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Sat, Nov 21 2009
British and Irish investors lose 13.2M leva in Bansko
Construction in Bansko
About 300 British and Irish investors have said they have lost nearly six millions pounds sterling, or 13.2 million leva, in the Alpine resort of Bansko, in a joint letter sent to Kafeneto.net.
In the letter they explain that they are ordinary people, not businessmen or large scale investors. However, they fear that their investments are likely lost because the future of the enterprise in Bansko now appears uncertain.
A combination of bad circumstances, poor management and rampant corruption, particularly from the British-based and British-run company, Bulgarian Development UK, is to blame, kafeneto.net has said, quoting the letter.
In its defence, the company has argued that the problem lies with alleged corruption in Bulgaria and the global economic downturn.
The letter, however, implicated the UK-based company in financial mismanagement and investing customers' flats as bank guarantees to finance other projects, in spite of the fact that several of those flats were fully paid for, in cash, from the beginning.
Bulgarian Development UK has insisted that they were obliged to adopt such measures in order to pay the construction company in full, and that complications ensued after the company had terminated construction operations and now the real estate development has stalled altogether, even though it had been paid for by the customers in advance.
It's now likely that the UK-based company will declare bankruptcy, which will spell financial disaster for more than 300 British and Irish investors. The investors themselves have complained and said they were "distraught that neither the Bulgarian nor the European legislature can do anything about the matter, that no one is able to defend their investment and rights".
Consequently, properties which have been fully paid for from the beginning and "should belong to their rightful owners" could be requisitioned and sold on to someone else.
The investors have gone ahead and established their own group, Pirin Park Resort Residential Association, which is entrusted with conducting negotiations aimed at resolving the mess with the construction companies and other parties involved. Furthermore, they have contacted the Bulgarian commissioner in the EU, but this has not yet reaped positive results.
Source propertywisebulgaria.
In the letter they explain that they are ordinary people, not businessmen or large scale investors. However, they fear that their investments are likely lost because the future of the enterprise in Bansko now appears uncertain.
A combination of bad circumstances, poor management and rampant corruption, particularly from the British-based and British-run company, Bulgarian Development UK, is to blame, kafeneto.net has said, quoting the letter.
In its defence, the company has argued that the problem lies with alleged corruption in Bulgaria and the global economic downturn.
The letter, however, implicated the UK-based company in financial mismanagement and investing customers' flats as bank guarantees to finance other projects, in spite of the fact that several of those flats were fully paid for, in cash, from the beginning.
Bulgarian Development UK has insisted that they were obliged to adopt such measures in order to pay the construction company in full, and that complications ensued after the company had terminated construction operations and now the real estate development has stalled altogether, even though it had been paid for by the customers in advance.
It's now likely that the UK-based company will declare bankruptcy, which will spell financial disaster for more than 300 British and Irish investors. The investors themselves have complained and said they were "distraught that neither the Bulgarian nor the European legislature can do anything about the matter, that no one is able to defend their investment and rights".
Consequently, properties which have been fully paid for from the beginning and "should belong to their rightful owners" could be requisitioned and sold on to someone else.
The investors have gone ahead and established their own group, Pirin Park Resort Residential Association, which is entrusted with conducting negotiations aimed at resolving the mess with the construction companies and other parties involved. Furthermore, they have contacted the Bulgarian commissioner in the EU, but this has not yet reaped positive results.
Source propertywisebulgaria.
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Sunday Business Post: Irish firm developing real estate in Bulgaria goes under
Blackwater Homes, a Cork-based firm which has constructed several housing developments in the south of Ireland, and is currently promoting a 354-flat complex in the Black Sea coast in Bulgaria, including a spa and a hotel, has filed for bankruptcy protection
British woman describes investment in Bulgarian real estate as nightmare
Strange as it sounds, I’m one of thousands of British who have done the same thing she tells The New York Times
Real estate prices in Bulgaria have dropped to 2007 levels
The most drastic decrease is observed in the prices of residential estates along the Bulgarian Black Sea coast. Falls are observed in all market sectors nationwide but Sunny Beach, Sveti Vlas, Varna and Bourgas are experiencing sharpest reductions.
