Assets of Bulgarian REITs Up by 67% in One Year

The assets of Bulgarian real estate investment trusts (REIT) amounted to 1.54 bln leva as at the end of the second quarter of 2008, up by 67.3% year on year, data of the Financial Supervision Commission (FSC) show. It should be taken into consideration that a total of 68 REITs were included in FSC's statistical data for 2008, compared to 47 a year earlier.The combined assets of REIT's rose by 7.68% in the second quarter of 2008, compared to the first three months of the year. The REIT's managed 1.43 bln leva assets as at the end of March 2008.A total 56 of the REITs invest in real estate properties other than arable land. They managed assets for 925.78 mln leva as at the end of June 2008.Their assets amounted to 512.22 mln leva a year earlier and stood at 857.93 mln leva as at the end of the first quarter of 2008.FairPlay Properties REIT (114.13 mln leva), Serdika Properties REIT (80.69 mln leva) and Arco Twoers REIT (80.53 mln leva) are the three biggest companies in terms of assets. The last two, however, are not traded on the Bulgarian Stock Exchange (BSE).The six REITs specializing in the securitization of arable land managed assets for 532.4 mln leva as at the end of the first half of 2008.The assets of the six REITs stood at 300.41 mln leva a year earlier and at 482.52 mln leva as at the end of March 2008.The three biggest funds in terms of assets in this group are Bulgarian Real Estate Fund REIT (183.43 mln leva), Elana Agricultural Land Opportunity Fund (153.56 mln leva) and Advance Terrafund REIT (102.35 mln leva).The REIT specializing in the securitization of receivables rank third. Their number has increased from 7 to 9 in one year, while the value of their assets has gone down from 95.38 mln leva as at the end of June 2007 to 77.36 mln leva a year later. The assets of these REIT's totaled 85.6 mln leva in the first quarter of 2008.The top three REIT's in this group in terms of assets are Capital Management REIT (48.36 mln leva), Transinvestment REIT (15.33 mln leva) и Energetics & Energy Savings Fund SPV-Sofia (7.28 mln leva).Source: Profit.bg

German retailer Lidl starts construction of Bulgarian outlets

German retailer Lidl will start building a pilot outlet in the city of Lovech, Northern Bulgaria, said the company. Work on another five outlets will begin by the end of 2008 to be followed shortly be the launch of construction of as many Lidl stores. The retailer hopes to have 10-12 operational outlets here by 2010. The company will also invest in a distribution center. It has bought the site for the center but did not specify the location. Lidl is part of Schwarz Unternehmensgruppe which already has a retailing business here through the Kaufland chain. Market research outfit Planet Retail recently said the discount retailers are expected to own 4% of the Bulgarian grocery market. The local retail market will soon welcome a further two new entrants, Penny Market and Plus.

Household deposits continue to be biggest resource available to Bulgarian banks

Household deposits continue to be the biggest resource available to the local banks, accounting for 36% of borrowed capital in the system, shows data of the central bank on the balance sheet of the industry by late July. In a month, Bulgarian households deposited a further 480 mln levs to bring their deposits to 21.3 bln levs by the end of July. Corporate deposits added 538 mln levs in a month to 20.5 bln levs. Those two segments increase by a monthly 1.6% the size of borrowed funds. Their month-on-month growth rate is close to that of banking assets. The balance sheet assets of the banks rose 1.8% in July to 66.9 bln levs. The banking assets have increased by 37.9% (or 18.4 bln levs) in the past year. Five of the biggest local banks managed over half of the sector's assets by the end of July and retain their market share month-on-month at 57.5%. Credits and receivables (including financial leasing) rose to 52.8 bln levs or 79% of the sector's balance sheet. Corporate credits increased 2.9% month-on-month to 30.1 bln levs while retail exposures added 3.7% to just over 16 bln levs. The year-on-year growth of the corporate and household portfolios is 52.4%. The end-July profit of the banking sector rose 38.2% year-on-year to 842 mln levs.

Credit costs tame Bulgarian housing market

After the banner 2007 when transactions involving residential property rose 4-5% and prices jumped by about 30%, the Bulgarian market in 2008 is calmer and more balanced as the cost of borrowing increases, said Teodora Dimitrova, managing partner at the Era real estate agency. The softening of the market is also evident from the growth forecasts for 2008. Housing prices are expected to continue on the up, adding 15%, a pace twice as slower than last year's. 'Demand and supply on the residential market have reached a parity over the last two months,' said Dimitrova. Data of the Era network of real estate agencies indicates that the busiest residential markets are those in Sofia, Burgas and Varna where construction is also most intensive. Sofia homes start from 670 euro/sq m

Bulgarian pension funds may invest in local water sector

The Bulgarian government will urge the local pension funds to inject some cash in the nation's underinvested water sector which needs to absorb 10 mln euro by 2015, said deputy regional development minister Dimcho Mihalevski.A meeting has already been held with the investment committee of the Bulgarian association of supplementary pension insurance companies to acquaint them with the new bill on water and sewerage services.The two sides discussed the placement of bonds by the water companies that could be added to the portfolios of the pension funds.Milen Markov, chairman of the investment committee, said the government could put in place a mechanism to ensure that a portion of the future revenues of the issuers will be set aside to repay the issued debt.The pension companies are interested in buying at interest rates close to the market levels and yield levels higher than those of government securities and lower than corporate bonds, said Markov.The idea will be discussed also with the EBRD and consulting companies.A failure to raise the money needed to overhaul the nation's water supply infrastructure would push the completion of the reform back towards 2035-2040.

