Tsarigradsko Chaussee To Become Sofias Main Business Centre By The End Of 2010

The industrial and business area around Tsarigradsko Chaussee is poised to become Sofia's leading business destination by the end of 2010, Dnevnik daily reported on April 13 2010.

More than 300 000 sq m of offices are currently under construction, in addition to the already existing office space and the 70 000 sq m made available in 2009 alone. More than half of the new space is due to be completed this year.

Reports indicate that with the new construction ready, a total of about 1.17 million sq m will be made available on the market. Additionally, about 150 000 sq m of office spaces were under construction and were expected to be available by the end of June 2010. For the moment, only about a quarter of them, 20-25 per cent, have been rented out to tenants, while the others remain vacant.

Next week, the European Trade Centre is due to open, which will be followed by Megapark and the Polarography Business Centre by the end of 2010.

"The market is becoming more flexible, as prices are stabilising. Deals are being closed at about 11 euro a sq m for five-year terms," Sergei Koinov, manager of Forton said.

Prices on Tsarigradsko Chaussee remain higher than those along Bulgaria Boulevard and Todor Alexandrov Boulevard where the rates currently go for eight to 10 euro a sq m. The report says that, at the moment, top grade office space in Sofia is offered at between eight and 13 euro sq m, with certain exceptions. Figures show that as a comparison, at the end of 2009, prices were at 13.5 euro a sq m while in 2008, 17 euro.

"The weak demand and oversupply of new first class office space exerts increasing pressure on rental prices, which have returned to 2005 levels," Nikolai Neov MBL manager told Dnevnik daily.

"Decline in value varies from 30 to 40 per cent as opposed to 2008 levels when we had the peak," he added.

According to MBL, about 72 000 sq m of office space were rented out in 2009 nationwide, making it the lowest rate in five years, since total completed office space amounted to 165 000 sq m. Furthermore, about 375 000 sq m of new office space is expected to be made available on the market in 2010.

Elta Consult, a former partner of CB Richard Ellis, estimates that rent value decreased by 22.5 per cent by the end of 2009 on early basis.