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

Prices of New Homes in Hungary Projected to Rise About 7% in 2008

Hungarian real estate company Otthon Centrum projects the price of new homes in Hungary will increase about 7% in 2008, level with the rate of inflation, the Budapest Business Journal reports.Nonetheless, it still sees prices of both new and resale homes doubling in ten years, analyst Dávid Valkó said at a press conference on Wednesday.About 11,200 new homes will be completed in Budapest by year-end. Demand for resale homes is expected to fall 5%-10% during the year.Prices for resale homes in brick buildings averaged Ft 269,000 per square meter in the first half of the year. The price for free-standing resale homes was Ft 197,000 per square meter.The report noted that 10% of new home loans taken out in the first half were denominated in Japanese yen.Source: Profit.bg

Obtaining Loan For the Purchase of Prefab Panel Apartment Gets More Difficult

Bulgaria's mortgage loan market was on vacation in August after the steep growth recorded in July. The lending was also affected in the holiday month, including the volume of the loans extended and their average size. The trend was witnessed in all cities across the country and may be attributed to the holiday season and the vacations of the banking employees. A considerable amount of the loan applications were not processed and will be reviewed in the start of the active season in September. August is a traditionally weak month for the banking system, according to Tihomir Toshev, executive director of CreditCenter. The smaller number of inquiries does not come as a surprise as we expect this slowdown to be offset during the most active period for the purchasing of properties, which is the end of the calendar year. All the declines mentioned today are for the month of August, while July was quite active, which actually means that the market has retained its normal pace, Toshev added. The activity in August was aimed mainly in the field of consumer lending, where nearly 40% of the extended loans were intended for residential property repairs improvements. The interest rates on loans continued to go up in August. This trend does not affect the market anymore, as consumers with stable incomes have been the most active for the second month in a row. The good news for the market is that many customers are more cautious because of the global credit crisis, which reduces the risks for both parties. The type of properties bought with bank loans is indicative of this cautiousness. The share of pre-fabricated panel apartments declines at the expense of apartments in new brick buildings. A total of 74% of the loans in August were extended for the purchase brick apartments, 20% of the loans were extended for the purchase of prefab panel apartments and 6% for other type of properties. This comes as a result of the banking criteria (the repayment term of the loan combined with the age of the prefab panel apartment should not exceed 50 years) and the forecasts of real estate agencies that the prices of prefabricated panel apartments will go down at the expense of the newly built properties with good location. The average size of the loans extended in August stood at 47,351 euros. Mortgage loan repayment term – Aug 2008 Up to 10 years 4,08% 10 to 15 years 16,32% 16 to 20 years 28,57% 21 to 25 years 20,41% 26 to 30 years 20,41% Over 30 years 10,21% The share of the loans extended in Bulgarian currency went up to 21% in August but this is only temporarily, according to CreditCenter's experts. City Avg loan size in euros Ratio euros/leva % Sofia 68730 92/8 Varna 47952 73/37 Bourgas 44880 85/15 Plovdiv 43357 83/17 Stara Zagora 34500 85/15 Rousse 38555 53/47 Blagoevgrad 32600 81/19 Veliko Tarnovo 35500 76/24 Pleven 32100 75/15 Dobrich 41657 80/20 Kardjali 25385 90/10 Sliven 23122 75/25 Yambol 26290 46/54 Източник: 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.

A doubled number of ski routes threatens Vitosha

A new ski zone could be constructed on Vitosha Mountain, home to a nature park on the outskirts of Sofia, the coalition of non-governmental organisations To Sustain the Nature in Bulgaria (SNB) wrote in a media statement on August 26. On August 27, the Vitosha nature park office confirmed that in July, it had received an investment proposal for the new winter resort. The investment proposal contradicted the 10-year management plan for Vitosha nature park that was approved by the Cabinet in April 2004, the nature park’s spokesperson told The Sofia Echo. The as-of-yet-unnamed investor plans an expansion of the already existing ski zone on Vitosha Mountain by felling 20 ha of woods and urbanising more than 30 ha of high mountainous pastures. But according to the current management plan for Vitosha, any construction of new ski sites was banned, SNB said. A map that the coalition received in a plain envelope without a sender’s address showed that on a territory of four sq m were planned 29 ski routes, 17 lifts and a drag lift, which was an exceptionally high number, SNB said. Currently, Vitosha Mountain has 12km of ski pistes – but following construction, this number would be more than doubled, as the map showed an additional 13km. Eight km of the old ski slopes would be renovated, SNB said. The design of the new ski zone was done by the architectural firm Ivis Project and Design OOD, which also designed the Bansko ski zone in Pirin national park and the illegal ski zone Panichishte-Ezerata-Kaboul, planned for construction in Rila Mountain and Rila national park. Approached for comment by The Sofia Echo, Ivis OOD's spokesperson confirmed that the company had prepared the plan, but would not reveal who commissioned it. According to the company, it was not about a new ski zone, but only about expanding the existing winter sport facilities. “Simply developing a concept for ski zone is not a cheap pursuit,” SNB said. According to the coalition, it was disturbing that somebody was planning a ski zone in Vitosha nature park, where this action could be carried out only following legal procedures and only with serious political backing, and in violation with Bulgarian and the European environmental legislations, SNB said. by Elitsa Grancharova,

