Why investing properties in Bulgaria

Investing in golf properties in Bulgaria haven't been a likely opportunity for UK investors in the past, but things has changed so we provide an overview of Bulgaria and its culture.

Why invest in properties in Bulgaria?

Bulgaria is a small country rich in ancient culture, scenic beauty and endless charm.

The country is situated in south-eastern Europe and it occupies the central part of the Balkan Peninsula. Its northern border with Romania passes along the Danube and its eastern border is the Black Sea.

One of Bulgaria’s biggest assets about investing in properties is its tourism trade, with stunning coastlines, great golf courses and an incredible mountain range, making the country extremely popular all year round.

Bulgaria also has around 600 natural mineral springs, and the baths and health spas are frequented by locals and scores of international tourists. Although the facilities need to be updated, the spring water in Bulgaria is rich in minerals and flows freely from a natural source.

Bulgaria is a country steeped in history and contains nine UNESCO World Heritage Sites, like the ancient city of Nesebar, which is an eclectic mix of cultures, including Thracian, Greek and Roman, as well as being one of the most important centres of sea-borne trade in the Black Sea.

What is the weather in Bulgaria?

As Bulgaria has such a contrasting landscape, from the snow-capped peaks of the Balkan Mountains, to the sunny Black sea coast, the climate tends to be variable.

In general, the weather in Bulgaria is typically Mediterranean, with hot, dry summers and cool, wet winters, particularly along the coast.

Dan Johnson, Managing Director, comments:

“Bulgaria has preserved its tradition and embraced modern times by brilliantly balancing ancient values with new ideas, making it a country that offers something for everyone.”

Risks for the owners of properties in Bulgaria

Dozens of people become victim of the so called real estate mafia in Bulgaria every year, losing their properties in their desperate need to get money cash as soon as possible. But the results are shocking - the owners pawn flats or houses, whose value is set at hundreds of thousands Euro to receive some half of this sum immediately. Besides such "services" are at a high rate of interests.

Of course, everybody, who takes such a risk, hopes he is to get his property back right after he pays off his debts. But often that is not the case... At least not in Bulgaria...

Police probes proved that some owners of pawnbroker's have up to 15 properties registered in their names. Contracts however show that these flats have actually been pawned and according to the law they should not be transferred to the "brokers".

Suspicious foreign jobbing-houses, taxi drivers, change bureaus or Bulgarian nationals, who work abroad often play the roles of such "brokers". They even use forged documents to sell to ordinary people mortgaged properties.

Only 500 out of about 1400 jobbing-houses are legally working. The rest perform such activities without paying any taxes or insurances to their employees.

In most of the cases, police authorities and prosecutors could do nothing to help the situation when a fraud is uncovered as the cheats enforce their rights through misleading contracts, signed by the victims themselves. There follow endless lawsuits, which take no effect. Meanwhile the properties are sold to one or more other buyers.

The scheme that works flawlessly on this "market" is as follows: a cheat takes on a flat in a big residential building in the capital city of Sofia and pays in advance the rent for the next few months without signing a contract, which contains his personal data. In a while, an advertisement is published in the press, saying the flat concerned is for sale as the price is extremely low. The sell of course is to be carried out without the help of an estate agent. The false "owner" receives 10% of the property's value as a deposit from each of the candidate-buyers and nobody is able to find him anymore.

The other way of committing such frauds is to take on a real estate property, prepay the rent for the following few months without signing any official papers, taking the notarial act from the owner, making a copy, which is later used for "letting out" the house to other people.

Every year Bulgarian authorities are being tipped off on more than 20 cases of frauds related to sales and purchases of real estate properties, Economy police Inspector Gratsiela Petrunova announced recently.

"There are several organized rings that commit such crimes in the country," the official added.

Economy police experts found out that notaries are often involved in such crime schemes.

The criminals usually get the personal data of the potential victims in advance, authorities reported.
by "Darik Radio", Nikolay Hristov

Foreigners increasingly interested in BulgariForeigners increasingly interested in Bulgaria’s spa property destinationsa’s spa property destinations

The interest of foreign investors in the acquisition of property located in areas having mineral springs is growing, consultants from Home for You said.
Velingrad, which has already established itself as a spa destination, is growing in popularity. Research shows it is among the top destinations for both foreign and Bulgarian investors.
Agents said that Velingrad had the potential to develop into a European resort and into one of Bulgaria’s best spa resorts.
Foreigners also continue showing interest in vacation property in Bulgaria’s coastal resorts. Mountain vacation property also registers interest, which tends to be strongest towards rural developments.
Italian, Spanish, Austrian and German investors are showing increasing interest in property acquisition in Bulgaria. Scandinavian investors are also growingly attracted to property in the country.

Information Source: Sofia Echo

Property market developments in Bbulgaria unpredictable in first half of 2007

Predictions made for property market developments in the first half of the year failed coming true. The market saw dynamic developments and turned to be one of the fastest evolving segments. Price hike went beyond expectations, making agents unable to predict future growth. In the first half of the year, one and two-bedroom apartments registered the biggest price increase. The growth, however, is specific for each district and average estimations cannot be made. New construction is responsible for the varying trends, especially in Sofia. If a district sees a number of new two-bedroom apartments, owners of older such property try to sell it at prices similar to the ones for newly built apartments. Bulgaria’s bigger cities saw residential property price increase of seven to eight per cent. In general, property located close to the city’s centre gained more in value.

