A new player on the market for commercial areas in Bulgaria Demand is present, but limited by high interest rates on housing loans

Real Estates

A new investor is considering entry on the market for commercial areas in Bulgaria. AFI Europe Bulgaria, which has already realized 5 projects, including the two residential areas - Vitosha Tulip and Lagera Tulip as well as Business Park Varna, has already started negotiations and is conducting inspections for construction of new shopping malls and trade centers. This was announced by the company's CEO, Shimon Ben Hamo in response to an inquiry by Klassa. Ben Hamo specified that the company was interested in developing its own facilities in major cities and not in purchasing already existing ones.
AFI Europe Bulgaria plans to implement its projects in the short run. "Everywhere we operate, we strive to participate in all market segments - commercial areas, offices, logistics zones, housing sector, infrastructure projects," added Ben Hamo. Since 1997, the parent company AFI Europe, which is part of AFI Group, has implemented overall 32 projects in 8 European countries, with the commercial spaces covering about 1.2 mln sq m. The investor's portfolio also contains the biggest shopping mall in Eastern Europe - AFI Cotroceni Palace in Bucharest - on 215.000 sq m built-up area.
Regarding the housing segment in Bulgaria, Ben Hamo specified that the big problem in this area had to do with the high interest rates on loans. "Currently, there is demand in the real estate market, but it is limited precisely by the lending terms and conditions offered by banks," he added. This is why last year the company developed its own financing scheme. Upon the signing of the initial contract, the client pays with own funds between 20-30% of the total value of the property and can immediately move into the apartment. At the same time, the purchaser has the opportunity to defer the payment of the remaining part within a 2-year term. Within this two-year deadline, the client transfers monthly installments to AFI Europe, amounting to approximately 7% annual interest on the sum due. Most of the apartments in Vitosha Tulip were purchased following to this scheme.
The interest rates set on the newly opened Lagera Tulip is lower. Therein, 35-40% of the apartments were sold. The project has been competing for the Building of the Year Award. The price per sq foot stands around at €900-930. It is a general trend to purchase nearly completed projects in contrast to the pre-crisis period, when more people were willing to conclude 'cash' deals, specified the CEO of AFI Europe Bulgaria.

 

Text: klassa.bg

Photo: Mirela

 
To see the presentation of the company, please follow the link:

Presentation of Mirela Real Estate

(25.11.2010)