site.btaColliers: Investment Property Transactions in Bulgaria during First Half of 2023 Worth Over EUR 83 Mln

Transactions with investment properties in Bulgaria in the first six months of 2023 amounted to more than EUR 83 million, according to a report by Colliers, the company said. The entire volume was implemented in the first quarter of 2023.

Office space accounted for 49% of the transactions, followed by land for development at 32%, mixed-use buildings at 13% and industrial properties at 5%. 

Local investors were behind 65% of the total investment volume in the first half of the year. Over this period, the size of speculative property transactions significantly outweighed that of income-producing asset transactions. The rates of return on office and retail space maintained their 2022 values of 7.75%. The parameter for industrial and logistics properties remains unchanged at 7.5%, Colliers reported.  

The report notes that the trend observed in Western Europe for a significant decline in investment volumes, mainly due to higher interest rates, is expected to affect Bulgaria as well, but to a significantly lesser extent - due to lower local indebtedness and low levels of interbank funding. Nonetheless, demand for quality investment properties will continue, but transactions will not occur at any price. Investors will be looking at opportunities in the market with particular focus on their quality and sustainability, Colliers added.

Business climate unpredictability remains a major challenge for commercial real estate. This trend will continue to influence investment purchase decision, prolonging the decision-making time while market risks are analyzed in detail and depth.