Bulgaria property news.

Bulgaria property news.
Information about the Bulgarian propertymarket - news about off plan property development, ski properties in Bansko and Borovets and property investment in Bulgaria.

Further investment boosts Bulgarian property market
Hardly a week goes by without news emerging from Bulgaria about another planned investment project as the country looks to enhance its reputation in advance of EU accession.

In addition to large-scale property investment, officials are also working hard to stamp out corruption and to combat some of the other legal concerns that have been Bulgaria's perennial weakness in years gone by.

It was reported in the Sofia Echo today that health minister Radoslav Gaidarski is now in the process of producing an anti-corruption strategy for healthcare institutions. This forms part of the country's overall desire to rid itself of the problems that have plagued it in the past, with prime minister Sergei Stanishev fixed on the idea of modernisation at every level.

The new strategy for the healthcare institutions is in direct response to the European Commission's monitoring report on May 16th, it is reported.

Bulgaria was criticised for levels of corruption in both healthcare and education, but the rapidity of the response in beginning this anti-corruption strategy is testament to the resolution to meet any conditions specified by the EU.

The issue of EU accession is important for Bulgaria for a whole host of reasons, but it is also particularly significant for property investors who expect the occasion to coincide with notable house price growth in the country.
Optimism high in Bulgaria
Accession to the European Union is inevitably going to play a central role in the future of property investment in Bulgaria.

Bulgarian property is already proving popular with investors looking for long-term capital growth, but there is no doubt that accession to the EU will encourage many more to purchase properties in the country with a view to capitalising on the extensive house price growth that will presumably ensue.

The road to EU membership has certainly been a bumpy one for Bulgaria and reports on its progress have let officials know that there is still some work to do. Despite this, financial experts in the country are seemingly confident that everything is on track to join on January 1st next year. The implications for property investment could be immense.

Speaking to the Sofia News Agency, Mr Maxim Behar, head of the Bulgarian Business Leader Forum, said: "I am even more optimistic than before. I am sure that we are going to join the EU on January 1st 2007. The tone of the monitoring report is very positive."
Carving out his own niche
Harrie Niemeijer from Friesland, The NetherlandsHarrie Niemeijer came to Bulgaria a year and half ago, to set up a furniture factory for the Dutch company Bylsma in Lovech, under the name Belsma furniture EOOD. Having expanded as far as possible within the Netherlands, the company (which produces tables, chairs and cabinets) set its sights to Eastern Europe. They asked Niemeijer, who had previous experience working in countries in the region with his industrial IT company, to take part in the venture and he accepted the challenge.

Initially, Romania was chosen as the location for the new factory, but, says Niemeijer, they ran across problems trying to set up a business there. The move to Bulgaria came about by chance. Some colleagues were in Croatia at the time and they decided to meet up and visit Bulgaria. “We travelled around by car, and I thought: ‘hey, why not Bulgaria?’”. It offered the “opportunity”, the “place”, and the “people”. They found a suitable property and bought it from the old Balkan company. “I knew that I had about six months building time – that’s not a lot.” Then there were considerations such as licences, which are “very difficult to get here”, but Niemeijer was aware of this fact when he made the decision to locate the factory in Bulgaria, and remained undeterred.”I had a good feeling; it was just a feeling about the municipality Lovech which I was dealing with”.

Of the move into Eastern Europe, Niemeijer says that one of their biggest competitors in the future will be China: “For me it is a challenging start to beat the Chinese in the future and keep the factory in Holland through Bulgaria. So, the automation grade is high and our target is organisation by efficiency and logistics.”

As with the setting up of any new business venture, the initial organisation was challenging. “Imagine: you are a stranger and you are sitting in your hotel and organising everything from your hotel room or a terrace.” But, things progressed quickly. Construction started in October 2004. In January, they installed the equipment, and production started in March 2005. A year later, they had employed 80 people, which will grow at the end of the year to 120, and after that to more than 200.

The factory in Lovech produces cabinets and they have also started a special line producing designer furniture for Rietveld by Rietveld, family of the famous designer and architect Egbert Rietveld. “The family decided to introduce small quantities of licensed furniture onto the market. And I’m very pleased that we can do this here in Bulgaria.”

Belsma is still the only foreign investor in Lovech, where, he says, there are only two or three other big companies. “We are a small enterprise, we are not a huge company, or a big American company with 2000 people or whatever, and we also don’t want to be that. The nice thing is that I think they are happy with this and we are happy with them,” he says of their workforce. At the beginning, it was difficult to find experienced personnel, so they invested in intensive training programmes. Now, he says, this has paid off and things are running smoothly because people have more and more expertise, and rather than going to work abroad they stay – not just because of the salaries, but because of the work culture: “We are paying in the European way of paying – with taxes, sickness leave, only a maximum of 40 hours a week and holiday time.”

