January 9 (SeeNews) - Bulgaria's property investment market is expected to be driven by demand for premium office space in 2018, commercial real estate consultants Forton said on Tuesday.
"After the sales of large shopping centres in 2017, the investors' focus is now moving towards the office space market," Forton said in a statement.
Deals in commercial properties in Bulgaria totalled 1 billion euro ($1.19 billion) last year. The largest among them was the sale of Sofia's Paradise Center Mall to South Africa's fund NEPI for 252.9 million euro.
"We had a very active market last year. However, we still do not see investment interest similar to that of the Central European markets," Yavor Kostov, manager at Forton, said in the statement.
According to Forton's forecast, in 2018 the Bulgarian commercial property market will not reach the volume of the previous year due to the limited supply of premium assets.
The office space market, which recorded rental deals for a total of 198,000 sq m in 2017, is the most active. The figure is unprecedented for the Bulgarian market and is a result of strong demand from both IT and BPO businesses and due to the completion of large first-class projects that meet the needs of tenants, Forton noted.
In 2017, nearly 116,000 sq m of new office space were completed. A further 178,000 sq m are planned to follow this year, with over 40% of the space already rented out.
Two new shopping centres are expected to open in 2018 - Delta Planet in Varna and Plovdiv Plaza in Plovdiv - on the back of growing individual consumption and the willingness of brands from the medium-range and budget price levels to expand outside of the capital Sofia.
On the industrial property market, expansions to several large logistics projects are expected to be completed in 2018 and add about 50,000 sq m of space, which will drive rental activity, according to Forton.
Forton is a commercial real estate advisory company, a subsidiary of Bulgarian real estate company AG Capital. It is also a member of the Cushman & Wakefield Alliance in Bulgaria.
($= 0.838 euro)