BMI View: Bulgaria's commercial real estate market is showing signs of life in 2014, with the latest industry indicators pointing to an uptick in demand and rental activity across the retail and industrial subsectors in particular. A gradually improving macroeconomic backdrop should provide some stimulus to investment and growth in rental rates in 2014 . However, the real estate sector face s a number of headwinds in 2014, including oversupply, weak consumer spending and deflationary pressures.
With a focus on the country's principal cities of Sofia, Varna and Burgas, the report covers rental market performance in terms of rates and yields across the commercial office, retail, industrial and construction sectors.
A number of key economic indicators support our view that the real estate segment will enjoy a return to growth in 2014. At the top of the list, the country will see a significant acceleration in economic growth, with GDP forecast to expand by 1.6% in 2014, compared with just 0.5% in 2013. We expect the most positive impact from this to be in the retail and industrial real estate sub-sectors, which will benefit from a continued improvement in consumer spending and industrial and manufacturing activity, respectively. Bulgaria is benefiting from improving external demand, and we expect public spending and a positive contribution of net exports to continue to support real estate investment and growth in 2014.
On the other hand, according to our in-country sources, the office rental sector will continue to struggle due to an ongoing supply-demand issue.
In addition, the deflationary environment in Bulgaria poses a further risk to the real estate sector, with falling prices threatening to feed through into a drop in property prices and yield levels. Conversely, falling inflation levels would likely ensure that interest rates remain low, supporting lending.
The Bulgaria Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.
BMI's Bulgaria Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Bulgaria.
- Benchmark BMI's independent real estate industry forecasts for Bulgaria to test other views - a key input for successful budgeting and strategic business planning in the Bulgarian real estate market.
- Target business opportunities and risks in Bulgaria through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.
Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.
Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.
Industry Forecast Scenario
Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:
Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)
Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)
Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)
Business Environment Ratings
BMI's Real Estate Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.
The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.
The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.