Residential property prices in Bulgaria might increase by more than 70 per cent in the next five years as a result of the country’s European Union entry, experts from UK real estate agency Simpligroup said.
The agency gives the example of Spain, where residential property prices have grown by 800 per cent since the country joined the EU.
A similar development, though on a smaller scale, is expected in Bulgaria, according to Chris Downham of Simpligroup.
The number of British entrepreneurs willing to invest in real estate in Bulgaria is growing, Downham said in the Bulgarian-language daily Pari. Investments in the future will be concentrated mainly in infrastructure and agricultural regions, according to Simpligroup.
But this projection contradicts the forecast often given by Bulgarian real estateexperts who believe the country’s EU entry has already had its effect on the local real estate market.
The latest announcements by investors in the country’s real estate sector support Simpligroup’s projection, especially with residential complexes.
On January 12, Bulgarian real estate developer Dreamville announced plans to complete a 50 million euro residential complex in Plovdiv by the end of 2009. At the end of 2006, Dreamville won a tender for the land plot of five hectares in the city. The company plans to build over 10 vacation villages with more than 1800 apartments in the next three years. Dreamville invests mainly on the Black Sea coast.
The same day, Spanish real estate company Riofisa said it would invest 72 million euro in its third Bulgarian project in Sofia. The company will start building an office and residential complex with abuilt-up area of 54 000 square metres in 2008 and will complete the first stage in 2010, Riofisa said in a statement.
Last year, Riofisa said it would invest a combined 550 million euro in two business and entertainment centres in Bulgaria – in Sofia and in Plovdiv. The shopping and entertainment part of the first Sofia project would accommodate a hypermarket, a cinema complex, a professional bowling alley, shops and restaurants. European companies that have not been present in Bulgaria will run many of the facilities, Riofisa said.
Riofisa is developing two real estate projects at a total value of more than 260 million euro in Bulgaria’s northern neighbour Romania, which also joined the EU on January 1.
Positive signals came from the UK-based Black Sea Property Fund on January 10. The fund invests in luxury holiday apartments. On January 10, the fund reported good progress in its sales in the ski resort of Pamporovo and the Black Sea town of Obzor. Sales in the two complexes are better than expected and the prices are higher than initially forecast.
Black Sea Property currently has a total of 125 apartments in these two resorts under offer to a value of 15.2 million euro, which, if completed, will provide a profit of 2.5 million euro to the fund. Black Sea Property Fund Ltd has so far invested also in holiday complexes in the Bulgarian ski resort of Borovetz and near Varna and Kavarna on the Black Sea coast.
