Office rents in Sofia to stay unchanged in 2010
Demand for office space in Sofia has increased towards the end of 2009, real estate consultants Elta Consult agency said on February 10 2010.
Rents had decreased by 22.5 per cent by the end of 2009, as opposed to levels from the summer of 2008, which brought renewed interest in the market segment, according to the company, which is a former partner of CB Richard Ellis.
An increasing number of clients were willing to enter the market and close on a deal, according to Elta Consult. Its forecast for 2010 was that rent levels would "undergo little or no alteration", which would in turn prompt the market to gradually recover in accordance to the "flexibility of the investors".
According to different studies however, 2010 will see the decline of prices of both office space and real estate even further.
About 70 000 sq m of office space was complete and made available in 2009, making it a total of about 1.17 million sq m on the market. Additionally, about 150 000 sq m of office space 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, whilst the others remain vacant.
Elta Consult said that in the last quarter of 2009, take-up of available office place by punters increased by 50 per cent as opposed to first nine months of the year, but remained nearly half of what the take-up levels were in the corresponding period of 2008.
The gradual accumulation of new office buildings due to be completed and opened for business throughout 2010 could cause a "dis-balancing" effect on the market and keep prices low because of excessive over-supply, a study by real estate consultant firm MBL and global consultancy CB Richard Ellis was quoted as saying by Stroitelstvo Gradut weekly in January.
Regarding the the quantity of office space constructed and offered on the market and that pending completion, Elta Consult statistics varied from MBL's figures, albeit not greatly.
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.
Currently, office space Class A in Sofia city centre varies between 11.5 and 15.5 euro a sq m, whereas elsewhere in the capital, the average is between nine and 13 euro sq m.
Text source: sofiaecho.com
Image: google.bg
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