March 06, 2018

Industrial and warehouse real estate market analysis for Bulgaria in 2017

Industrial and warehouse real estate market analysis for Bulgaria in 2017

The demand and supply of warehouse real estate in 2017 was varied and dynamic, according to analysis from http://bgsklad.bg/analysis based on the reports of its regional representative, and the owner of the platform Simeon Mitev.

According to Radoslav Konov - a regional representative of bgsklad.bg in Sofia, for 2017 there has been a demand of warehouses mainly from 1,000 sqm to 5,000 sqm with a better quality that complies the European requirements, regardless the high price. The market of the areas up to 300 to 700 sqm is not very active. Konov added that within the previous year, small and larger deals have been concluded. Demand and supply of renting large and quality industrial real estate continues is in its progress at present. Konov has also stated that there is increase in demand in Sofia but the law supply of refrigeration premises in summer that continues even now. In the previous year, two more significant deals on renting of warehouse areas has been concluded, the first one has been performed in the middle of 2017 with renting area of 8,000 sqm a warehouse area of the wide centre and in the end of the year - a deal for 10,000 sqm in the area of Elin Pelin Station – Novi Han. According to him, the forecasts for 2018 are that new and large investors shell continue to look for new, modern areas that meet the European requirements on warehouse areas.

Atanas Laskov, a representative of bgsklad.bg in the city of Plovdiv shared that the previous year is one of the most dynamic year on the industrial real estate market. Deals were concluded that wouldn’t have been possible two years ago. According to Laskov, the market has obviously caught up with the prices and the investors has become more confident and undertaken larger deals. In Plovdiv few deals has been concluded on sale of warehouse and production premises aiming at investment, plot for construction and renting of industrial property. For the last year, the prices of new warehouse areas rate is table about 3 - 3.5 Euro, and the prices for the production areas from 3 to 4 EUR per sqm. There is a growth in plot deals that are directly related to the location and adherent infrastructure. The price vary from 25 to 100 EUR per sqm. There is a demand of plots that are in specific area due the fact that the number of such plots is limited and the prices are higher. The market is strong and stable. Laskov summarized that for the last 2017 we have witnessed the successive boom and it is expected this trend to continue that year.

The market of industrial real estates in Varna, according to our regional representative Toni Tanev is that the last 2017, the basic renting levels of production and warehouse areas are kept in the specified range between 2 and 4 EUR per sqm as a net price per month. The demand of the newly built warehouse premises is increased in the range between 300 and 500 sqm.

There is an increasing demand of licensed warehouses for food products with operational area between 200 and 400 sqm as well as independent warehouses with temperature mode, equipped with refrigeration premises. Monthly net rent rates of the independent refrigeration warehouses are within the range of 12 and 15 EUR for long term renting as in this segment we report a clearly noticeable shortage of supply.

There is an increased interest from renters in high level distribution warehouses for wholesale with areas over than 1000 sq. m. situated in the modern urban premises. Renting rate of such areas are estimated within the range of 3.5 to 4 EUR per sqm net price per month.

There is an increased interest in purchasing of commerce-warehouse premises over 300 sqm as for own activity so for investment designation. A defining factor on sale prices is the commerce location.

bgsklad.bg chairman Valentin Kosev expressed the opinion that he main distinguishing feature from Varna is that there is a stable demand of small warehouses with a nice location. The demand in mainly of warehouses between 100 and 300 sqm. The price of new and modern warehouses varies between 2 and 3 EUR per sqm in the North and South industrial zone. The deals concluded in 2017 are mainly for warehouses between 200 and 300 sq. m and houses from 500 to 1,000 sqm. For A class in Burgas, the prices are 3 EUR per sq. meters and for class B - 2 EUR of sqm. This according to Valentin Kosev is the trend line that has been followed since 2016. The average prices for purchase of plots vary from 150 to 170 EUR per sqm. At present and in 2018 there is stability in demand of large areas from 600 to 1,500 sqm.

Valentin Kosev summarized that at present there is a new projects for warehouses that shall be built within one year and that are a subject of consultancy conversations about their appearance and construction.

According to our representative Ognyan Georgiev, the market of industrial real estates in Stara Zagora has been developing with dynamics according within the past year. A specific growth is noticed in demand of warehouses for renting but not in their sale. The demand on such real estates is more than the supply. The lack of investors in construction of new industrial areas is definitely a problem in market developing in 2017. This is the main trend for the city, that there is no sufficient number of constructed industrial and logistic premises.

