2024-07-21 10:08:34
Rents are stable – neither increasing nor decreasing
Unoccupied offices in the capital continue to decrease, but are still above 15%. In the second quarter of 2024, 15.3% of this space remains unoccupied, according to the latest report from consultancy Cushman & Wakefield Forton.
In the period April – June, contracts were concluded for renting 37,088 square meters of offices in Sofia, which is comparable to the volumes of the market for the second quarter of the last five years. But at the same time
two new relatively large buildings have come on the market
with a total area of just over 8,000 square meters, located on main boulevards, which is why the share of unemployed remains relatively high. The capital currently has a total of 2.259 million square meters of office buildings.
“After the calm first quarter, we observe a relative activation of the rental market in the spring months. There is interest both from companies new to the Bulgarian market and from operators in trade and logistics who are looking for space in higher class office buildings. This partially compensates for the restructuring in the IT sector and contributes to the improved performance of the office market in recent months,” commented Yoanna Dimitrova, manager of “Office Space” at Cushman & Wakefield Forton.
The interest in shared offices continues to grow, but the special thing in Bulgaria is that they are mostly part of existing office buildings in which the owner has decided to offer such a service, and not so much independent projects. In the case of shared offices, an entire room is usually rented out, but it
can be divided between several tenants
They are typically used by start-ups that are just entering the market, and office building owners view such spaces as an incubator to attract new tenants in the future.
As of mid-2024, such shared offices in the capital total 68,900 square meters, with another 8,000 square meters yet to come on the market.
Rent levels in the office market are currently stable and are neither increasing nor decreasing. In the center of the capital, the more luxurious class A offices
are for rent for 17.5-18 euros/sq.m. m
On the major boulevards, the levels vary between 15 and 17 euros/sq.m. m for class A offices, and for class B offices the rents are a little over 10 euros per square meter. However, these are the prices without service charges and without consumables, which are paid separately. As business electricity prices rise in 2021 and 2022 in some buildings
contracts were massively revised,
because for many companies the electricity started to cost more than the rent itself.
Outside the capital, rents in office buildings are significantly lower, and there are not so many high-quality projects there either.
And in the second quarter, the share of free space in class A office buildings remained lower than in the lower class – it was 14.6% compared to nearly 17%. Traditionally
the fewest vacant areas are registered in the center of Sofia
– just over 12%, while due to the greater supply in certain areas in the periphery and on the major boulevards, their share approaches 16% on average, according to data from Cushman & Wakefield Forton.