The office market in Sofia remains supply-driven. The existing office inventory is almost fully occupied and the new supply seems insufficient to meet the current market needs. Vacant space declined during the past six months, accounting to less than 4 per cent (or 26 000 sq m) of the total office supply.

In the second half of 2007 the growth of office supply in Sofia continued its upward trend of recent years and registered 16 per cent growth compared to the middle of the year, adding about 98 000 sq m of office space, according to the latest Colliers Bulgaria research, the H1 2008 Office Market Overview.

Currently, the total inventory of multi-tenant and speculative Class A and B office space in the capital stands at 704 600 sq m. By the end of 2007 the existing stock of Class A offices in Sofia reached 369 600 sq m. New supply in the second half of 2007 was mostly driven by suburban development, delivering 66 per cent (or 64 000 sq m) of the total new office space.

The office market in Sofia remains supply-driven. The existing office inventory is almost fully occupied and the new supply seems insufficient to meet the current market needs. Vacant space declined during the past six months, accounting to less than 4 per cent (or 26 000 sq m) of the total office supply.

Net absorption was 161 000 sq m in 2007, exceeding expectations and up from 101 500 sq m in 2006 - 58 per cent growth. Rent levels continued to grow in the second half of 2007. The increase was most notable for Class A properties for which asking rents went up in all submarkets, reaching an average level of over 15 euro a sq m a month. In the CBD, rents kept the trend from the past years, growing at a rather slow but steady pace, and averaging 17 sq m a for available office space. The highest annual increase in asking rents for class A was in the Broad Center - 22 per cent.

Currently, average returns on office areas stand at 7.2-7.5 per cent.