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Record-breaking investment into Bulgaria last year

Foreign investment into Bulgaria reached a record high last year, according to the Bulgarian National Bank this month. Furthermore, the signs are that investment levels will remain high during 2008, with demand among foreign corporations for high quality office and commercial space in Bulgaria prompting a €64 million investment by Prime Property BG – the real estate investment trust (REIT) – into developing a large-scale business centre in Plovdiv.

The development will be situated in the Trakiya district of Plovdiv, combining retail and office space with underground parking, supermarkets and restaurants. It will be designed with the needs of its potential tenants in mind, and it is predicted that most of the units will be rented by foreign companies.

With the unveiling of this new project, some may liken the development of the city of Plovdiv – which is home to around a tenth of the population of Bulgaria – to that of the capital of Sofia a few years ago. There the arrival of large multinational companies such as PricewaterhouseCoopers, Porsche and Ericsson boosted the city’s population, along with the salaries of residents. As the earning power of the population rises, so does the demand for well-located, quality residences, creating opportunities for potential investors in Bulgarian property.

Indeed, of the record €5.687 billion in foreign investment that Bulgaria achieved during 2007, the largest proportion of 37% was investment into real estate and property rental, which had increased by 41% on the previous year.

As well as the continuing growth in its business areas, it was recently reported that Bulgaria can look forward to a strong tourism season as the economic situation in the UK means holidaymakers are now opting for cheaper foreign breaks. With this combination of expanding urban areas and popularity among tourists, British investors are continuing to show their confidence in the Bulgarian property market, and they remain the biggest investors in the country’s economy. Last year, foreign direct investment (FDI) from Britons reached €901.5 million, which equates to 16% of FDI into Bulgaria that year.

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