INVESTORS LOOK FURTHER OUTSIDE SOFIA FOR LAND

news date: 19:06 Thu 22 Nov 2007 - Rene Beekman

Because of high prices for land within the Sofia ring-road, these projects had increasingly been moving further east-wards, Pari daily said.
Between 15 and 20 euros was what large funds were ready to pay for land in the Sofia area for the construction of logistics centre’s, according to real estate agents.
Interest in land had shifted eastwards to Elin Pelin and Ravno Pole, but there the maximum prices investors were willing to pay were lower because of lower expected income from rent.
For close to a year, international funds, specialised in the construction and management of logistic centres, had been testing the Bulgarian market. Their plans included large scale projects of tens-of-thousands of sq m east of Sofia's ring-road, but these plans have a hard limit on land prices,  Pari daily said.
International investors would come to Bulgaria with ready equations in which rental prices and construction expenses were fixed constants.
Only the price of land was variable, Asen Tanev, managing director of City Estate agency said.
A developed infrastructure, access to railway transport, in the vicinity of Sofia and the Trakiya and Hemus highways were the main reasons that attracted investors to Elin Pelin and Ravno Pole. The increased interest had lead to increased prices for land, which was said to have reached 30 to 35 euros per sq m already.
According to data from Colliers International, average rent prices in Elin Pelin and Ravno Pole was between 3.5 and 4.5 euros per sq m, while in Sofia rent could be as high as 5 to 6 euros per sq meter.
The trend was expected to continue for 1 to 2 years. In the long term however, rent prices for logistic centres were expected to fall because of competition with ever-larger storage centres. This was expected to drive land prices down.
Remax Chance Group said it expected an increased interest in other regions, like Dolni Bogrov and Gorni Bogrov. After recent changes in Sofia's city masterplan, a new logistics area, close to the ring-road, had been established. Prices in this area had not dropped below 50 euros per sq m before, but now area's of 15 to 50 000 sq m were offered at around 35 euros per sq m, Simeon Mitev from Remax Chance Group said.
Source - Sofia Echo

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