The supply of industrial and logistics areas for speculative leasing in Sofia class A and B by the end of 2024 is about 1,401,400 sq m. m. A minimal increase of 25,400 sq m. m was registered compared to the end of the previous year. The main reasons are the high cost of construction, as well as the fact that local companies prefer to build their own building stock. Modern areas under active construction in Sofia are almost 185,400 sq m, with nearly 40% of them concentrated in several buildings from one project, according to a study by the consulting company Colliers.
Demand in the past year increased compared to the previous year 2023. Its main driver has traditionally been companies in the field of logistics and 3PL (39%), followed by manufacturing (36%) and trade (9%). The remaining share is distributed between representatives of the construction, chemical industry and pharmaceutical sectors.
The occupied areas in 2024 exceed 105,400 sq m. More than half of this volume (58%) represents new demand or expansion, 24% are buildings built for a specific tenant (built-to-suit), 11% are sublet, and renegotiations or extensions of existing contracts are 7%. By the end of 2024, the share of vacant areas in Sofia reaches record low values of around 2.3%.
The rental levels at which the properties are offered remain unchanged at an average of EUR 5.50 per sq m. per month for class A warehouses and around EUR 4.0 for class B. As a result of their high values, the trend of searching for lower-class areas at a more acceptable price is expected to continue. Many of them are in the inner ring of Sofia and are more suitable for demolition and subsequent new construction. This is also the main reason why the trend of local traders to vacate their rented areas and reorient themselves to warehouses in Romania, due to more favorable rental conditions, will continue in the current 2025.
The stabilization of construction prices stimulates investors in making decisions to launch new projects. This trend is expected to continue and more buildings will move from the planning stage to construction. The potential increase in supply in combination with our country's full membership in Schengen will provide an additional stimulus to the Bulgarian economy as a whole and the logistics segment in particular.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be seen HERE