Return on investment of Bulgarian properties

New report of the Bulgarian think-tank Industry Watch analyzes the residential property market in Bulgaria for the first quarter of 2008. According to the information there the return on investments (ROI) in Bulgaria’s property is more dependent on sale price than on rental yield.
For the Q1 2008 the rental levels for two bedroom apartments increased by 4%. For the same period the purchase prices of residential properties are recording a faster growth. Thus the property investment pays out in 188 months taking the sale price into account while for rental yields it pays out for 234 months.

The Industry Watch report includes a forecast with annual growth in property prices in Bulgaria of 13-14% in the next five years. According to the report the foreign investments in real estate will decrease slightly.

John Beyrle Opens an Extremely Innovative Bulgarian-American Cultural Center

The US ambassador in Bulgaria John Beyrle together with his wife Jocelyn Green and the Center for psychological research will open today a Bulgarian-American cultural center in Sofia for people with disabilities. This is an extremely innovative and very positive project for popularization of the creative opportunities and the talent of people with certain specificities. The American experience in the field of integration of the people with disabilities will be applied in the center.It will be demonstrated how the human rights are a priority of every society and how discrimination is overcome through active action in the cultural field.

UniCredit Group: Bulgarian property market past peak

The Bulgarian property market scaled its peak in 2007 and is transitioning towards a more sustainable growth pattern in terms of both prices and number of transactions, UniCredit Group said in its latest overview of Bulgaria and the region. According to the banking group, some 15% of Bulgarian intend to buy a real estate property over the next decade. Demand is highest among the younger demographic and is driven by mortgage availability and expert Bulgarians. At the same time, the number of Bulgarians that can afford a new home remains limited. The acquisition costs per 1 sq m of housing space had doubled to 2.6 average monthly pays by the end of 2007. In an UniCredit Group poll, most of the potential home buyers said they will take out a mortgage loan. Intense competition between mortgage lenders has loosened the screening standards with the repayment period stretching out to 35 years. Some mortgage products on the market cover 100% of the market value of the transacted property. Mortgage loans added up to 2.9 bln euro by the end of 2007, accounting for 40% of household debt and 10% of the nation's GDP, said UniCredit Group. The Bulgarian property market remains stable on the backdrop of the global financial crisis, said the analysis of the banking group. There are indications for a softening on the holiday apartments segment where foreign buyers have been pulling back and the cost of borrowing has been on the rise. The stagnation of the segment was further compounded by planning mistakes in the development of some coastal areas. UniCredit Group forecasts that the demand/supply dynamics suggest a gradual moderation in property price growth over the next couple of years. However, credit growth and the leveling-off of real income will continue to point housing prices upwards. The number of housing units in Bulgaria stood at 3.729 mln in 2006 with 99% privately-owned. Over 80 of homes are old and of poor built. Some 40% of all homes have two rooms.

Bulgarian Currency

Are you wary of having your money changed in a foreign land? Are you visiting Bulgaria for the first time and needs some helpful advice on how to go about changing your money into Bulgarian currency? Read on to get some of these advices that you are looking for...

Turning your Foreign Money into Bulgarian Currency
The Bulgarian currency is the Lev or the Leva, when you say it in plural form. The “Lev” is actually the old Bulgarian term for lion. Bulgaria has a stable economy that largely depends on cash resulting in the value of its currency being tied to the Euro. As of the moment, 1 Bulgarian Lev is estimated to have an exchange rate of 0.6816 US dollars.

If you are a visitor to the country, it is best that you have your money changed in banks or in legitimate change bureaus. You have to know that there are change bureaus that will charge commissions on transactions concerning cash and traveler's checks that are either unclear in its posting or is posted in prints that are very fine. You have to be cautious about people on the streets, who will offer to change your foreign money into Bulgarian currency. Even if they do offer high exchange rates, most of them are out to swindle you into accepting useless bank notes and coins. These people are dubbed as confidence tricksters and they are exceptional when it comes to differentiating those who are just visiting their country from the real Bulgarians. You have to remember always that you must never accept worn out, old or dirty bank notes or bills that are scotch-taped to repair torn areas.

Where to Have Your Foreign Money Changed
If you are visiting Bulgaria for the first time, then it is highly expected that you will come into the country by the way of the airport. To be sure that you are not tricked when it comes to exchanging your foreign money into the Bulgarian currency Lev, have your money exchanged at the change bureau right at the Sofia Airport. There are also a number of legitimate change bureaus located in the store fronts in Bansko town that won't charge a commission when they change your dollars, for example, into Leva.

You can also have your money changed in banks. They operate on the usual banking hours of 9am to 4pm, from Mondays to Fridays, except on holidays. You have to remember though that banks, as well as other stores and change bureaus for that matter, will never change foreign currency that are very dirty, damaged or torn. Other offices that exchange currencies could be found in all the cities of Bulgaria, most of which are open until 5pm while some are open 24 hours a day.

Always keep it in mind to count and examine the Leva given to you in exchange for your foreign money. Make sure that the change bureau that you use in having your money changed, gave you the exact amount of cash as per the exchange rate.