Sergey Koinov, Executive Director of Forton International: Vitosha boulevard will regain its strength as a retail destination

- Mr. Koinov, is the market of office space in Bulgaria already oversupplied?
- In any case, there is more supply than demand and this affects the market. If we look at the statistics, we’ll see that the available office space is about 1.3 mln sq m. According to our data, the share of vacant office area is about 31%. This data shows that the quantity of free office space is indeed significant.

- At the beginning of the year you said that the pressure on rental levels of office space would continue ... Is such a trend prevailing and can we expect a further decrease of rents?
- The economic theory says that when supply increases and demand stays at a constant level,  lower than in previous years, there should be a pressure for changing prices downwards. However, general statistics do not represent the complete picture. Big tenants, i.e. large-scale international companies seeking to improve their office medium, are most often looking for Class A buildings, such as the four major office projects: Polygraphia Office Center, European Trade Center, Serdika Center and Megapark. No significant price changes are expected in this segment. Pressure on prices could be expected for projects in Class B and Class C because with the increase in available office space they will lose tenants and will have to find new ones, eventually for lower rents.

- Are the tenants of trade areas expected to redirect from malls to street shops?
- The crisis has affected quite seriously consumption and hence –  the performance of traders. Nevertheless, several large shopping centres were built in Sofia which was something the large trading companies needed. At the same time, traffic along the Vitosha boulevard – a major shopping street - was stopped and its reconstruction began. The pedestrian boulevard can no longer offer the comfort of a walk and the sales at the shops along it decreased. Added to the lack of big shops, sought by a number of international brands, the effect on the development of Vitosha boulevard is currently negative. But if we consider the global trends, I do not think there will be problems for the main shopping street in Sofia in the long run. Big retailers want to be present both in malls and on the streets. Therefore, sooner or later, the Vitosha boulevard will regain its strength as a retail destination.

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