In 2011, all construction in Bulgaria will finally be regulated according to all EU standards, European Integration Minister Gergana Grancharova told a conference on sustainable development in the real estate sector on September 25. The event was organised by Colliers International.
Grancharova’s statement suggested that, at present, there was not much regulation in Bulgaria when it came to construction works. Grancharova cited statistics which showed that 40 per cent of the energy in the European Union is consumed in buildings, while the rest is distributed equally between industry and transport. According to Eurostat, the growth in the Bulgarian construction industry was the second fastest in the whole of the EU for the first quarter of 2007, Grancharova said. She expected this growth to remain significant. The absorption of EU funds in Bulgaria was one of the conditions for preserving the fast development of construction, Grancharova said.
“They can be used for the development of infrastructure, hydro-power stations, landfills and waste treatment plants. All this should be linked with environmental standards in construction, as well as with the development of small and medium-sized enterprises,” she said.
Grancharova said that the construction business in Bulgaria was considerably fragmented. Bulgaria had about 1500 construction companies, which could fulfil any kind of order. We have to make a “green regulation so that anyone who cuts down a tree should plant a forest,” Grancharova said. “The future is not in those who want speculative profits or builders who quickly want to forget what they have built.”
While Grancharova was concentrating on construction issues, new data released showed that office rents in downtown Sofia have increased by about 20 per cent since the beginning of 2007. The increase was driven mainly by the lack of office space, data from the real estate consultancy Forton International showed. Rentals are highest at the Prestige business centre at 30 euro a sq m, two euro higher than the rents at Landmark Business Centre and TZUM-Sofia shopping centre.
Colliers International predicts that rents will maintain this positive trend in 2008, though at a slower rate. The next batch of new offices in central Sofia will be completed in 2009 at the earliest. The new office space in Sofia grew by 10 per cent in the first half of 2007. About 75 per cent of the new offices are located in the suburbs. The combined area of existing offices and those under construction is about 0.5 sq km (500 000 sq m).
The rise in rents must have been among the reason why Israel’s BSR Europe has planed to invest 200 million euro in a real estate project, including the construction of residential and business buildings, with total built-up area of 0.23 sq km (230 000 sq m). BSR, in partnership with an undisclosed European investment fund, has purchased a plot of land for 37 million euro, with BSR Europe controlling 42.5 per cent of the project. The company refused to name the fund or the exact location of the land, saying these details would be announced separately, investor.bg website said.
BSR Europe had additionally reached an agreement for the purchase of 0.35 sq km (350 000 sq m) of land in Romanian Brashov at a value of 5.1 million euro. Housing complexes with a floor space of 0.05 sq km (50 000 sq m) could be build on the land. The total value of this project was estimated at 40 million euro. BSR Europe was the fourth Israeli company to buy land in Brashov in the past few months, Globes said. The company specialised in housing complexes, offices and retail centres and has invested in the Czech Republic, Slovakia, Poland, Hungry, Latvia, Georgia and Spain. In Bulgaria the company has finished an eight floor office building on Sofia’s Totleben Boulevard with 4300 sq m of floor space. In Lagera neighbourhood it is building a housing complex under the name Lagerfield, which contains 630 apartments distributed over 12 buildings. The project should be completed in 2010.
