In 2024, the technology sector shined on the Bulgarian real estate market
Investment acquisitions by IT companies in the past 12 months exceed €360 million

© ECONOMIC.BG / Krasimir Svrakov
High-tech companies have emerged as the new stars of the Bulgarian commercial real estate market in 2024 with the completion of several landmark deals. Alongside traditional players, they have contributed to the market's steady growth with the volume of investment acquisitions in the past 12 months exceeding EUR 360 million.
This is evident from data compiled by the commercial real estate consulting company Cushman&Wakefield Forton.
According to them, traditionally in Bulgaria, buyers in the office properties category remain the most active, with over 50% of deals having been concluded there. In the retail space, hotels and industrial properties, there have been several large acquisitions, including entire property portfolios.
We consider as a positive trend the fact that local businesses are active and create liquidity in the market, which leads to over 60% growth in investment volume for the current year compared to the previous one," commented Yavor Kostov, Managing Partner of Cushman&Wakefield Forton.
The biggest investors
According to his observations, in all market categories, key large investors are emerging in the form of companies and corporate groups. For industrial properties, these are CTP and Lion's Head Investments, in retail spaces - Trinity Capital and Videolux. High-tech companies, such as EnduroSat, Chaos Group and SiteGround, have established themselves in various segments of the property market, while with hotels, large groups traditionally grow through acquisitions.
The property market segments
Office rental activity remains relatively good compared to previous years, as does the vacancy rate – around 15%. However, deeper analysis shows that the market is growing feebly and is mainly driven by contract renewals and relocations.
Given the limited demand, supply is growing at modest volumes, and in 2024 it is not expected to exceed 60,000 sq m. This leads to relative equilibrium in the market. However, next year, several landmark projects in the central part of Sofia and along the major boulevards will be completed. At the same time, significant new construction projects are taking shape in the Paradise Center and Vaptsarov Blvd. area - some of them have been started, and others are in the planning phase with a building permit. This will considerably swell the supply of modern office spaces in the coming years, which previews a challenging market environment for older projects if demand does not recover.
Construction activity continues in the retail park segment. It is expected that over 81,000 sq m will be completed in 2024, and another 103,000 sq m in the following year. The growth of this type of space is driven by several factors - stable consumption and the desire of retailers to expand, as well as the gradual increase in rental prices.
While the shopping centers market is already in a mature phase and no serious shifts are expected there, the consolidation of retail park ownership is underway. With the ongoing construction of new areas, larger players are emerging seeking to develop projects under a common brand in various cities.
Construction activity in and around Sofia is very active in the industrial real estate segment. Preliminary data indicate that in 2024 around 200,000 sq m will be completed. This will probably be the third-best result in the last 15 years. The high construction activity in the sector is expected to continue in 2025.
As per tradition, in the industrial segment, the dominance is held by privately owned sites. This is the situation in 2024 and is also expected to be the case for next year. Medium-sized sites (under 10,000 sq m) hold the major share this year, but a reversal of the trend is expected in 2025 with an increase in completed sites of over 10,000 sq m. This is largely due to the formation of large speculative investors in the market that are developing logistics project portfolios, according to Forton.
Translated by Tzvetozar Vincent Iolov