Innovative property investments
Investment Property in Bulgaria
City Areas
Sofia
A dynamic city
Sofia is a vibrant, cosmopolitan city enjoying phenomenal growth. Home to 1.2 million people - a fifth of the country’s population - in just 100 years its population has multiplied a 100-fold.
Brimming with culture
Dating back to the 8th century BC, Sofia’s glittering onion-domed cityscape is packed to bursting with places of cultural and historical interest.
Over 250 archaeological, historical and cultural monuments testify to a history of more than 7,000 years, much of it literally buried beneath the city’s young and modern facade.
Its cultural offering is broad, café culture strong, and shopping potential blossoming due to three new malls selling leading brands which opened in 2006 and 10 more planned for by 2010.
Skiing and hiking nearby
Nestled snugly at the foot of the impressive Vitosha Moutain Park, Sofia is one of Europe’s most fortunate capitals, offering its residents and city breakers spring/summer hiking and winter skiing just 10km from its centre.
Just an easy bus ride or cable car away.
Those with a car can admire views of Iskar Gorge to the north and Zemen Gorge and Skakavitza waterfall to the west and excellent skiing a 60 minute drive away in Bansko.
Low cost of living
The city’s affordability and the increasing number of direct budget flights to its expanded and renovated airport is opening it up to tourists and business commuters.
According to Mercer’s Worldwide Cost of Living Survey 2006, Sofia ranked cheaper than Zagreb, Budapest and Kiev, whilst USB’s 2007 Price and Earnings Survey of 71 cities found that a couple could live like kings and queens for the weekend on a city break in Sofia for under 450 USD (230 GBP).
For the same package of an overnight stay for two in a first-class hotel, two evening meals with wine, a couple of theatre outings and some other expenditures, it cost over a 100 USD more in Budapest and Bucharest: 590 USD (300 GBP) and 530 USD (270 GBP) respectively.
London would cost the couple a whopping 1180 USD.
Attracting foreign investment
Sofia’s development has always owed much to its strategic position at the heart of the Balkans and today is no exception.
Coupled with its qualified labour force, competitive operational costs, low corporate taxes and rapidly developing capital market, Sofia is drawing in the multinationals.
It already hosts Deutsch Bank, Google and Ernst and Young subsidiaries; Hewlett Packard’s main service centre for Europe, Africa and the Near East; and SAP Labs Research and Development HQ.
Microsoft will follow suit this year, establishing an on-line software maintenance centre to service clients in Slovenia, Macedonia, Romania, Bosnia and Herzegovina, Croatia and Greece.
Attracting young professionals
Such excellent job prospects are attracting young professionals, foreigners and nationals in need of well located corporate rentals.
Given the poor quality of the older housing stock, demand is great for quality, high-grade residential accommodation.
Property area and price guide: an overview
As is to be expected, the capital’s property commands the country’s highest prices.
Solid increases - rising 12.53% over 2006, are underpinned by a buoyant rental market but are still an affordable purchase.
At an average asking price of 700 EUR (470 GBP) per m2, Sofia’s city centre properties are below that of its European rivals such as Warsaw, Prague or Budapest, which average 1300 EUR (870 GBP) per m2.
In 2006 prices rose most in the residential districts of Mladost, Lyulin, Geo Milev, Redouta, Druzhba and the city centre. Demand was greatest for two-bedroom apartments.
Doctor’s Garden
Doctor’s Garden is Sofia’s most desirable and expensive location for buyers and renters alike.
Here one buys 19th century and post-1940s apartments in need of extensive renovation.
The average price asked last year was 1,700 EUR (1,140 GBP), with the range being between 1,000 EUR and 3,000 EUR per m2.
Ivan Vazov
The tree-lined streets within walking distance of the centre of Ivan Vazov was Sofia’s second priciest area to buy in at 1,325 EUR (890 GBP) per m2 in 2006, with the range being between 700-2,000 EUR (470-1,340 GBP) per m2.
Prices were 500-1,700 EUR (335-1140GBP) per m2 in Lozenetz.
Iztok
Iztok, home to many of the city’s foreign embassies, Sofia Business Park and the metro extension is also an expat favourite.
Here asking prices were a relatively high 700-2,000 EUR (470-1,340 GBP) per m2.
Lower end
Cheaper new off-plan and re-sale properties are available a 20 minute bus ride from the centre in the suburbs of Manastirski, Vitosha and Students Town but command lower rents.
Villa Zone
Further out still, beyond the ring road, 20 minutes by car from the centre, lies the “Villa Zone” of the villages of Boyana, Kinotsentar, Simeonovo and Dragalevtsi on Mount Vitosha’s forested slopes.
Their upmarket, detached homes with sizeable gardens, close to hiking and skiing, find favour with wealthy Bulgarians and expats and is where construction and buying has been most concentrated of late.
Three to four bedroom houses of between 250 to 450m2 were typically offered for 200,000-350,000 EUR (134,000-234,500 GBP) with prices going up to 500,000 EUR (335,000 GBP) and even reached as high as 1 million EUR (670,000 GBP) for exclusive properties.
Rental prospects
The number of high-class apartments offered for rent continued to grow over 2006 and be concentrated in Doctor’s Garden, Lozenetz, Iztok, Ivan Vazov and Hladilnika. Manastirski livadi, Vitosha, and Krastova Vada remained characterized by middle-class developments.
Rental supply is dominated by two and three bedroom apartments.
One bed apartments were in demand but slim on the ground.
The number of houses available, both stand-alone and within complex developments, is rising, mainly in the southern suburbs of Boyana, Simeonovo, and Dragalevtsi.
One and two bedroom units are typically offered furnished and larger apartments unfurnished.
Average income
Rental yields of 7% to 10% were typical.
Average rental rates for two bed flats in the centre were around 5 EUR (3.5 GBP) per m2 for a furnished two bed apartment.
However, as purchase prices indicate, high-end tenants - expats, embassy staff and international companies’ personnel - prefer to rent in Doctor’s Garden, Lozonetz, Ivan Vazov and Iztok.
Upper end income
Last year the most exclusive properties in these areas achieved average rents exceeding 10 EUR (7 GBP) per 2, with 7 EUR (4.70 GBP) per 2 being more common.
Average rents for three and four bed houses in the southern suburbs were 1,200-2,500 EUR (800-1700 GBP) per month but could command rents of 4,500-5,000 EUR (3,000-3,400 GBP) per month depending on furnishings, size of garden, landscaping and value-added services and amenities.
With supply steadily increasing, especially for the upper ends of the market, and competition set to intensify, the most profitable model in the Sofia will be buying well-located, quality, yet affordable housing for the middle market in the centre or inner suburbs.
Downloadable Reports and Documents
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