultant Colliers Bulgaria said.

The completion of some transactions was delayed by the impact on the market of Russia's war in Ukraine, thus leading to a total volume reduction, Colliers Bulgaria, part of US-based professional services and investment management company Colliers International, said in a recent report.

By comparison, property investment deals generated 202 million euro in the first half of 2020 and 167 million euro in the first half of 2019.

The Bulgarian real estate market was dominated by local investors, a similar trend to 2019, although 2020 and 2021 saw a prevalence of international buyers.

In a trend expected to last, investors continued to focus on retail space, which accounted for 41% of all real estate investment deals, the Colliers report showed. Industrial and logistics space investments had a 23% share, followed by office space deals with 14%.

"The share of income-generating assets prevailed significantly - 67%, over properties bought for owner occupation, 24%, and speculative ones, 9%. The total volume contraction explains the particularly high share of the first asset type," Colliers noted.

In terms of yield on investment, office and retail space and industrial and logistics space retained their respective end-2021 levels of 7.75% and 8.5%.

Several large transactions are set for completion in the second half of 2022, which - together with a projected pick-up in foreign investments share - is expected to boost Bulgarian property investment volume to its usual levels of between 200 million euro and 250 million euro per year, the real estate consultancy added.

In the short term, the recent interest rate increases by the US Federal Reserve and the European Central Bank (ECB) are likely to cool down the market and slightly lift the investment yields, even though at present sellers tend to compensate for inflation in setting their prices.

($=0.9875 euro)