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As I haven’t stepped onto Bulgaria’s soil to look and maybe even understand how is it looking, there are tonnes of available resources on the internet on how the outlook is looking and will it be viable for our real estate development project.

Most facts summarized from Wikipedia. These are the factors we should be taking into consideration should we be investing in the country.

Location:

Republic of Bulgaria lies in the southeastern Europe, with Romania to the north, Serbia to the west and Greece and Turkey to the south.

Economy:

A member of the European Union since 2007, Bulgaria has a rapidly growing, technhologically developed economy. The country boasts the second highest standard of living in Southeastern Europe in terms of GDP per capita. Inflation is well under control; unemployment stands lower than the average for the European Union and is steadily declining. Due to this positive economic profile, Bulgaria is expected to join the Eurozone in 2011, after having spent 3 years in ERM II, the entry for which is currently scheduled for early 2008. In comparison, the majority of EU member states, which are currently struggling with the Eurozone criteria, are expected to join the single currency union later than 2011.

Transport:

Bulgaria occupies a unique and strategically important geographic location. Since ancient times, the country has served as a major crossroad between Europe, Asia and Africa. Five of the ten Trans-European corridors run through its territory. The total length of the roads is 102,016 km of which 93,855 km are paved and 416 km are motorways. Several motorways are planned, under construction or partially built: Trakiya motorway, Hemus motorway, Cherno More motorway, Struma motorway, Maritza motorway and Lyulin motorway. Other motorways are planned but their final track is yet to be decided. They include a link between the capital Sofia and Vidin, a link between the Struma and Trakiya motorways south of Rila Mountain, a link between Rousse and Veliko Tarnovo, and the Sofia ringroad. Many roads have been recently reconstructed. The length of railways is 6,500 km of which more than 60% are electrified. There is a €360,000,000 project for the modernization and electrification of the Plovdiv-Kapitan Andreevo railway.

Air transportation has developed relatively comprehensively (Very important for tourism). There are formally six international airports at Sofia, Burgas, Varna, Plovdiv, Rousse and Gorna Oryahovitsa. Massive investment plans exist for the first three. There are important domestic airports in Vidin, Pleven, Silistra, Targovishte, Stara Zagora, Kardzhali, Haskovo and Sliven. After the fall of communism in 1989, most of them are not used as the importance of domestic flights declined. There are many military airports and agricultural airfields. 128 of the 213 airports in Bulgaria are paved. The ports of Varna and Burgas are by far the most important and have the largest turnover. Other than Burgas, Sozopol, Nesebar and Pomorie are big fishing ports. The largest ports on the Danube River are Rousse and Lom which serves the capital. There is well organised public transport in the cities and in many smaller towns. There are buses, trolleys (in about 20 cities) and trams (in Sofia). The Sofia Metro in the capital is to have three lines with total length of about 48 km and 52 stations, but only a section is currently completed.

Demographics

According to the 2001 census,[28] Bulgaria’s population consists mainly of ethnic Bulgarian (83.9%), with two sizable minorities, Turks (9.4%) and Roma (4.7%). Of the remaining 2.0%, 0.9% comprises some 40 smaller minorities, the most numerous of which are the Russians, Armenians, Vlachs, Jews, Crimean Tatars, ethnic Macedonians and Karakachans. 1.1% of the population did not declare their ethnicity in the latest census in 2001.

84.8% of the population speak Bulgarian as their mother-tongue. Bulgarian, a member of the Slavic language group, remains the only official language, but other languages (such as Turkish and Romany) are spoken corresponding closely to ethnic breakdown.

The country’s Roma population is estimated at between 400,000 and 800,000.[2]

Most Bulgarians (82.6%) belong, at least nominally, to the Bulgarian Orthodox Church, the national Eastern Orthodox church. Other religious denominations include Islam (12.2%), various Protestant denominations (0.8%), Roman Catholicism (0.5%), with other denominations, atheists and undeclared numbering ca. 4.1%.

In the recent years Bulgaria has had one of the slowest population growth-rates in the world. Growth has been negative since the early 1990s,[29] due to the economic collapse and high emigration. In 1988 the population was 8,859,000 people, and in 2001 7,950,000. Now Bulgaria suffers a heavy demographic crisis [citation needed].Bulgaria’s fertility rate is currently 1.4 child per woman as of 2007 and is going to reach 1.7 by the end of 2050.Replacements revel fertility rate is needed to reach 2.2 to continue the natural increase in the nation. (Simply showing signs of a developing country, where locals tend to look more seriously on personal financial situation before having babies)

Culture

Bulgaria is well-known for its rich folklore, distinctive traditional music, rituals and tales (Strong plus point for tourism), but the country’s contribution to humanity also continued in the nineteenth and twentieth century, when individuals such as John Atanasoff - born in USA with Bulgarian origin, regarded as the father of the digital computer, a number of noted opera singers (Nicolai Ghiaurov, Boris Christoff, Raina Kabaivanska, Ghena Dimitrova), Anna Veleva, and successful artists (Christo Javacheff, Pascin, Vladimir Dimitrov) popularized the culture of Bulgaria abroad.

