Industrial property yields in Bulgaria stood at 10% at the end of July and are expected to fall below this mark with the further development of the sector, a market overview shows.

"Only a few investment transactions have been recorded on the market to date involving relatively small distribution facilities. The yields for these deals are estimated at 10%,", says the market overview of leading real estate company Colliers International.

Experts point out that yield levels will be compressed as a result of more investment grade transactions, which are expected to take place with the further development of the sector.

The total inventory of contemporary owner occupied and speculative industrial space
in Sofia and the region around the city is estimated at 1,200,000 m2.

Rental rents for industrial space in Sofia remains stable and continues to range between EUR 3.5 - 5.5/m2/month for prime and secondary rents.

In Varna, the third-largest city in Bulgaria, the prime rental rates have decreased slightly because of Logistics Park Varna, which forms most of the prime supply and offers warehouse space at EUR 5/m2.

More than a third of the total inventory in Sofia is located in areas close to the international airport. Kazichene and Bozhurishte, located respectively just outside the eastern and western parts of the city, are the fastest developing new industrial zones.

The forecast is for new industrial developments to concentrate in the eastern part of the city (along the Ring Road between Trakiya and Hemus Highways all the way to the town of Elin Pelin) and the western part of the city (along European Transport Corridor 10).

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