The Rise And Rise Of Bulgarian Property
Anyone who has bought property in Bulgaria will tell you that the prices are so low, it is impossible to lose. Prices will continue to rise. The only uncertainty is by how much. And how long.

The Balkan country already has had 12 years of increases. And the National Statistical Institute reported in January that the average sales price per square meter for residential properties in Bulgarian cities had gone up 36.6 percent in the previous year.

But residential prices in Sofia still average only EUR 600, or USD717, per square meter, or USD66 per square foot. That is much less than the EUR 750 average per square meter in Bratislava, Slovakia; EUR 850 in Bucharest and EUR 1,500 in Prague, according to the National Real Property Association of Bulgaria.

Those numbers have pushed Bulgaria squarely into the real estate spotlight, attracting West Europeans lured by the current hot place for vacation homes and, to a lesser extent, for investment. And real estate agencies from small European countries like Ireland and Malta have opened offices in Bulgaria in an effort to expand their businesses.

Foreigners were involved in 23 percent of the 220,000 property deals registered in Bulgaria in 2005, transactions that totaled more than EUR 4 billion, according to the property association. The year before they generated 18 percent of all sales, or EUR 3.36 billion.

Overall, real estate is one of the fastest growing sectors in the national economy, which grew by 5.2 percent in 2005. Observers say that while the foreign interest certainly has not hurt, the country itself is producing much of the change.

"I don't think this kind of growth can be supported by international investors," said Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors in London. "It must be driven by organic, domestic growth."

Much of the interest is linked to the country's expected entry into the European Union. Bulgaria and its northern neighbor, Romania - the two poorest of the former Soviet bloc countries in Europe - are on track to join the European Union on Jan. 1, 2007.

Hotel for Sale Luxor
This hotel for sale in Luxor, Egypt is a modern hotel situated near the Nile, some 350 metres from Luxor Temple and Museum, and 15 kilometres from the airport. The 55 air- conditioned guestrooms are spread over four floors and have simple modern decor with wicker furnishings. All guestrooms open onto balconies and include satellite television, minibars, direct-dial telephones, and bathrooms with designer toiletries.
After a dip in the pool, hotel guests can relax with a drink at the poolside bar. The Restaurant is a buffet restaurant, serving continental and middle eastern food in a relaxed atmosphere. The Bistro Restaurant, situated in the foyer, serves light meals and drinks. After a meal, guests can chat over drinks in one of the bars, or take advantage of round the clock room service. The hotel has laundry facilities, and multilingual staff at the 24-hour front desk can exchange currency and advise on local amenities and attractions. Guests can visit the Luxor Temple and Museum 350 metres away, or the Karnak Temple three kilometres away. Luxor International Airport is 15 kilometres from the hotel, with an approximate driving time of 20 minutes.

Facilities:
Restaurant
Swimming pool
English style pub
Laundry service
Telephone and fax service (International)/Conference room.
Baby Food
Gift Shop
Bamboo styled, private balconies
Telephone
Color T.V
In-house video
Satellite T.V. channels

Area Activities:
Luxor Temple & Museum - 350 metres
Karnak Temple - 3 kilometres (2 miles)
Valley of the Queens - 25 kilometres (16 miles)
Valley of the Kings - 28 kilometres (17 miles)
Real Estate Egypt
Spanish property agent - Lemon Tree Villas, prepares the way for property investors in Egypt. Trading in Egypt under the name Elite Properties Egypt they have recently opened new offices in the ancient city of Luxor to cater for the rapidly increasing demand for residential and commercial development properties from both European and North American investors.

"Interest in the investment property market in Egypt is beginning to awaken as the wider world becomes aware of the incredible investment opportunities and incentives available for investors in Egypt." Says Peter Jennings of Elite Properties Egypt.

The key factors attracting overseas investor interest include Egypt's fast growing tourism sector, the fact that the government is continuing to commit to legislative initiatives designed to enhance the investment climate and the fact that property prices in Egypt remain low and affordable whilst demand for quality property for sale and short term let is increasing.

The majority of real estate investment interest is currently centred upon the resort areas of Egypt and the major cities like Cairo, Luxor and Alexandria.

"In the resort areas on the Red and Mediterranean Sea coasts property investors are tapping into the increasing tourist demand for short term rental accommodation." This market is currently returning the best rental yields countrywide.