In 2017, about 8000 sqm of warehouses were rented mainly by logistic companies, and they are used for show rooms for farming equipment, light industry, auto parts, auto services.

The renting prices are at stable levels, with not change. For A class - 5 BGN without VAT and for class B 3.5 for a sqm area.

The average price for purchase of plots for industrial construction is about 20 EUR per sqm.

According to Ognyan Georgiev, there is a trend on setting larger plots for construction of warehouse premises but the process is delayed due to lots of administrative procedures. In this respect the municipality does not provide the necessary assistance of the process. Apart from this the lack of constructed infrastructure by the local authority is an obstacle for the fast implementation of such projects.

According to Angel Ivanov, our regional representative for Pleven in 2017, there was a obvious development on the market of production and industrial estates on the territory of Pleven and Pleven Region. There is an interest in implementation of new productions that were stared the same year, personnel employment, searching for new suitable estates for new construction and repair and reconstruction of old buildings. It is observed a difference between the expected prices by the sellers and buyers but at the same time the real estates are traded when their market value is achieved as for sale and rent of the real estate.

The main demand is for industrial estates, that are located in the industrial zone Zapad, Iztok and Tsentralna, as in the central part, and the interest is concentrated in the business and commercial estates - a production plots and premises, concrete bases, heating materials, construction materials, transportation, tailoring enterprises.

The prices for sale of plots in the industrial area are formed according to the infrastructure and accessibility to main roads at a price from 10 to 15 EUR per sqm to levels of 30 to 35 EUR per sqm, correspondingly on compact areas could achieve even high levels for areas between 1,000 and 5,000 EUR per sqm, interest in agricultural plots is law regarding the procedures on redistribution of the plots and the high uncertainly when and if this would be achieved. Offered prices vary within the limits of 1-2 EUR per sqm for estates that has access to roads and close to the available infrastructure, and reach 5 to 7 EUR per sqm depending their location and the infrastructure proximity.

Grigor Nedev – a representative of bgsklad.bg in Ruse stated that the market of industrial estates in Ruse Region in 2017 is not dynamic. The interest to industrial property is mainly from foreign investors that work in Ruse to buy a plot and built own production base. Their goal is to not rent a premise because their conditions meet their requirements; they need to make expensive investments that are not so favourable. In the renting segment, there is also variety in demand and supply. There is a deficit of new warehouse premises in Ruse. A large part of the deals are on sale of the warehouses for renting. There are investors with available funds that focused their attention on purchasing of industrial properties. The analyses show that this is a safe investment with profitability of 5-8 percent. Rental prices in Ruse are within 3-5 EUR, without VAT per square meter. Prices of regulated plots in the city are different. The prices are about The prices in the new industrial park are in the range of 15 to 25 EUR per sqm. There is a demand of plots with investment intentions in proximity of the planned highway. Grigor Nedev summed up that he is optimistic and that Rose will become a factor in logistics. There is an interest from foreign investors in transferring their production in Ruse region.

According to our representative in Gabrovo, Mihail Seferov there has been an increased interest in 2017 for this region but the supply of modern areas is decreasing. There is an increased demand for land, due to the need for new industrial areas. 


The average price on purchase of regulated plots in Gabrovo are about 17 EUR for sq m, and 9 EUR per sqm for the region. In 2017 there has been increased demand for investment plots in the region. There is an increased interest in renting of industrial plots in comparison with 2016. Mihail Seferov summed up that Gabrovo region is on the top places in Bulgaria on economic indicators, local and foreign investment are growing, and bigger and more serious producers show interest in the industrial areas in the region. Increased demand of quality constructed industrial and logistic plots is expected in 2018.

The following conclusions has been drawn on the basis of the analysis performed for http://bgsklad.bg/  by Simeon Mitev:
There is stability in demand of new, modern warehouse areas and industrial real estates.
The demand of small warehouse areas in the segment up to 500 sqm is stable.
The investors that search to buy land plots for logistics and production areas still cannot perceive the fact that on the basis of the land prices and construction prices their return will be in the range of 9 to 11 years. There is a demand of projects with return rate up to 7 years.
The seasonal demand and rental of warehouse premises in the towns on the Black Sea this year is not only before the beginning of the season but even within it.

Source: BGSKLAD - http://bgsklad.bg/

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