Property owners go back to reality

At first glance the rents of retail properties in big cities remain stable. But for the first time in years we can now see that many offers on high streets in the cities of Sofia, Varna, Plovdiv and Burgas. This is a clear sign that vacant units are rising in a number of buildings. Rising supply is driving rents back to more stable levels no matter if the units are located in the city center of the capital or in shopping malls around the country.
With the exception of Vitosha Blvd., the most expensive offer in Sofia can be found on Lege St. – 27 sq m cost  € 2,700 per sq m per month. This is 20% less than the value of similar units on Saborna St. three months ago.
On Aleksandrovska St, one of the two high streets in the city of Burgas, the rent of a 47-sq m unit is estimated at € 65 per sq m per month, although some months ago the most expensive rents used to reach € 80 per sq m and there was hardly any supply. Now a 70-sq m shop can be rented for € 50 per sq m.
Same prices can be seen along the main high street in Plovdiv.
Rents in Varna, too, are seemingly stable with maximum levels reaching €110-120 per sq m, but referring to extremely small units of 28 or 20 sq m. However, a 40-sq m shop with central location is let for € 75 per sq m.
In the capital prices along the streets of Bulgaria, Rakovski and Patriarh Evtimiy do not exceed € 50 per sq m per month. In Varna the three shopping centers which are currently let feature rental levels of €30 - 45 per sq m per month. To draw a comparison, a year and a half ago when the first mall opened, these rents used to vary between € 30 and 60.
Real estate agents in Sofia say rents have remained stable, but developers outside the capital tend to offer more incentives like rent-free periods, lower rents or free-of-charge additional works. In cities like Stara Zagora retailers should be able to pay approximately € 30 per sq m. 
Taking this into account, it should be no surprise that asking prices are still maintaining their levels. If we compare the most expensive rent to the most expensive asking price, yields in Sofia’s city center according to Forton International’s real estate agents have dropped down by 6.75% which indicates a trend towards declining rents. Some vendors need more time so that they can adapt to the new reality. Some of them will react faster than others. The price of a shop in Varna’s city center dropped down from €15,000 to €11,000 per sq m.