Sofia office market since the beginning of the year

The office space market in Sofia registered a significant increase since the beginning of the year due to increased activity and increased business endeavors. Strong performance is also supported by robust economic fundamentals – 3.4% GDP growth over the past year. The reduction in unemployment also speeds up the demand for office space and ensures the stability of the segment.

The occupancy of offices for the first quarter of this year is 43% higher than a year earlier. In over 60% of the deals, the key operating industries are IT (high technology) and BPO (outsourcing).

In the first quarter of this year, the volume of office space available is about 1,761 million square meters, according to their MBL and Forton reports. A total of 305,000 square meters are in the process of active construction. Frozen office projects are down to 105,000 square meters.

The decline in office space is also continuing, as in the first quarter of 2017 they are only 9.1%. Less than half of these are in Class A office buildings. The free space for Class A and B offices is about 160,500 square meters. Reducing vacancies is expected to continue because new sites are scheduled to be commissioned in the second half of the year.

Rental levels are stable. The net utilized area in the first quarter is 17 000 square meters.

The average bid prices for Class A offices for the first quarter remain within the range of 12 to 14 euro, depending on the location and area. The volume of offices under construction will continue to grow. Demand will probably be around the average volume observed over the past few years. It is also possible to expect a slight increase in prices per square meter.

Experts expect that the second half of the year is expected to remain stable. The mid-term forecast of specialists is that strong demand and scarcity of premium spaces will move the office market this year as well.