The second home resale market in the resort areas is also beginning to present profit potential on the underlying capital investment made because more overseas buyers are seeking holiday homes or second homes in these areas. Egypt is close at hand for European holidaymakers and therefore owning a holiday home in this exotic location makes perfect sense for many European travellers.

In Egypt's main cities like Cairo, Luxor and Alexandria overseas property investors are again seeking to profit from rental returns, and with the creation of brand new luxury residential property districts like Cairo Heights, international interest is increasing.

Overall the future prospects for the property market in Egypt are positive. Egypt is a politically stable country and one currently enjoying the best relationships with many of the world's most influential economies that it has ever enjoyed. The economic climate in Egypt is open for investment and investors are being actively encouraged by taxation breaks, low labour costs and a country that has a growing middle class who are beginning to exercise their increased purchasing power.

Overseas real estate investors are aware that the growth in the purchasing power of the domestic market is fantastic for the long-term profitability of all investments in Egypt's property sector. The overseas tourism and second home markets will account for good yields and returns but a growth in domestic demand and purchasing power will allow investors to more aggressively target Egypt safe in the knowledge that they have a wider market to potentially profit from

The changing face of European property investment
With property investment television programmes dominating the listings, it is inevitable that real estate is beginning to attract more and more potential investors.

Most of these programmes are also becoming increasingly adventurous in terms of the places they cover, which is having a direct result on the investment patterns of UK residents.

In a report for Antara News, for instance, journalist David Burrows says that many investors are beginning to turn away from France and Spain in search of better value. He suggests that Bulgaria is a prime example, in that prices in the country are still exceptionally low but experts are predicting something of a boom before long.

"The EU may be balking at Bulgaria's failure to rein in organised crime but second-home hunters seem to have no worries," pointed out Mr Burrows.

The Sofia Echo has today reported that the coastal resort of Sozopol is seeing the highest demand for real estate at the moment. Referring to a report in 24 Chassa, the publication points out that the seaside resorts of Tsarevo and Ahtopol are also experiencing high demand, with slightly cheaper prices in both of these areas.

Bulgaria does have an advantage over many of its near neighbours in that it offers a hugely diverse selection of opportunities for property investors. There is great potential around the Black Sea regions but there has also been staggering growth in Bansko, with investors taking advantage of the rising number of holidaymakers heading over for cheap ski breaks each year.

While it may seem a small point, Bulgarian property is also benefiting from the fact that many investors are simply looking for a change and there is a certain kudos associated with buying a property somewhere slightly out of the ordinary.
Bulgaria a hot property destination for Welsh
The number of Welsh families buying property abroad is on course to double within the next seven years, with Bulgaria proving the hot destination.

Even first-time buyers priced out of the domestic market are turning to the former Soviet bloc nation to get a foothold on the property ladder, says Swansea-based Britannia Overseas Property.

Britannia - one of the UK's leading developers in Bulgaria - say impending EU membership and low property prices are helping money pour into the Black Sea resort nation.

Such is demand, Bulgaria last year recorded an average property price increase of 47.5 % with experts predicting values will more than double over the next 12 months. Britannia's Bulgarian ski and coastal development properties sell on average for £45,000.

Attracted by its long, hot summers and the Black Sea beaches' white sands the number of foreign tourists visiting Bulgaria has increased by almost 50%, with those from the EU growing by nearly 90%, over the past two years.

Andy Moore, former Wales rugby international and Britannia's joint managing director, told the Western Mail yesterday, "The majority of our local investors are buying properties on the coast or in mountain resorts for capital growth, rental income and a chance to visit for their own holidays.

"Many have previously owned property in Spain and the UK, but are moving their money to Bulgaria, as some see it as like Spain years ago, and Ireland before it joined the EU, offering the potential for similar returns."

Marc Davies and his wife Dawn bought a studio apartment in the Bulgarian ski resort of Bansko a month ago for £35,450 as an investment. The couple, from Mayals, Swansea, say they were put off buying an investment property here by inflated prices.

Salesman Mr Davies said, "If you buy property here now the rental income will not even cover the mortgage. There are very few properties here now where you can completely re-do the house and then make money on it."

Mr Davies, 32, who has never visited Bulgaria, is hoping to rent out the property during the ski season between November and February's end.
Bulgaria faces up to more work
It is looking increasingly like Bulgaria's accession to the European Union will be delayed, raising a number of issues in relation to property investment.

Purchasing an investment property in Bulgaria has been a popular strategy for a number of years and the country's progress in the vast majority of areas has been staggering since membership talks began in 2000.

