C&W/H&B has appointed Forton International, the leading national commercial real
estate consultancy in Bulgaria as an Associate Office.
Forton is part of Bulgaria's Address Group, one of the country's largest private property
advisors. Forton has 100 people in six offices across the country. It provides a full range of
services, in agency, advisory, investment, valuation and property management.
Ralph Holland, Head of C&W/H&B's Associate Offices, says: "Cross-border property
players are arriving in Bulgaria, attracted by the country's imminent membership of the
European Union and a property sector that shows significant potential for development.
"Our association with Forton builds on our already dominant position in Central and
Eastern Europe and ensures that we can service the growing number of our cross-border clients
looking to enter or expand in Bulgaria."
C&W/H&B was one of the first property consultants to open offices in Central and
Eastern Europe, in the Czech Republic and Hungary in 1993, and Poland in 1995, while in January
2005 it acquired leading Russian real estate firm Stiles & Riabokobylko, with which it had
an Association agreement since 1998. In addition, the Firm has Associate Offices in Croatia,
Romania and Slovakia.
The announcement of the association with Forton follows the ratification by the European
Parliament on 25 April 2005 of Bulgaria's entry to the European Union in 2007, together with
Forton was formed from the Address Group, Bulgaria's leading real estate group, simultaneously
with the announcement of the association with C&W/H&B. Valeri Valtchev, Chief Executive
Officer of Forton, comments about the Bulgarian property market: "To date, the focus has
primarily been on the residential and tourism sectors. Now commercial property is increasingly
in the spotlight as the demand from office and retail occupiers is growing, more new
developments are coming on stream and the investment market is starting to take
As well as in Sofia, Forton has offices in Plovdiv, the two main Black Sea port towns of Varna
and Bourgas, Pleven and Blagoevgrad.
Bulgaria has a population of 7.8 million, but its central position in the Balkans region means
that a population of around 60 million lies within 500km of Sofia, with a network of
international motorways crossing the country allowing access to Western and Central Europe, the
Adriatic, the Black Sea coast as well as to Russia and Asia.
The country has one of the fastest economic growth rates in Europe; last year the economy grew
by 5.3 per cent, with this year's estimate put at 4.9 per cent. In addition, it has
single-digit inflation and a relatively stable currency.
The economy has been buoyed by the fast-growing tourism sector, centred on Bulgaria's ski
resorts and Black Sea coast, and by foreign direct investment, which rose by nearly 90 per cent
in 2003 and then by a further 14 per cent in 2004 to reach €2.1bn, according to provisional
data from the Bulgarian National Bank.
Ralph Holland of C&W/H&B comments: "The property market is still relatively
immature compared with those of the Central European countries that were part of the first wave
of the eastward expansion of the European Union, such as Czech Republic, Hungary and Poland.
This in turn opens the door for much greater possibilities, in particular given Bulgaria's
geographical location as the gateway between East and West."
The big international food retailers, in particular Metro Cash & Carry, pioneered the
development of the retail sector. Now the market is entering a new phase, with the arrival of
the first modern shopping centres. A key scheme coming onto the market later this year is the
Sofia City Center Mall, a development by a local company with 22,000 sq m of gross lease-able
retail and leisure. "Leisure is another area with plenty of market scope as it is as yet
an undeveloped concept in Bulgaria," says Valeri Valtchev.
The logistics sector has seen a growing demand from occupiers and interest from investors,
given Bulgaria's strategic geographical location between East and West. Key areas of activity
are around Sofia Airport, the main ports on the Black Sea and the Danube River, and the main
artery roads running east-west and north-south.
In the office sector, prime space in the right location is in short supply, in particular in
the Central Business District. Successful decentralised office markets continue to be Business
Park Sofia, T Alexandrov Blvd, N Vaptsarov Blvd and Tsarigradsko Shosse, which connects the
Central Business District with the airport.
Office rents increased in 2004 for the first time since 1998 because of the increase in demand
from international tenants for quality office space, and demand from the banking and telecoms
sectors. Looking ahead rents are expected to remain stable, with only modest acceleration over
the next two to three years. Prime rents are around €180 per square metre a year, compared with
€220 in Prague and €205 in Budapest
"With more businesses entering the market, demand for high-quality offices is expected to
increase," says Valeri Valtechev. Future opportunities may also exist in towns such as the
second city Plovdiv, and Varna and Bourgas.
Local and foreign private investors, in particular from Ireland, the UK and Israel, have to
date dominated the investment market, but now they are being joined by the new local REITs
(Real Estate Investment Trusts), introduced in 2003, as well as by international property and
venture capital funds looking to expand their geographical coverage in the region. "With
yields at 12-14 per cent and Bulgaria's forthcoming accession to the EU, we have experienced a
higher level of demand from investors," says Ralph Holland of C&W/H&B.
"Till now the route to investment has been through development, given the shortage of good
quality stock," says Valeri Valtchev of Forton. "Now this is changing, and the first
speculative schemes are coming onto the market."