INTERVIEW – Austria’s Sparkassen Immobilien Plans 12 Mln Euro Office Building in Bulgaria

The real estate group believes that the property sector in the country still has room to grow in certain segments though it was severely hit by the global economic downturn.

“We will see big supply of spaces next year and perhaps the year after, but then nothing and that is the reason that we see that the demand is here and there will be companies recovering and investing and looking for modern space – on the retail sector, on the hotel sector and the office sector,” Sparkassen Immobilien board member Friedrich Wachernig told SeeNews in an interview.

“We have bought another plot in Sofia as well. […] It will be a small office building with just 5,000 square metres. It is a reasonable size,” Wachernig said.

“We do have the money, we do have the financing for it and as soon as it gets building permit […] it will start.”

Sparkassen Immobilien has secured own financing for the project, Wachernig added.

In Bulgaria, the group together with ECE Projektmanagement, a European developer of inner-city shopping malls, is developing a 210 million euro shopping and office centre. The Serdika Centre has a designed built-up area of 167,000 square metres and will accommodate over 53,000 sq m of retail space, 33,000 sq m of offices and 1,600 parking lots.

“We are very optimistic that we are going to open the Serdika Centre 100% rented out in the spring of next year […] Everything is very much on track,” Wachernig said.

The Bulgarian real estate market thrived between 2003 ad 2007 with local and foreign investors drawn by expectations for high yields after the country's accession into the European Union in 2007. The global financial crisis, however, cooled down the speculative mood in the market and has led to portfolio restructurings.

“Sofia is hit by the global crisis but for sure there will be growth in the next years which is much higher than in the Western European region and that is the reason why we are definitely going to invest in the next decades in the Central and Eastern and also in the southeastern European region,” said Wachernig.

He believes that the real estate sector in Bulgaria will recover “definitively in 2011”, after the revival of financial markets.

“Then we have the year 2011 when every industry, many companies will have rethought of their strategies,” he said and added that financing will be available and new investment plans will be announced in that year which will help the sector.

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