Tenants hold the winning card

The Bulgarian Telecommunications Company has rented 20,000 sq m of space at EUR 14.5 per sq m as stated in a 20-year contract with the European retail center on Tsarigradsko Shose Blvd. in Sofia. The deal has broken two records in the office segment at once - in terms of size and term of contract. We can hardly expect a similar deal soon.
Faced with insecurity, the business is cutting down expenses, starting with the staff and office space. However, investors will hardly stop the construction of buildings which have to be completed by the end of the year because they have to attend to loans. This might raise available office space in the largest market - Sofia. In Q2, it is highly likely that this rise will become a double-digit percentage of available administrative units. According to Colliers International, available offices went up to 9.1% in the end of 2008, or 80,000 sq m.  
The comfort of property owners in the past two years and a half is vanishing. This became obvious in the end of 2008 when rents started to fall down and sales froze. Tenants tend to be more demanding -they want lower rents and free parking spaces. Brokers say deals are driven from the desire for a greater efficiency when using spaces - uniting offices or reducing common expenses for rents. New builds where with proper layouts and old builds with low rents to compensate for lower quality are both advantageous.  
Investors in developing regional markets will find it harder to attract clients from now on. Colliers International’s officials presume available space in Varna has soared to 17% compared to previously registered 6.1%. The difference equals to 18,000 sq m.  
So far both rents and asking prices are in a dead-end road.