Properties

Small Talk: No sign of property blues in booming Bulgaria
Last Updated: Monday, 7 July 2008

The Independent

Everybody knows that property prices in the UK are heading south and that the spectre of negative equity is once again raising its head. Not so in Bulgaria, apparently.

Last week, Bulgarian Property Developments was shouting from the Sredna Gora mountain tops after it managed to sell its logistics park in the Black Sea town of Varna for €15m (?11.9m), the valuation given to it by Colliers last Dec-ember. That is important, says its chief executive, Ivo Hesmondhalgh, not only because it helps bump up the group's cash position, but also because it goes some way to proving to investors that the group's net asset value is sound.

Mr Hesmondhalgh was so chuffed, in fact, that he has decided to buy more shares in the group, a lucrative move since last Tuesday when BPD announced a 19p dividend. The shares closed on Friday at 51.25p, and investors still have until 11 July to buy before the stock goes ex-dividend, effectively meaning that buyers can pick up shares for about 32p. Analysts say that the group trades at a significant discount and that the stock actually should be worth 56p given the net asset value. Moreover, if the group's application to increase density in its major site in Sofia gets approval, this figure will rise to 71p.

Mr Hesmondhalgh only managed to get three hours sleep last Thursday night, after a disturbance at Sofia airport, from where he was travelling to his home in Barcelona, caused his flight to be cancelled. He should sleep more easily on the night of 17 July after the group pays the dividend.

Source: By Alistair Dawber

BULGARIA TO REMOVE LIMITATIONS TO FOREIGNER PROPERTY PURCHASE
09:04 Fri 08 Dec 2006

The Parliament was considering a move from forbidding foreigners to own property in the country to some special regulations.

Changes feature in ownership regulations, discussed on first reading on December 7. Voting on the new laws would take place on December 8, Bulgarian National Radio reported.

Such changes were needed because of Bulgaria's upcoming EU entry. The country accepted EU requirements for the free movement of capital.

Foreigners will be allowed to purchase property in Bulgaria, following international contracts. This would guarantee the opening of Bulgaria's property market upon the country's EU entry, the national radio said.

Bulgaria is going to introduce a new term 'citizen of EU member state' to replace the term 'foreigner' used until present in ownership regulations, the report said.

The same regulations would apply to citizens of countries that are members of the European Economic Community and of Lichtenstein, Norway and Iceland.

Current regulations for the acquisition of a second home would remain valid for citizens of EU member countries, who reside permanently in Bulgaria, the report said.

Current regulations for the purchase of property by international organisations will remain unchanged.

Source: http://www.sofiaecho.com/

BUSINESS PARK SOFIA SALE FINALISED
09:08 Mon 04 Dec 2006

US investment company Gramercy purchased Business Park Sofia ahead of 55 other competitors, exclusive seller Colliers International Bulgaria said.

Gramercy paid 180 million euro to the former owner of the complex, Lindner, Dnevnik daily said. A Lindner representative said that the company planned to re-invest the sum in Bulgaria.

Colliers Southeastern Europe regional director Philip Bay said that the scale of the deal was a turning point in the development of Bulgaria’s investment market.

Gramercy acquired 13 buildings, constructed on nearly 90 000 sq m, Dnevnik said. Nine of the buildings were already constructed, the other four would be ready by the end of 2007.

Gramercy would invest 30 to 35 million euro in the construction of the four unfinished buildings.

Currently 62 000 sq m of the complex are being rented. The average rent per month is 10 to 12 euro a sq m.

Business Park Sofia was planned as ‘a city in the city,’Dnevnik said. It was built on more than 220 000 sq m. Commercial and corporate customers, such as Arena Cinema, and Technopolis, possessed the rest of the park.

Once the park was finished, it would consist of 35 buildings with 330 000 sq m constructed area. The offices of 400 companies will be housed in the complex.

