SOFIA (Bulgaria), Aug 16 (SeeNews) — Total real estate investment volume in Bulgaria increased year-on-year to €67 million ($67.8 million) in the first half of 2022, compared to 19 million euros in the same period of 2021, although it did not reach pre-pandemic growth, property consultant Colliers Bulgaria said.
The completion of some transactions has been delayed by the market impact of the Russian war in Ukraine, resulting in a total reduction in volume, said Colliers Bulgaria, which is part of the American professional services and management company. Colliers International investment, in a recent report.
By way of comparison, real estate investment transactions generated €202 million in the first half of 2020 and €167 million in the first half of 2019.
The Bulgarian real estate market was dominated by local investors, a similar trend to 2019, although 2020 and 2021 saw a prevalence of international buyers.
In a trend that is expected to last, investors continued to focus on commercial spaces, which accounted for 41% of all real estate investment deals, according to the Colliers report. Investments in industrial and logistics space accounted for 23%, followed by transactions in office space with 14%.
“The share of income-generating assets prevailed significantly – 67%, out of properties bought for owner occupation, 24%, and speculative properties, 9%. The contraction in total volume explains the particularly high share of the first type of assets,” Colliers noted.
In terms of return on investment, office and retail space and industrial and logistics space maintained their respective levels at the end of 2021 of 7.75% and 8.5%.
Several major transactions are expected to be completed in the second half of 2022, which, combined with an expected recovery from foreign investment, should drive the volume of Bulgarian real estate investment to its usual levels of between 200 million euros. and 250 million euros per year. year, the real estate consultancy added.
In the near term, recent interest rate hikes by the US Federal Reserve and the European Central Bank (ECB) should cool the market and slightly increase investment returns, although currently sellers tend to offset inflation by fixing their prices.