The office real estate market has seen another active quarter with increase in take-up, stable rents and high development appetite. Office jobs growth supported demand of prime office space. IT and BPO companies remain the major source of demand in Sofia and the secondary cities.
Office space take-up in Sofia recorded more than 60 per cent y-o-y increase in the second quarter of 2017, reaching 53,971 sq. m. The leasing volume for the half-year totaled 85,638 sq. m which is 55% growth compared to the same period in 2016. The market is driven mainly by expanding IT and BPO companies which generated about 70% of the demand in the Class A market segment. The financial and pharmaceutical sectors are also active, aiming mostly at consolidating their office space. Mirroring these processes, the second quarter was marked by several notable leases.
Relocations are also marked trend, resulting in slight improvement of the occupancy in the prime segment.
In general, the vacancy rate slightly decreased in the second quarter, reaching 9.3 per cent. However, further decline is not expected since the strong development activity is forecasted to increase the availability. Investment focus
After a significant increase in take-up in H1 2017 positive economic expectations bode well for the office market over the next quarters. The trend should encourage transaction activity.