Logistics areas: barely 2.5% are vacant
The situation on the industrial and logistics property market in Sofia is completely different.
Vacancy areas have reached a record low of 2.5%, and approximately 112,000 sq m are under construction. Last year, about 29,000 sq m were completed.
„Vacancy areas are at a record low of 2.5%. I don't think there is another market anywhere in Europe with such a low vacancy rate.“
One of the main reasons for the limited supply is the high cost of construction. The other serious problem is the shortage of suitable and sufficiently large plots of land.
„It is a function of many things, mainly it is very expensive to build, there are no land properties separately.“
According to him, the process of land consolidation, which allowed the creation of large industrial projects almost two decades ago, has not been repeated on the same scale.
„Well, unfortunately, since then — it has been almost 20 years — has not been consolidated for agricultural land, again with a more massive effect on our market, which ultimately leads to a shortage of land properties and higher prices.“
Among the projects with new phases and deliveries are CTPark, Industrial Park Sofia East and Business Park Sofia West.
Housing: after five years of shortage, supply is catching up
An important change is observed in the housing market. For five years, the number of housing starts has been greater than that of completions. In 2025, the trend reverses, with more of the previously launched projects reaching the market.
For 2026, there is still only data for the first half of the year, but Kirov expects the trend to continue.
„This reverses in 2025, and since we only have the first half of 2026, it is still unclear. My assumption is that 2026 will also have more deliveries, which is normal, since there is acceleration, there are projects that have been launched.“ According to the presented analysis, it is the accumulated deficit in previous years that is important in assessing whether current housing construction creates a risk of oversupply. „It is very clear that we have 5 years of shortage and respectively in 2025 we have a supply, most likely in 2026 as well. So, if someone is worried that we are super-strengthened and something terrible could happen to us, it is very clear that we have a few years of shortage.“ According to Colliers' analysis, the real volume of residential areas under construction in Sofia is around 2.6 million sq m. The estimate was made using NSI data for the last five years, subtracting the completed projects from the started ones. „We wanted to show this figure of 2.6 million, because figures are circulating in the media, the highest I have heard is 10 million square meters.“ Kirov points out that last year about 14,000 homes have been delivered, or approximately 1.5 million sq m of area. „So for us, 2.6 is much more realistic, which is not at all shocking, given that, as I mentioned, the new demand per year is 1,100,000 square meters, which is 10,000 housing units.“ Among the mentioned housing projects are Teatralna, Green Park Residence and Moreni. According to the analysis, long-term trends remain rather positive for the housing market. Among the factors are the growth of cities, low interest rates, accumulated savings, increasing incomes and the demand for a better living environment. An important factor is also the age of the housing stock. „Old buildings are a very big trend — only 24% of the buildings in Sofia are from the last 25 years, you can imagine what the rest is.“ The increase in housing prices is also gradually excluding some of the potential buyers from the property market and directing them to the rental segment. „And last but not least, when everything is getting more expensive little by little, of course, unfortunately, this pushes some of the buyers who cannot afford it, and they become tenants, which creates demand for a slightly different product.“ Among the short-term factors for the property market is the introduction of the euro. According to Colliers' analysis, its effect on demand is rather neutral. “The short-term ones are in the direction of the euro, which in our opinion is neutral in terms of effect. Some claim that it can further pull our economy, but for us, Bulgaria had already started to fully converge with Western Europe anyway, so this has no effect for us.“ A more significant short-term risk is inflationary pressure, including that coming through fuel prices and geopolitical uncertainty. The political environment may also temporarily postpone decisions to purchase a home and take out a mortgage by some households. Low unemployment and wage growth are currently supporting the market, but Kirov defines these factors as cyclical. The overall picture shows different dynamics in each segment. Offices are growing more cautiously, retail parks are approaching saturation, logistics areas remain scarce, and in housing, the increased supply is starting to compensate for the shortage accumulated in previous years. At the same time, none of the segments under consideration shows excessively large volumes of new supply. „In summary, the residential segment looks a little different, but we are not at all worried and we believe that these figures will lead us to the market doing well and this is a year in which there is a healthy cooling.“ This is also the main message for the market as a whole: „All segments have volumes that are not super high, they are stable and the vacant space is in a healthy level.“ Source: Georgi Kirov, Partner and Director of „Investment Advisory Services“, Colliers Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found at imot.bgHow much is actually being built in Sofia
Old buildings and low interest rates will maintain demand
The Euro – neutral, inflation remains a risk
2026 - a year of healthy cooling