Sofia Office Space Vacancy Rate Flattish in Q2, Completed Projects Fall 63% in H1 – Real Estate Consultancy

 The volume of completed office schemes in Sofia declined by nearly 63% on the year in the first half of 2013 while the overall vacancy rate posted a consecutive quarterly decline by 55 basis points to 31.02% in the three months through June, a Sofia-based commercial property advisory said.

The slowdown of development combined with take-up from owner-occupiers was the main reason for the contraction in the vacancy rate, Forton saidin a report.

In the April-June period, completion volumes in Sofia totalled a meager 10,000 square meters (sq m) of office space - against total inventories estimated at 1.65 million sq m, and were down 47% compared to the previous quarter and 58% lower over the same period a year earlier.The little progress seen in individual projects in the capital city suggests that at least some of the major developments expected in 2014 may be postponed and given that these projects are sizable, the dearth of completions is set to continue, the report said.

The April-June take-up of office space in Sofia was 61.5% down compared to the previous quarter at 14,100 sq m with the high base set in the first three month of the year as the main reason for the sharp drop. The total absorption volume in the first half of the year was virtually on par with the same period of 2012, trailing by just 4.7%.

Prime office rents in Sofia remained unchanged in the April-June period and noted that after several consecutive quarters of leasing progress landlords in the class A segment of the market are not pressured to offer incentives. Supply and availability are low in the Central Business District, leaving prime rents unaffected by developments in the broad center and the suburbs.