Fri, Mar 12 2010

AT Kearney: Bulgaria holds ground in office outsourcing

Mon, May 25 2009 13:35 CET 3934 Views
AT Kearney: Bulgaria holds ground in office outsourcing

The latest rating of the global business consultant AT Kearney indicates that Bulgaria still has positive potential for outsourcing of offices in spite of the economic downturn. It is still an attractive destination, especially in the financial and accounting sectors, maintenance and development of computer systems and databases, client support, research and development and labour intensive services.

Office building investors have an increasingly arduous task in the midst of the downturn: finding tenants for hundreds of thousands of sq m of office space at a time when managers are trying to cut costs.

According to the latest edition of global management consulting firm AT Kearney’s Global Services Location Index (GSLI), deteriorating cost considerations and improved labour quality are driving a dramatic shift in outsourcing locations.

The GSLI report shows that once competitive central European countries have yielded ground to countries in Asia, the Middle East and North Africa. India, China and Malaysia retain the top three positions they have occupied since 2004.

The downturn has been particularly marked in central and eastern Europe where established premier outsourcing destinations have slumped in popularity. The Czech Republic, for example, has fallen to 32nd place from 16th, Hungary to 37th place from 24th and Slovakia to 40th from 12th. Meanwhile, Bulgaria has also registered a decrease, albeit a significantly milder one - from ninth down to 13th place. 

Reasons for the decline of central and eastern European countries were said to be the drastic escalation in costs driven by wage inflation. Meanwhile, low-cost countries in Southeast Asia and the Middle East have made substantial advances as the quality and availability of their labour forces improve. Egypt, Jordan and Vietnam ranked in the GSLI’s top 10 for the first time ever. 

In Bulgaria, in particular, according to Stroitelstvo Gradut, the market has been facing increasing pressure over the past few months due to economic weakness. This forces companies to reduce spending on office space, so releasing more unused areas.

Vacancy rates in Sofia have soared up to double digit percentages while rent levels have regressed to the values of two years ago. A few major property transactions like Hewlett Packard Global Delivery Bulgaria Centre, which completed a 8 000 sq m move in an office complex in Kambanite business centre, and the VMWare software developer with five storeys in the East Tower at GM Dimitrov Boulevard, have been hailed as positive indicators for the future by local analysts.

Source: propertywisebulgaria.

Comments

Anonymousaccounting outsourcing servicesWed, May 27 2009 14:06 CET

This comment has been removed by the moderator because it contained

Write comment

Name:Comment:

Generate new code
Send your comment

By posting a comment, you are deemed to have read and agreed to our
Acceptable Use Policy.

Bulgarian property market: housing stock inches up in 2008

Total housing inventory increased to 240.706 million square metres, a 0.7 per cent increase from a year earlier.

Hewlett Packard Bulgaria opens biggest training centre in Balkans

The programmes on offer are HP-UX, HP StorageWorks, HP ProLiant & HP BladeSystem, Vmware, Linux, ITIL/ITSM, Project Management, Business Analysis and Microsoft Training.

Superfluous supply and weak demand equal 19 100 sq m of new office space on offer

More than 19 000 sq m of new office space have been made available. Additionally, five new shopping malls are under construction in Sofia alone.

LM office centre will be completed by the end of 2009

The western part of Varna, which has been transformed over the past few years into a modern industrial and business centre, will see the inauguration of yet another large office and retail complex by December 2009.

BTC signs the biggest office deal in Bulgaria

BTC signs a lucrative 20-year deal with the European Trade Center for 23 000 sq m of office space, making it the largest such deal on the Bulgarian market to date.

More in this category

Cinema City sells two mall projects in Bulgaria for 85 million euro

The deal is valued at 85 million euro and covers the Маll of Rousse and Mall of Stara Zagora projects. According to the seller's preliminary plans, it should be completed this year.

Experts: Bulgarian property market expects resurgence in 2010

Experts believe that the the market will become increasingly flexible, benefiting buyers in the process.

Britons to march on Bansko against alleged property theft

Zekom firm run by Roman Romanov is accused of illegal property appropriation

Bulgaria drops five places in global office rent rankings

With annual rental costs of 205 euro a sq m, or a monthly 17.08 euro a sq m, Bulgaria was number 54 out of 63 worldwide cities by 2009 levels, dropping from 49th place in 2008.

Colliers International and First Service Real Estate Advisors merge - report

The new merged entity will operate as Colliers International in 61 countries around the world, Bulgaria included