Source: http://www.sofiaecho.com/

IMF EVALUATES BULGARIA'S ECONOMIC PERFORMANCE
09:05 Thu 26 Oct 2006

Prime Minister Sergei Stanishev meets IMF representatives.
A mission of the International Monetary Fund (IMF) visited Bulgaria from October 18 to 25 to evaluate the country’s economic performance and discuss possibilities in 2007.
Bulgaria’s economic performance is strong. The GDP growth rate is expected to reach six per cent as a result of the high investment in the country.
Inflation would decrease to 4.8 per cent by the end of the year, IMF representatives said as quoted by Bulgarian National Radio.
One of the problems that the country still has to deal with is the high current account deficit. It could reach up to 14 per cent of the GDP by the end of the year.
This increase would result from the strong dynamism in the private sector, which could become even higher because of the easy access to credits. These negative tendencies would remain similar in 2007, the national radio reported.
Bulgarian authorities carried out sound fiscal policies. The budget surplus in 2006 could reach up to 3.3 per cent of the GDP, IMF predicted. Officials should try to keep inflation under control and should attempt decreasing the high current account deficit.

Source:http://www.sofiaecho.com/

EU approves Bulgaria and Romania

The European Commission has announced that Romania and Bulgaria will be admitted to the EU in
January 2007, but under strict conditions.

The European Commission has given Bulgaria and Romania the green light to join the European Union in January.

The 26th and 27th members of the European club will be allowed to join up on January 1, 2007, President Jose Manuel Durao Barroso announced at an EU parliamentary plenary session in Strasbourg on Tuesday.

While the EU's executive arm decided that the two have made sufficient reforms to be allowed to enter the club, both still need to work harder to overcome corruption, organised crime, and ensure the proper use of EU funds and food safety. There could also be restrictions on migration to other EU countries for up to three years.

An EU official said the commission did not want to punish Bulgaria and Romania by putting the limits, but to make them work harder to carry out reforms. They are intended both as a reassurance for EU citizens, only half of whom support further enlargement, and as a warning to Turkey and the Balkan nations still lobbying for EU membership.

'Remarkable transformation'

The commission's report confirms that after seven years of talks, Bulgaria and Romania are able to take on the rights and obligations of EU membership.

Reading the report, Mr Barroso said the two nations' entry would be a "historic achievement".

"Bulgaria and Romania have carried out an extraordinary reform process and they have gone through a remarkable transformation," he said. Bulgaria's PM said the move was the fall of the Berlin Wall for his nation.

Romanian Prime Minister Calin Tariceanu said his people should be proud of themselves, but should not make the mistake of thinking that accession would mean all the country's problems would be solved.

The two countries missed out on the EU's big eastward expansion in 2004, which saw the EU grow to 25 member states.

