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Bulgarian property sector.
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The popularity of Bulgarian real estate as an investment class is well known; more and more overseas buyers are purchasing residential properties along Bulgaria’s Black Sea coast, in the country’s many ski resorts or in the popular capital of Sofia for capital growth and strong rental yields. These property investors are attracted by the incredibly affordable prices and by the potential long term profitability of investments made in Bulgaria.
The Bulgarian government have been quick to appreciate the potential of all this overseas direct investment flowing into the country’s real estate sector and decided to allow for the creation of real estate investment trusts (REITs) to broaden investment spread and to strengthen the property sector for the long term.
Because overseas property investor interest in Bulgarian real estate has been so heavily focused on residential real estate as previously mentioned, the scope for REITs is now very broad because demand for commercial, retail and industrial space in Bulgaria is increasing yet few have capitalized on this increase in demand.
Investment into these three sectors has been limited to date therefore the new REITs are rushing to capitalize on these under-exploited market shares. Most REITs in Bulgaria have a broad portfolio spread as a result, and retain everything from agricultural land to industrial parks.
The ongoing popularity of real estate investment trusts in Bulgaria is fairly well assured because the country’s entire property market is continuing to emerge, Bulgaria is on track for EU accession and the general consensus of expert opinion is that Bulgaria will continue to prosper. Furthermore, because of the security of a REITs’ underlying assets, i.e., real estate, these investment vehicles are considered to be intrinsically low risk which further adds to their universal and growing appeal.