The property market in Sofia, for instance, has benefited from a series of redevelopments, while the ski resorts are proving incredibly popular with tourists from around the world. Developments in Bansko have been significant in the last couple of years and investors have are now able to look forward to excellent rental potential as well as impressive capital appreciation.

A similar scenario has developed in the Black Sea regions, which tourists are beginning to see as an alternative to some of the more traditional options in Spain.

Sunny Beach is one of the key growth areas on the Black Sea coast and it boasts an impressive beach that is eight kilometres in length. The future certainly looks bright for investors in Bulgaria and the groundwork has already been laid for future growth, but there are undoubtedly hurdles that need to be cleared.

Bulgaria signed a joint accession treaty in April last year and accession was pencilled in for January 1st 2007.

According to reports, however, the European Commission is likely to tell both Bulgaria and Romania that a number of standards need to be met before EU membership is an option.

As reported by a special BBC report, the EU actually has the option to invoke a clause in the accession treaty that would allow for the postponement of EU entry until 2008. The key concern for Bulgaria in particular is corruption, although a series of measures are now in place to tackle this perennial problem.
Property investors observe Bulgaria's progress
The European focus is very much on Bulgaria at the moment and few will be watching more intently than those in the property investment business.

In the last few years, Bulgaria has developed at an impressive rate and the fact that the country is currently being considered for EU membership is testament to this.

At the same time, Bulgaria's problems with law and order have been well documented and it is an area that threatens to delay both EU accession and the growth of the property market.

Nonetheless, Franco Frattini, vice president of the EC responsible for justice, freedom and security, says that he is impressed with the "enormous progress" that has already been made, reports the Sofia News Agency.

Mr Frattini is reportedly positive about the judiciary agenda that has been proposed by Bulgarian chief prosecutor Boris Velchev and he has stressed that Brussels has a duty to support in the consolidation of institutional reforms.

Growth in the Bulgarian property market has been impressive even without EU accession and the country is already making strides in terms of its attractiveness to tourists and investors
Press praises Bulgaria’s property market
The Wall Street Journal and London-based newspaper The Independent have published articles praising property market opportunities in Bulgaria.

In an April 18 report in The Independent, which describes Bulgaria as a “beautiful country”, writer Robert Nurden says that property investment in the country falls into four main categories.

The first is in the capital city, Sofia, which is “growing economically and geographically faster than any other former East European capital”. The property boom has now hit the centre, with locals themselves pitching into the market, always a good sign, the report says.

“With the country on the threshold of EU membership – and entry into the euro itself likely in about three years’ time – an international and transitory population in this ‘engine of the country’s growth’ is inevitable. This means a huge demand for good rented accommodation.”The Independent says that an average, two-bedroom, newly built apartment in the centre sells for between 69 000 pounds and 87 000 pounds (195 245 to 246 190 leva), and values are “rising almost by the day”. The rent from such an apartment would be up to 700 pounds a month, according to Robert Jenkin of estate agents Bulgarian Dreams.

“‘These are fantastic investment opportunities in a city that is becoming more cosmopolitan and whose economy is stable and performing well,’” he is quoted as saying.
Dreaming snowbirds warned to make a reality check
Growing numbers of Britons are retiring abroad, swapping the cold and rain for mostly warmer climes. No wonder that they are now known as “snowbirds”.

About 1m British pensioners are drawing their state pension abroad, according to the Department for Work and Pensions. This is up from 770,000 in 1997.

Britain’s former imperial reach explains part of the pattern with Australia accounting for 241,000 and Canada for 151,000. But sunnier European destinations have a strong appeal with Spain accounting for 71,000, Italy for 32,000 and France for 31,000.

“There has been a shift from a second home for retirement being regarded as a luxury to it being something attainable by most people with the drive to achieve it,” says Liam Bailey, head of residential research at Knight Frank, the estate agent.

In 1995 the average price paid for a second home overseas was 165 per cent of the average UK property price. By 2005 it had fallen to 90 per cent, reflecting in part steeper house price inflation in the UK but also the fact that second homes had become more of a mass market aspiration.

Internationally, recent rapid growth in house prices has slowed, according to the global house price index launched last month by Knight Frank. The average house price globally rose an annualised 6.1 per cent in the first quarter of 2006 compared with 10.9 per cent in 2004. But the news for Britons selling up to retire to the Mediterranean is not so positive. Spain rose 11.6 per cent while France was 9.3 per cent higher compared with an increase of only 5.3 per cent in the UK.

