The total volume of investments in Bulgaria in this sector reaches EUR 380 million in the first half of the year.

Investments in commercial real estate in Bulgaria in the first six months of 2018 total more than € 380 million, including land transactions.

There is a serious decline in the interest of foreign investors in the commercial real estate market in Bulgaria since the beginning of 2018 because of the high prices of the offered assets and the lack of quality large-scale projects that meet the demand of potential buyers.

Although the market is showing relatively high activity over previous years, most deals are the result of negotiations starting in 2017, and the weak investor interest in recent months will have a bearing on future periods.

The growth of the investment market that we witnessed in 2017 significantly increased the expectations of Bulgarian sellers and led to a rise in prices. However, the increase is not justified by increased demand, but is due to too optimistic expectations for the market.

The unprecedented volume of deals for the Bulgarian market of over EUR 1 billion in 2017 is unlikely to recur in the near future. Last year, South Africa's funds, which last year actively entered Bulgaria, were the main engine. Alongside this, western European investors are withdrawing from the market.

For these capital, Bulgaria is hardly competing with other Eastern European markets that offer a better ratio between the cost of attracted resources and yields. Examples include Romania and Hungary, as well as secondary cities in Poland, which have come to the forefront of property investors for the past year.

Compared to Bulgaria, these markets offer lower yields, but with better interest rates and lower risk, respectively.

In a few cases finalizing a transaction may take more than six months. The volume of the market since the beginning of the year should not be misleading for high activity, but should be taken as an inertia from 2017.