Prime Rents: Slightly down to 3.8 euro/sq.m for larger units, stable
at 4.2-4.4 euro/sqm for mid-size properties
Prime Yields: Stable at 8.5% after the slight decrease at the
beginning of 2019
Supply: Modern stock of 1,159,600 sqm as of mid-2019,
Demand: Logistics and retail sectors are the main drivers of
the leasing market
Prime Industrial Rents – March 2019
LOGISTICS LOCATION € € US$ GROWTH %
SQ.M SQ.M SQ.FT 1YR 5YR
MTH YR YR CAGR
Sofia 3.80 45.6 5.12 -5.0 1.7
Prime Industrial Yields – March 2019
LOGISTICS LOCATION CURRENT LAST LAST 10 YEAR
(FIGURES ARE NET, %) Q Q Y HIGH LOW
Sofia 8.50 8.50 8.75 13.00 8.50
With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in
any transaction, such as financing, these are very much a guide only to indicate the approximate trend and
direction of prime initial yield levels and should not be used as a comparable for any particular property or
transaction without regard to the specifics of the property.
The second quarter of 2019 was historically one of the strongest
for the industrial property market in Sofia in terms of leasing and
development activity. The improving performance is
underpinned by the stable growth of the retail, ecommerce and
logistics. An investment market is taking shape following the
gradual increase of the modern logistics and production stock.
The first phase of the logistics center of Denmark’s furniture
chain JYSK was the biggest completion in Sofia in the first half
of 2019. The new facility is located in the state-run Industrial
Zone Bozhurishte and will comprise 90,000 sqm TBA at the final
stage. It should serve more than 270 stores in the SEE region.
The extension of the production facility of Behr-Hella
Thermocontrol in Bozhurishte, and data centers of Equinix and
DSK Bank were among the notable completions in the period.
Overall, the second quarter registered about 72,500 sqm new
deliveries in Sofia and another 202,000 sqm under construction.
This stock increase is unprecedent for the last five years and is
comparable only to the previous market peak. The impressive
share of speculative projects in the pipeline is also worth to be
mentioned. The space available for rent accounts for 45% of the
total volume. That includes both subsequent phases of large
well performing schemes, as well as entirely new logistics and
Development coupled with increasing corporate investments
resulted in higher occupier activity with 45,300 sqm leased
space in the first half of 2019. The market is dominated by
expansions and preleases, since the majority of the new
facilities are contracted during the construction phase.
Increasing supply of modern logistics space coupled with stable
rents and low vacancy rate draw investors’ attention to Sofia
industrial property market. Prime yields stood at 8.5% in Q2,
projected to remain unchanged in a short term.
After several years of shortage of modern space, the increasing
supply is expected to rebalance the industrial property market
in Sofia. Rents and vacancy keep healthy levels.