‘New frontier’ Bulgaria Attracts Real Estate Investors

Business » INDUSTRY | October 19, 2017, Thursday // 16:43
Bulgaria: ‘New frontier’ Bulgaria Attracts Real Estate Investors archive

Bulgaria is a new frontier for real estate investors, with many South African companies already having invested in Poland, the largest economy in eastern Europe.

UK-based Hystead, which is co-owned by JSE-listed shopping centre owner Hyprop and PDI Investment, bought a highly rated mall in Bulgaria’s capital, Sofia, in July for €156m.

This was Hystead’s fourth southeastern European acquisition, growing its portfolio to a gross asset value of €460m. Hyprop CEO Pieter Prinsloo said it would soon list its eastern European assets separately.

Nepi Rockcastle, the largest listed property group on the JSE, has also invested in Bulgaria. One of the group’s co-CEOs, Spiro Noussis, said it aimed to have a continued presence in the major economies of eastern and central Europe.

Peter Clark of Investec Asset Management said many of these east European markets were still relatively small compared with listed property markets in western European countries. "South African investors have not yet experienced a bear market in eastern Europe. The size of markets, such as Sofia, can make them extremely illiquid when the cycle turns, so investments have to be viewed with a very long-term mind-set."

Evan Robins, portfolio manager at Old Mutual Investment Group’s MacroSolutions, said that Bulgaria had investment credentials, but it was a small market.

"The investment-grade market in some sectors is very small in Bulgaria, but there is a good story," he said. Investors should invest in certain high-quality investments in each east European market instead of zeroing in on one or two markets.

"My main question is why aren’t more western European investors there already. I think part of it is that they are concerned that exiting assets in smaller east European countries can be difficult," he said.


Source: www.businesslive.co.za 

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