• Highlights from Colliers International’s office market overview of the first half of 2017

The office market dynamics continued during the first half of 2017. Colliers International’s latest overview revealed 64% gross take-up growth[1], compared to the same period last year.  The credit goes mainly to the companies from the outsourcing sector. They kept their high share in the total transactions volume, equal to 67% during the first half of 2017. Convenient location, modern and functional layouts, and comfortable workspace remained their key tenant requirements.

Contract renewals were 18% of the transactions, registered by Colliers. Relocations were also 18%, followed by expansions with 17%. In 3% of the cases, companies, entering the Bulgarian market, initiated the office search. Colliers’ report shows that 52% of the transactions with class B offices were for relocation purposes. The leading position was for pre-lease deals – 43%, due to the lack of sufficient existing modern class A office space.

The start and restart of building construction continued, in line with the demand intensity. Five projects are planned for completion by the end of the year. This represents 90,000 sqm additional office space, a considerable part of which is already leased out. The affordable rental levels of quality office space under construction are among the top reasons for the increased pre-lease activity. In general, asking prices grew slightly over the period, due to the insufficient supply of quality offices.

Class A and B office vacancy in Sofia dropped to 170,000 sqm. with 25% share of class A offices, which were most sought after. This is about to change in a way – the market is maturing, leading to reclassification of buildings, whose parameters will now correspond to the characteristics of class B offices. Tenants will be ready to consider more and more this type of buildings, if they have communicative locations. Constrained class A supply and low vacancy are projected to further direct attention to class B buildings, which are characterized by affordable rents, good technical parameters and functionality.

In terms of the establishing of office locations, the area on Tsarigradsko Shosse Blvd., between Capital Fort and 7th-11th kilometer, has been growing in popularity for reasons, such as developed road and transport infrastructure, availability of subway and underground parking. It is part of the Suburbs Area, which has the highest concentration of class A (67%) and class B (61%) offices.  More information regarding the existing supply and the respective office locations is available on This is an online platform, developed by Colliers, which includes a detailed register of the contemporary office buildings in Sofia.

Colliers’ forecast is for continued pre-lease activity, driven by limited supply and widening asking prices range. With regard to that, in addition to Sofia, other big cities in the country (Plovdiv, Varna, Burgas, Veliko Tarnovo, Ruse) will be on the office tenants’ radar.

[1] Gross take-up – the total floor space known to have been let or sold during the period and includes the following transactions: pre-leases, new leases, expansion, contract renewal/renegotiation, sub-leases, sale & leasebacks.