There is a significant improvement in the overall business sentiment among office occupiers in Bulgaria, a survey by realtor Colliers International shows.
According to a survey recently conducted among more than 5,000 recipients of Colliers International's Office Newsletter, 53% of respondents believe the general outlook for the business in 2011 is positive compared to 2010, while only 21% were optimistic six months ago.
The research shows that the share of companies with a negative outlook on the development of their business has fallen from 56% in May to only 11% in November 2010.
A total of 95% of the respondents expect to maintain or increase the number of employees in the first half of 2011, with only 5% planning cuts in the staff.
'The increased optimism among occupiers brings confidence to make forward-looking business decisions, and this will fuel the real estate demand', comments Anton Slavtchev, Manager – Offices at Colliers International.
"Rental rates have reached very attractive levels, and many companies are taking advantage of this situation by expanding, re-negotiating or relocating their office premises, " he added.
The company expects the total net absorption on the Sofia office market to be close to 110,000 square meters for 2010, up by 42% over 2009.
The majority of the companies participating in the survey are active within services (37%), with 12% from financial services and 9% from the media, advertising and marketing sector.
Small and medium-sized businesses remain the most prevailing, with more than half of the responding business employing less than 50 people.
Right before its accession to the European Union in 2007 Bulgaria emerged as the new shining star for investors in office facilities development. Three and a half years later, the office market was hit by a period of relatively low activity due to the recession, but the first green shoots of recovery emerged at the end of 2010.
The market remains focused exclusively in the capital Sofia, which is at a stage when any client might be able to find suitable premises or expect those to appear at a suitable time.
Assessed in comparison with other countries in the region of Eastern and Southeastern Europe, Bulgaria's office market is keeping its edge.
Yields have been rapidly declining in the old hotspots of Central and Eastern Europe for the last few years and investors have been pushed further east to countries, including Bulgaria.
What the country offers them are lower prices, higher returns and relative security.
Bulgaria's capital Sofia made recently its way into the top ten office markets in Europe and the Middle East in terms of construction volume to be built by 2012.
Sofia ranked next to Paris, Brussels and St Petersburg since in each of these cities some 600-700 thousand square meters of office properties are being built.