THE OFFICE MARKET IN SOFIA SHOWS A GOOD FIRST QUARTER WITH ALMOST 42,000 SQM RENTED AREAS

With nearly 42,000 sqm of leased office space in the first quarter of 2023, the comemrcial real estate market in Sofia recorded rental activity exceeding the 5-year average for this period of the year, according to the latest report from the commercial property consultant Cushman & Wakefield Forton.

The share of vacant office space in the capital remained stable around the levels of last year and amounted to 16.1%. This is partly due to the limited supply and low take-up of vacant space. The space under construction in Sofia remain below 200,000 sqm and the deadlines for commissioning many projects are extended due to limited market realization.

“During the first quarter of the year, we observed a stable performance of the office market in Sofia, but renewals and relocations still form the predominant part of the rental activity”, commented Yavor Kostov, Managing Partner at Cushman & Wakefield Forton. According to him, the transactions in the first quarter of the year mainly reflect the desire of tenants to consolidate areas or move to newer or higher class office buildings.

According to the consultants from Cushman & Wakefield Forton, the commercial real estate market in Sofia is moving at two speeds, with the projects in the prime segment performing distinctly better in terms of occupancy and rental levels compared to the rest of the market. The hybrid work model is permanently imposed and breaks the connection between business growth and the rentings of new premises, especially for the companies in the IT and BPO segment. However, there are still tenants who are expanding and this maintains a good level of demand for office space.