Sofia City Report H2 2021

The activity on the Bulgarian real estate market was strongly influenced by the COVID-19 crisis, registering the lowest levels since 2011. 2022 is expected to be the first year of recovery, with more consistent transactions in property acquisitions.

Investment volumes during the second half of 2021 reached €221mil. For the whole of 2021, investment volumes totaled €240mil., 11% over 2020. There were signs of recovery and a tendency for new acquisitions on the real estate market.
During the observed period, the largest office transaction in 3 years was concluded in Sofia. Software company SAP has acquired the newly built Park Lane Office. The value of the transaction is €50 mil.

Total office leasing volume for H222021 reached 2021 reached slightly above slightly above 85,000 m², 85,000 m², which represents an which represents an increase of 22% compared to H1 2021. The increase of 22% compared to H1 2021. The market continues to be dominated by renewals market continues to be dominated by renewals and relocations from older buildings to newer and relocations from older buildings to newer and higher--quality projects. projects.
The total leased space volume for 2021 was close to 155,000 m². This level is 44% over 2020 and close to the last 5-year average.
The current modern stock in Sofia reached 2.5 million m² at the end of 2021, out of which 73% are considered class A.

H2 2021 registered moderate activity in terms of new stores, with roughly 5,000 m² opening in existing shopping centers in Sofia. In comparison, in H1 2021 there were 8,500 m² opened in new stores.
During the second half of 2021 the most active tenants remain those from the FMCG, sporting goods, drugstores and discount chains. Some brands rely on new formats and locations.
The Polish discount chain Pepco was the most active in its expansion during 2021 overall and in H2. They opened the 100thstore in Bulgaria, aiming to reach up to 200 stores by the end of 2022.

During H2 2021, the industrial and logistics real estate sector in Bulgaria continued to perform very well. Gross take--up in H2 2021 reached almost up in H2 2021 reached almost 53,600 m², 53,600 m², with about 37,500 m² 37,500 m² net take-up.

The total supply of modern logistics and industrial space in H2 2021 totaled industrial space in H2 2021 totaled 231,000 231,000 m², m², the highest level in the last 10 years. The highest level in the last 10 years