Sofia first in office rents in Europe
Sofia is first in Europe in growth of office rents in the third quarter of the year. For this period, the increase is 7.1% compared to the previous one, with the average level now being 15 EUR per square meter. This is the data of Cushman & Wakefield consulting company, with Fortun being its strategic partner for Bulgaria.
The increase of 7.1 percent is related the lowest segment of the property market for Class A buildings located in the central part of the city. On an annual basis, the increase in rents exceeds 11 percent, according to the calculations. Growth of 13.5 to 14 euros per square meter is also noted for office buildings located outside the center, but the so-called communicative locations.
“Rising office rents are a continuation of the trend in recent years due to the limited supply of premium areas and active demand, but this trend will take into account the fact that the market is already close to the saturation point and the supply is expected to increase significantly in the coming years, “explains Cushman & Wakefield Forton Office Manager Stanimira Pashova.
According to her words, planned office space will be completed in the next 4 years. This will result in an increase in hired offices and will lead to price pressures on the market. “In Sofia, the rental levels of first-class warehouses remain unchanged – 4 euros per square meter, and the commercial streets are similar, where rental rates of a 100 square meter shop are kept around 50 euros per square meter,” it is clear from the analysis .
“Europe’s office markets generally had a strong third quarter, with rents rising 0.7 percent from the previous three months and 2.5 percent year-on-year,” explain Cushman & Wakefield. In the Central and Eastern Europe region, the average appreciation compared to the previous year was 2.6%. Higher levels are estimated to be seen in 12 of the 47 continental markets, with a tangible increase in Germany as well as some regional centers in the UK, such as Bristol, Edinburgh and Newcastle.
“The European office market recorded the highest rental growth compared to the other two segments – commercial and industrial property, with an annual growth rate of 1.8% in logistics areas, while in commercial streets there was even a slight drop of 0.5% compared to the same period of 2017, “says the analysis.