Strong Foreign Investment Fuels Bulgarian Real Estate Market in 2024

In the first half of this year, approximately 92.6 million euros were invested in business properties in Bulgaria, according to data from the consulting firm Colliers International. Notably, over 77% of this amount came from a single transaction involving a portfolio of industrial and logistics properties, as well as construction plots.

The majority of the deals, over 81%, involved income-generating assets, with the remaining transactions being speculative real estate deals. A significant portion of the investments, 74%, was directed towards industrial and logistics areas, followed by hotels at 15%, offices at 8%, and construction land at 3%.

The returns on prime real estate remained stable from the previous year, with office and commercial spaces yielding 7.75%, and industrial and logistics properties at 7.50%. Local investors have been increasingly active in the Bulgarian market in recent years, although this trend paused in the first half of this year, with international capital accounting for 77% of the total investment volume.

The broader region of Central and Eastern Europe (CEE) has seen a reduction in investment volumes, reflecting a trend that began in Western Europe due to rising interest rates. In Bulgaria, the investment volumes were nearly 25% lower compared to the previous year, whereas in CEE, the decline exceeded 50%. Despite this, Colliers anticipates that 2024 will see an increase in investments, though still below the levels seen before the interest rate hikes.

In more attractive markets like Poland, the Czech Republic, and Hungary, a trend of price convergence is expected as the European Central Bank (ECB) reduces key interest rates, leading to a quicker recovery in investment volumes. However, Bulgaria has yet to...