Energy Minister Backs Declaration on Re-starting of Kozloduy's Units 3, 4

Economy and Energy Minister Peter Dimitrov backed in principle Wednesday a declaration on reconsidering the decommissioning of units 3 and 4 of the Kozloduy Nuclear Powers Plant by nuclear experts. The document was discussed at an international nuclear forum held in Varna, BTA reported.The two reactors were closed in late 2009 in line with a commitment to this end undertaken by Bulgaria in the process of its EU accession talks.The declaration is addressed to the Council of Europe, the European Parliament, the European Commission, Bulgaria's President and Prime Minister. According to the experts, there are sufficient preconditions to re-consider the decision on the shutting down of the two reactors. In their view political will is needed so as to take such step. "If a decision to this end is taken the units may be re-started for several months so as to resolve the energy crisis in Southeastern Europe," the declaration says.Minister Dimitov told the participants in the forum that, currently, there is an upward trend in nuclear power engineering worldwide. The traditional energy sources are gradually being exhausted. Due to this fact and the need to protect the environment, interest in the N-plants is renewed again, Dimitrov noted. The Belene Nuclear Power Plant will have two 1,000-megawatt units as the first should be ready by 2013.The management of the Belene N-plant's waste is a key problem in the implementation of the project about the construction of the facility, said Nuclear Regulatory Agency Chairman Sergei Tsochev. The location of the waste site is to be set following a broad public discussion, Tsochev specified.The demand of the National Electric Company (NEK) for a markup of prices has been prompted by the producers' position, NEK CEO Lyubomir Velkov said. According to him, the State Energy and Water Regulatory Commission should comply with this demand so that the company would not sustain losses on the domestic market.The Varna Thermo-electric Power Plant does not fulfill its quota for the production of electricity for the domestic market, Velkov further said. If the company does not start meeting its commitments, it will be deprived from the right to export electricity.The new Energy Efficiency Bill will be drafted and moved to Parliament by September, Energy Efficiency Agency Chairman Tasko Ermenkov said. Under the Bill the producers should sell electricity at preferential prices to customers, having implemented energy efficiency projects.

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.

Public Tender for Reconstruction of Part of Burgas Airport

The concessioner of the Bulgarian airport “Burgas” announced a public tender for an implementor of the rehabilitation of line “A” and an air-strip for taking off and landing.“Fraport” anticipates the reconstruction to include line “A” with an area of 1500 sq. m as well as 100 sq. m of a air-strip serving airplanes' taking off and landing.The company, which will be selected for implementing the reconstruction, should finish it in three months – this is the period the German company gives for completing the work on the air-strip, informs BGNES.The guarantee for participation is 1000 EUR. According to the law this sum could be up to 1% of the tender's value. The applicants should present documents, proving their economic, financial and technical capabilities for implementing the task. Recommendations from previous clients for good work are also needed.

What are the costs of living in Bulgaria?

It's not possible to compare living costs in Bulgaria and Western Europe. Living costs in Bulgaria are extremely low! For example the food is generally twice cheaper than UK. House insurance: around €100-200 per year depending on the type of house, together with the belongings and furniture inside. For a property of price €30,000 insurance against theft, flood and fire costs about €125 per year with a decent insurance company like Allianz. Gas: the gas system network is not developed in Bulgaria yet. People here mostly use electricity to cook. For heating: there are central heating systems in the big cities: monthly costs for a 2-bedroom apartment around €120. In the small places people use charcoal and wood, which is even cheaper way to heat a house. For electricity, when used for cooking, light or hot water one pays about €30 monthly. Local and national taxes for owning a property: depending on the place where the property is located, the most expensive area is the capital Sofia, where the annual taxes of 2 bedroom apartment are around €150 per year, but the rest of the country is around €80 per year