Source: bbc.co.uk; afp.com, Published: 26th Sep 2006

The choice of Kosharitsa as a retirement haven has a good explanation. Most package tourists do not make it further than Sunny Beach, Bulgaria’s huge resort by the Black Sea. For those looking for a permanent foothold and respite from the crowds, however, Kosharitsa is pretty, unspoilt and just a few kilometres inland.
Yvonne and Stephen Kent, 52 and 50, pitched up in Bulgaria in 2003, having dismissed France, Italy and Spain as retirement choices. “They were too built-up and commercialised. Bulgaria was lovely, and, although there are a lot more people here now, we still think it’s great,” Yvonne said. The couple went house-hunting, and last year sold their three-bedroom bungalow in Rock, Cornwall, and moved to Kosharitsa, buying a newly built two-bedroom house with three bathrooms for a mere £34,000; it has a walled garden big enough for a pool and a barbecue terrace is to be built. Yvonne added, “If we'd been thinking of an investment, we chose the right time to buy, because the house is now probably worth three times as much; but we think of it as our home, and plan to stay here rather than take the profits. We're both learning Bulgarian, which must be one of the hardest languages. We can say ‘hello’, and ask simple questions.
“In this village alone, there are five retired British couples who live here full time, and a lot more who spend half the year here and half back in Britain. There is talk of forming an expats’ club, but we probably won’t bother. We want to mix with the Bulgarians, and become part of their community, rather than stay in an English set.”
The Kents’ decision to abandon Britain — even though they lived in what many Britons would regard as a perfect retirement spot on the Cornish coast — was driven by a liking for the Bulgarian way of life. They admire the family-centred style and the Bulgarians’ warmth and moral standards; but at first they found it strange adapting to cultural differences. “When you hear people speaking, they sound gruff, abrupt, and they do shout a lot, but then you find that it’s just their way, and they aren’t really arguing. If you ask for directions, they go out of their way to help, and couldn’t be kinder,” Yvonne explains. The couple now have Bulgarian friends who help them out in emergencies. “We paid our electricity bill twice by mistake, and didn’t have enough of the language to sort it out ourselves,” Yvonne says. Because rural parts of Bulgaria have, so far, not been invaded by coachloads of tourists, the couple still attract quite some attention when they visit remote villages.
A big attraction for Britons is the cost of living in Bulgaria. Yvonne's and Stephen’s monthly water bill is only £1.50, and electricity costs between £10 and £15 a month. A good bottle of wine costs £1, a beer 20p, and a slap-up meal for two, even in a tourist resort, less than £10. Groceries are also cheap — not to say free in the summer months, when Bulgarian neighbours with market gardens and orchards call to share their tomatoes, apples, pears and vegetables. All the Kents miss about Britain is bacon, friends and family. Their days are spent doing DIY — Stephen was a builder in Britain — and walking in the beautiful countryside, where a huge variety of birds can be spotted, and even, occasionally, wild boar. It is also rumoured that bears still exist in remote areas.
Mike and Margaret Mellor have also retired to Kosharitsa, in an attempt to stretch the small pension that Mike receives from British Steel, for which he worked as a joiner in Teesside. Rather than buy a ready-built house, they asked a Bulgarian who befriended them to put one up to their plans. Incredible though it may seem to those with a less trusting nature, their faith in their new friend was amply repaid, with a fine three-storey detached four-bed house, with a sun terrace on the first floor and a verandah upstairs. The deal, including central heating and a good finish — neither normally supplied as standard by Bulgarian builders — cost £60,000.
Mike said, “We could have stayed in England, but we would've had to penny-pinch. Here the same pension allows us to live very well. The people are friendly, and go out of their way to help. They invite you in for drinks, and arrive with trays of grapes, tomatoes and red wine after the harvest. If you’re not careful you can be tipsy by teatime every day. We were lucky with our builder, although you do hear horror stories of people building half a house, taking the money and running.”
Like their friends the Kents, the Mellors are learning Bulgarian and intend to stay for the long term. Margaret says that she has already picked her burial spot. To those who predict that most Bulgarian retirees will return to Britain sadder and wiser once old age sets in, Margaret replies that they have already encountered one emergency, and survived. When Mike went down with food poisoning, a consultation with a doctor was arranged quickly and easily. That and the cost of medication amounted to £3.50.
Amar Sodhi, from Avatar International estate agents and consultants, said, “Probably a thousand or so Britons are now buying in Bulgaria each year, but most are investors and holiday-home owners, rather than people planning to retire. The cost of living is very low. If Bulgaria joins the EU, prices will rise, but, if locals are still earning the same wages, it'll remain comparatively cheap.
“It's a better plan to retire to a city or village, rather than a resort, because at the end of October resorts become ghost towns. Prices are also cheaper in places where local people shop. In resorts there's sometimes two-tier pricing — for the locals and for tourists; Because rents are high, restaurants and bars have to do this. My tip to those thinking of retiring is to look to the new ski resorts, set in beautiful scenery, where it's a lot cooler in the summer months, but where there's something going on all year round.”