British tourists fined for a ruck in Bansko
The Municipal court in Razlog sentenced three British tourists to 200 leva each. The three were accused of refusing to pay their bill in a Bansko restaurant and starting a fight. The fight broke out between the three British tourists and staff of the establishment, after which the men were apprehended by the police.
More in this category
New modern marina worth 24M leva to be constructed in Pomorie
The Black Sea town of Pomorie has approved a proposal for the construction of a spacious and modern marina, with a capacity of over 600 yachts and small passenger ships.
Construction sector in Europe continues to decline
Over the course of a year, from one of the leaders in Europe in new construction, Bulgaria became one of the countries currently quagmired at the bottom of the table and was now amongst the three worst hit countries, along with Romania and Slovenia.
Bulgarian Property Developments begin construction of 12.6M euro logistics park in Rousse
The park is posed to act as an economic stimulant in the region, creating a modern infrastructural base for companies. It is set for completion by Q3 of 2010.
Discounter chains Penny Market, Plus open stores in Bulgaria
Both retailers target at least 50 outlets in Bulgaria by the end of 2010.
The big question
When will Bulgaria’s real estate and construction sector recover?
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I don't understand why Bulgaria is to blame here when it's clear that this person just did not do his due diligence. America has a great reputation and yet Madoff ponzied quite a few. Bulgaria may be a bit more heavy on administration but it made a lot of money for a lot of people. I am in finance and my boyfriend is an architect and I continue to work and make money for people...smart people.
i invested in bulgaria in 2004 with a company caled barrasford and bird in st vlas the developers dinevi and co had no probs whatsoever u need to do your home work first
Well Mr McNeil, seems like you haven't invested anywhere bearing in mind that you use the future tense and listen solely to heresay!
I sincerely hope that you dont step one foot here with your ignorant attitude. Stay at home wherever that is, clearly not here!
I invested in Bulgaria 3 years ago and have never experienced a single problem, my home was delivered ontime and in perfect condition, as for Alex McNeils comments, well you are little more than a pathethic obnoxious idiot. I do hope that immigration read your views and stop you from ever entering this beautiful country.
The biggest consistent investor in Bulgaria for a while has been the Bulgarian ex-pat community, which brings in about Euro 2 billion/year, even in the crisis the trend looks like the same. I am so sorry for anyone who has been ripped off, I have been ripped off by Bulgarian builders in my own house in Sofia, which I tried to refurbish, experiencing black-mail, high prices and bad quality of work.
Just do not go anywhere, where you do not see existing, not former Bulgarian ex-pats, being tourists or investors.
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Just don't buy where you see big mafia developments. I have the house of my dreams, wouldn't have touched Varna or Bansko developments with a plumber's rod..
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I am not sure that in Bulgaria we should welcome "investors" who are after all really only speculators.
Like many Bulgarians I would prefer these sharks to stay away. Get that Mr McNeil ?
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Surely there should have been better regulation - and what about
the lawyers? aren't they supposed to look into the safety of the projects - at least to an extent.
Even buying a finished property
is not a guarantee of getting a
return on one's investment. People
just don't seem to weant to visit.
Hi, I myself invested in BG and never had a problem i think most of these investments are for off plan buildings that in itself is a risky venture you should only buy what is in front of you and finished.This is a major problem in spain where people have paid huge deposits on an off plan investment that has never been started this credit crunch has destroyed a lot of investments and its all a mess.
Do not invest in Bulgaria. Bulgaria is not to be trusted.
I would invest in EU States like Czech Republic, Poland, Romania, Hungary,Slovenia. But never in my right mind I would put my money into Bulgaria. I have heard some scary things about Bulgaria and investing in that country.