Lots of construction and changes in rental prices seen

Bulgaria has taken the second place in the European Union in the category of construction industry increases in the first three months of 2006, EUROSTAT data has shown.
There is no doubt that the construction industry has all the potential and perspectives to keep this significant growth in the future. This was announced by the European Affairs Minister Gergana Grancharova during the discussion on the theme “Sustainable Development of the Real Estate Sector,” Focus agency reported.
According to the minister, the European funds can be used for different projects - for infrastructure creation, industrial construction, waste depots and purifying stations construction - all those connected to the real estate business development.
An important factor for the real and sustainable development of the sector is the assimilation of EU Funds. Something else is the usage of modern and intelligent building politics, based on the scientific data and on the ecological culture, Grancharova said. She mentioned also that the “The construction industry in Bulgaria is strongly fragmented.”
As she said, there are 1,500 in the small and midrange business sector which can place orders dozen times more than the number which provides full competitive power in the sphere of EU Funds assimilation. She also explained that the EU provides for standardisation in construction and Euro standards, so called Euro-codes, which should be introduced by 2011 in all the EU member countries.
Meanwhile, it became clear that Sofia has one of the lowest rental prices in the main trade streets compared to other European capitals. This is the result of a survey led by the International Company Cushman & Wakefield for the business estate market in the second quarter of 2007.
However, the profit from the shop rents in the trade streets of Sofia has brought high profits for its owners. As per the International company data, 100 Euro per one square metre is the midrange rent for a shop rent on the main Sofia streets, which returns on investment about seven percent to their owners.
Only Warsaw has lesser rents on the trade streets - 80 Euro per one square metre, but they return on investment 7.25 percent. The highest rental prices are found in Prague - 170 Euro per square metre, but they return on investment the lowest profit of five percent.
During the past year the rents in the shops on the Sofia main trade streets dropped by 16.7 percent, reported Cushman & Wakefield. In Warsaw there was a rise of 25 percent for the same period. According to the international agency analysers, the development of the Bulgarian trade areas segment is sustainable, although the supply of the modern trade areas is still comparatively small.
The drop in prices is mainly due to the fact that big investors search for big and modern surfaces, which you can not find even on the central trade street Vitosha, commented the company experts. The expectation is that in the following two years more than 177,000 square metres in trade areas will be opened on the market in the capital.
Sofia kept top prices for rents of modern store areas. The return on investment of the new store houses is about nine percent at the moment, as calculated by Cushman & Wakefield. As a whole, this segment of the real estate market does not develop quickly. According to Sergey Koynov, director of FORTON International, an associated office of Cushman & Wakefield in the country, Bulgaria for the present is in arrears with industrial projects development compared to the other countries in the region. The cause for the high rental prices lies in the poor supply of modern warehouses.
In Sofia, the price is 16 Euro per square metre for offices, while the price pick in the centre of the city is 24 Euro, as the Cushman & Wakefield survey pointed out.