Information Source: Sofia Echo

Property investment returns rate ranks Bulgaria second in Europe

Bulgaria ranks second in Europe on the returns rate of property investment over the past 12 months, research of British consultancy company Assetz shows.
According to the company’s index, drafted each annual quarter, Bulgaria’s property investment returns reached 71 per cent over the past 12 months.
Poland ranked first with 100 per cent returns.
Assetz warned potential investors that the rate in Bulgaria was expected to decrease significantly.
Regions featuring over supply like Sunny Beach coastal resort and Bansko winter resort already experience problems with their rental markets.
Bulgaria is the only European country listed in the ranking, for which Assetz expects such decrease in returns.
Poland will also experience decrease, though it will be smaller compared to predictions for Bulgaria.

Information Source: Sofia Echo

Real estate fund to invest 200 million euro in Bulgaria's Varna

Investment fund Orchid Development Group will invest nearly 200 million euro in three projects in Varna by the end of 2007.
The fund received a first class investment certificate for its Grand Mall project in Varna.
The other two projects focus on the construction of an office building with a total area of 25 000 sq m and a complex of mixed type having residential part, offices and trade centre. Its gross built-up area will total 60 000 sq m.
Grand Mall will be located near the bus station in Varna. The company bought the terrain in 2006 for 12.7 million euro. Its gross built-up area is 150 000 sq m. Orchid said that this would be the largest complex of mixed type in Varna and among the largest ones in Bulgaria.
Construction works are to be completed by 2009.
Orchid has invested more than 100 million euro in Bulgaria. It owns and manages several Black Sea hotels and currently works on two residential projects in Varna and Sofia.
The company's chief executive Ofer Miretzky said that the investment was worth it because the company bought the terrains three years ago at lower prices.

Information Source: Sofia Echo

Industrial property market in Bulgaria underdeveloped - report

Industrial property market in Bulgaria is poorly developed as property supply meets 60 per cent of demand.
Most warehouses, production facilities and logistics centres offered on the market are old and in bad condition while prices fail complying with market criteria, Pari daily reported.
Monthly warehouse rent in Sofia vary between 3.5 euro and 4.5 euro per sq m and sales prices between 450 euro and 500 euro per sq m.
The report said that a good opportunity for long-term renting is municipal property due to low prices. Such properties require sufficient amount of initial investment in repair works and reconstruction as the buildings are usually old and in bad condition.

Information Source: Sofia Echo

OFFICE PROPERTY RENTS IN TOP 50 HIGHEST WORLDWIDE

The office rents in Sofia rank as the 49th highest worldwide, research of consultancy company CB Richard Ellis (CBRE) shows.

Annual office rent expenditure in Sofia reached $517.3 per sq m, or $43.1 per sq m per month.

London keeps its first place in the chart. Office rents in some of its most expensive parts reach $2596.5 on annual basis. Tokyo takes the next positions in the chart.

The chart’s top 10 remain almost unchanged. Delhi is a newcomer among the 10 most expensive office property destinations, ranking seventh.

Moscow, Paris, Dublin and Dubai also feature in the top 10.

Athens and Warsaw are the other two East European cities apart from Sofia to rank among the most expensive 50 office destinations. Athens ranks 36th and Warsaw occupies the 48th position.

About Bulgarian properties in summer season

Over the past few years, property supply has exceeded demand in Bulgaria’s leading resorts.

The vacation property market is reaching its saturation point and a number of resorts already suffer from over-construction and the lack of proper infrastructure, participants in the first Balkan real estate conference BalRec said.

In order to attract new clients, resorts should start offering unique projects and better infrastructure condition.

Vacation property developments in Bulgaria are more prominent than those located in neighbouring counties, conference participants said.

Colliers International data for 2006 shows that the number of vacation properties in Bulgaria’s coastal area increased 82% to reach 35 000 units. The biggest increase was registered in the regions of Kavarna and Balchik.

Romania and Serbia are currently trying to establish themselves as attractive tourism destinations in order to also develop the vacation property market.

At the same time, the quality of vacation property projects in Bulgaria varies greatly. Buyers now have higher demands, which also presupposed higher construction quality.

Vacation property prices in Bulgaria vary from 800 to 1600 euro per sq m. Colliers predicts similar levels or a slight increase in the future.

Investors in Bulgaria’s coastal regions are failing to find buyers for their newly-built hotels.

Nearly 30 new hotels were offered for sale over the past year, 24 Chassa daily reported. Only 250 hotels were on sale in southern coastal regions. The hotels are being sold in all stages of construction.

The average price is 856 euro a sq m.

Most of the hotels for sale were in the resorts of Sveti Vlas (St Vlas), Slunchev Bryag (Sunny Beach) and Chernomorets.

Experts said that there was a lack of buyers in these resorts, because the most tourists there were foreigners, who preferred buying apartments in complexes, instead of staying in hotels.

The biggest demand for hotels was in Slunchev Bryag, Nessebar and Primorsko was said in press.

To the north, the highest supply of hotels is in Zlatni Pyasutsi (Golden Sands) resort. Average prices were 1000 euro a sq m.

Demand was biggest in Zlatni Pyasutsi, Sveti Konstantin and Slunchev Den (Sunny Day).

Information Source: Sofia Echo