Despite recent unfavourable price trends, the impact of growing prosperity, cheap flights and the low cost of borrowing – even lower in the eurozone than in the UK – mean the trend for retiring abroad is expected to accelerate.
That the sun may shine
Magdalena Rahn travels to Bulgaria’s southeast wine-growing region to learn about the traditions in this area and the wine co-operative that is fighting to preserve them.

Friday: first impressions
Even in the twilight they stun the eye: striated tan cliffs, topped with scrub verdancy, a lone pine on pinnacle, twists of pikes like sandstone Matterhorns. We are in a taxi from Sandanski, after a four-hour bus ride from Sofia the first Friday evening in April, on our way to Melnik for the weekend.

One enters upon the panorama unexpectedly, among chapparel hills; the road turns: a sudden hewn valley.

“It’s natural,” says Josh Kroot, a US Peace Corps volunteer from Pazardjik who has invited me to come to see the projects on which he and Audrey Amara, a US Peace Corps volunteer from Kazanluk, have been working since the beginning of 2005.

The two regularly go down to Melnik to speak with various viticulturists and oenologists about problems they as local producers have been facing in bringing wine and grapes to market. Most of the people they met while travelling with another Peace Corps volunteer, Joe Ferguson from Kolarovo. Though possessing only slight information about vine cultivation and winemaking, Audrey and Josh soon recognised there to be a number of ways to work with people in the region. Through the Peace Corps, they were put in contact with Volunteers for Economic Growth Association (VEGA), a group funded by USAID, which helped them to bring a wine expert from California to the region and evaluate the potential to create an organisation that would brand and sell the wine that was being made by small local winemakers.

“We’re almost there,” he says, “and after we drop our stuff off at Hotel Mario, we’ll go to this great place for dinner.”

Upon reaching the town – officially the smallest in Bulgaria with a population of 275 – one immediately remarks its picturesqueness: all the buildings must be built and maintained in the Bulgarian National Revival style. And it’s clean, and fresh, and charming. A canal runs down its one main street, itself lined with guest houses, hotels and mehanas. Still at 8pm, one can make purchases from selections of local wines, honeys and fruit preserves.
More British Tourists Visit Bulgaria's Ski Resorts.
Balkan Holidays tourism agency registered a 35 per cent increase in the number of British tourists who visited Bulgarian ski resorts.

More than 25,000 people arrived in Bulgaria, using the services of the company, Dnevnik newspaper reported. For the 2004-2005 season Balkan Holidays registered a 70 per cent increase in tourist figures, compared to the numbers for the previous season.

Company representatives said the new infrastructure and hotels in leading ski resorts like Bansko, Borovetz and Pamporovo naturally increased the interest of foreign tourists.

Dnevnik reports Balkan Holidays is one of the leading companies on the British market, managing to bring high number of foreign tourists to Bulgaria. In 2005, the company attracted more than 165 000 British tourists, interested in both summer and winter tourism opportunities.

In the beginning of this year the company registered a slight decrease varying of three to four per cent. Other companies also complained from the lower interest toward summer vacation opportunities in Bulgaria.
Orchid convinced that Bulgaria property market will bloom.
Losses have increased at Orchid Developments, a property and hotel operator specialising in Bulgaria, but the group says it exceeded expectations in its first set of results since it floated on AIM last July.

Orchid (OCH) operates in commercial, residential and retail markets, and since the float has paid €21 million (£14.5 million) for three new development plots in Varna totalling around 38,000 square metres. It is continuing to develop its land bank and says land values are increasing rapidly.

Five of Orchid’s projects are co-financed by the European Bank of Reconstruction and Development which has agreed a €30 million debt facility. This breaks new ground for the financing of real estate developments in Bulgaria, providing long-term funding that was not previously available, says chairman David Holland.

‘The real estate market in Bulgaria remains buoyant and is expected to experience further growth’ he said.

Group revenue rose from €1.1 million in 2004 to €3.4 million in the year to 31 December. The net loss before tax was €1.175 million against €953,000 in 2004.

Orchid says the net loss increased because of an increase in the size of the development team and higher expenses arising from increased activity.

The results reflect a profit of €1 million from of the sale of 70 of the 167 units in phase one of the Orchid Sofia Hills residential project. Total sales were €7.25 million.

Since the year-end a further 40 apartments have been sold for €3.3 million taking the total to 110 worth €10.6 million.

Another source of revenue was the four-star, 224 room Yavor Hotel in the Golden Sands beach resort close to Varna on the Black Sea which is owned and operated by the group.

Last year Orchid completed a second hotel, the Golden Yavor, on an adjacent site providing 167 units, mostly self catering apartments. The Golden Yavor operated for half the season and the combined revenue of both hotels was €1.7 million.

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