Profit.bg talked to Atanas Garov, managing director of Colliers International, about the condition of the real estate market in Bulgaria, its short-term development prospects and whether the supply has shifted towards another group of clients, different from the ones from the western countries: Mr. Garov has the slowdown of the economy in Western Europe affected the real estate market in Bulgaria? The slowdown affected the domestic real estate market a long time ago but not all its segments. There was a price correction in some of the segments before the slowdown in Europe. For example the holiday properties market. A lot of segments of the market, such as the letting of commercial centers, the office space markets and logistics properties are developing well provided the present market conditions. One could say that the market niches where the deals are sealed between an entrepreneur and the end client have not been disrupted by the crisis (with the exception of holiday properties). The only market niche that was affected directly by the global trend is the investment market. There is a slowdown in the number of deals and a price correction at present. After all, this is a market that depends directly on the external factors for the country. On the other hand market segments, such as commercial space, offices and logistics and to a certain extent residential properties, which rely on domestic demand, have only been slightly affected by the recession. Have foreigners started selling properties in Bulgaria already? Colliers does not specialize in the sales of holiday properties (where foreigners own most properties) and unfortunately we cannot comment on this issue. What are the optimistic, realistic and pessimistic prospects before the real estate market provided the recession concerns in the leading euro area countries? Optimistic: The interest rates in the euro area drop to their levels prior to the crisis in the next quarter. The volume of deals sealed on the investment market rise considerably, which prompts more sales to end clients. Pessimistic: Interest rates retain their current levels in the long term. Similarly to the dotcom boom the interest and the clients shift to other sectors, such as alternative energy production and agriculture. Are there companies in the sector that have shifted to another group of buyers, different from the ones from Western Europe? This issue may be discussed from the standpoint of holiday properties and investment properties. There is a shift on both segments, however. Russian buyers are showing interest in holiday properties. No clear shift may be outlined on the investment properties market yet due to the decline in the volumes but Middle Easter companies have been showing interested in Bulgaria and Southeast Europe recently.Source: http://profit.bg/index.php?cid=4&sid=0&aid=4470&sec_name=LATEST
Tuesday, September 16, 2008
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.
