The number of office rent deals signed in Bulgaria in the third quarter of 2009 was six times less than in Q3 2008, according to estimates by Forton property consultants, the local representative of global company Cushman & Wakefield.

Office rent transactions peaked at 65 000 sq m between July and September 2008, but collapsed to 10 700 sq m in Q3 2009, Forton manager Sergei Koinov said.

With as many as 234 000 sq m of new offices headed for the Sofia market next year, rentals are nosediving and empty space is building up. According to the report, up to 14.5 per cent of prime offices are still awaiting tenants and more than 20 per cent of the suburban locations are idle.

Office building owners are wooing tenants with grace periods and gradual rent increases, while trying to hold on to rental levels in the long term, Forton property management director Genoveva Borisova said.

Koinov said that not a single retail project had entered the market in Q3 2009 but about 375 000 sq m of commercial space should be completed in shopping malls currently being built.

He said that some investors might be delaying launches because of tenants' financial instability.

Sofia retail centres have not seen a drastic decrease in turnover, and are keeping up with loan repayments, but projects outside the capital city are battling against lower purchasing power.

The consensus among real estate agents is that shopping malls are losing their appeal, while trade parks, which are less capital-intensive and offer better rents, are becoming more attractive.

After biding their time for a whole year to see which way the market will go, investors are now trying to make up for lost time, Forton head of investment sales Mihaela Lashova said.

She said that the market could see a number of deals by the end of the year.

Source: Dnevnik.bg