Bulgarian industrial zone properties to bring in 2006's top yields

May 2, 2006 - Dnevnik (28.04.2006)

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The segment of Bulgaria's property market that will yield the highest return in 2006 are the multifunctional industrial zones, shows a survey conducted by the InvestBulgaria Agency released at the opening of the Imoti Expo property exhibition in Sofia.

The development of industrial zones, which are forecast to return 12% in 2006, will be a key priority for the InvestBulgaria Agency, said deputy chairman Pencho Nenov. The government will invest in the construction of the necessary infrastructure, said the official, pointing to the support that has been extended to the industrial zones in Kuklen, Rakovski and Rousse and to high-tech park Opticoelectron-Panagyurishte.

Hotel developers are shifting towards the 3- and 4-star segment. The market share of 3- and 4-star hotels in Bulgaria rose from 50% in 2002 to 67% in 2005, it was announced at the exhibition. Ample supply of office space is expected to bring down rent rates with 2006 yields likely to come in the 9-11% range.

A significant number of suburban Class B office buildings is expected to be placed on the market in Sofia this year.

Bulgaria's property market absorbed over 250 mln euro in foreign investment in 2005 which is 12% of the year's overall foreign investment influx, said Nenov.