Tourism

In winter, Samokov, Borovets, Bansko and Pamporovo become well-attended ski-resorts. There are summer resorts on the Black Sea at Sozopol, Nessebur, Golden Sands, Sunny Beach, Sveti Vlas, Albena, Saints Constantine and Helena and many others. Spa resorts such as Bankya, Hisarya, Sandanski, Velingrad, Varshets and many others are popular all over the year. Bulgaria is becoming an attractive destination because of the quality of the resorts and prices below those found in Western Europe.

Bulgaria has enjoyed a substantial growth in income from international tourism over the past decade. Beach resorts are popular with tourists from Germany, Russia, Scandinavia, the Netherlands and the United Kingdom. The ski resorts are a favourite destination for British and Irish tourists.

Bulgaria now attracts close to 5 million visitors yearly (One of the most important factor here)[citation needed] Tourism in Bulgaria makes a major contribution towards Bulgaria’s annual economic growth of 6%-6.5%.

Another source is from Oxford Business Group, which highlights Bulgaria’s aging population problem, as well as most of the views on economy, tourism and future. This is an excellent read.

Economy

Bulgaria’s economy is in good shape – 2006 marked the ninth successive year of growth since the 1996-1997 financial crash. Consumption and GDP are growing; investment, both foreign and overseas, is breaking records, thanks, in part, to EU accession; unemployment levels, though still high in relative terms, are falling; and imports and exports are continuing to increase at a robust rate. The industrial sector, which includes construction, was lauded as one of the main factors behind this success story, with annual growth of 8.3% in 2005 and 2006, while tourism is another soaring sector. Challenges remain though – inflation is still high, 6.5% year on year at the end of 2006, and the current account deficit stood at a record 3.88bn euros in 2006, representing around 16% of GDP, up from 2.43bn euros in 2005. To the future, Bulgaria’s policymakers will have to negotiate the balance between caution and growth. Meanwhile there is debate over when Bulgaria will join the Eurozone – estimates differ between 2010 and 2012. The chapter includes interviews with Rumen Ovcharov, former Minister of Economy and Energy; Stoyan Stalev, President, Invest Bulgaria Agency; and Michael Deppler, Director, European Department, IMF.

BANKING is also an important factor here when we’re considering them for investment.

The Bulgarian banking market is coming of age, as the country’s banks, predominantly owned by foreign players, mature and almost 100% banking penetration is reached. Although this will lead to deceleration, the injection of EU funds to various sectors will require co-financing from banks, keeping the sector in rude health. Meanwhile the Bulgarian National Bank (BNB) has lifted nearly all of its credit growth restrictions, meaning the sector now operates under pure market forces. The country’s 32 banks enjoyed total assets of 21.5bn euros at the end of 2006, double the figure from just three years earlier. And while the majority are in foreign hands following the programme of privatisations over the past few years, the few remaining domestics are fighting fit. Take, for example, Bulgarian First Investment Bank, the country’s fifth largest by assets, which raised 90.6m euros in May 2007 through an initial public offering, which was six times oversubscribed. To the future, retail banking looks set to remain the main driver of growth, with mortgage finance and leasing also blossoming. Thanks to the EU, small business and corporate clients should enjoy more favourable financing terms. Meanwhile by the end of 2008 Bulgarian banks are set to comply with Basel II regulations. Nearly all of the larger banks are close to compliance, but smaller banks will need to up their capital or could be forced to seek mergers with larger banks. Ivan Iskrov, Governor, Bulgarian National Bank provides a viewpoint.

CONSTRUCTION AND REAL ESTATE

Although Bulgaria’s construction sector is thriving, the pace of growth in the industry, which has seen rapid expansion over the past decade, is slowing, due to rising materials and labour costs squeezing margins across the board. In response to this, some developers are looking to high-end developments, rather than adopting the traditionally more typical, erecting four walls and a roof and waiting for the money to pour in approach. Indeed, analysts predict that projects like Residential Park Sofia, a suburban development of kept grounds, on-site security and recreational facilities, are the way forward and that constructors are going to have to woo buyers with extras. The number of foreigners purchasing property in Bulgaria – a robust market, accounting for 29% of real estate sales in 2006 – is also expected to slow (Something we do have to factor in when it comes to sales of the projects)

To continue attracting overseas buyers, developers are looking towards the country’s mountainous regions. In terms of retail development, shops- and consumers- are moving out of the city centres and into suburban malls. It’s not all doom and gloom for the downtown areas though, as space there is still attractive to high-end retailers. Indeed, even with the advent of the Mall of Sofia, there is not enough room on Sofia’s main shopping street, Vitosha Boulevard, for all the big name retailers hoping to grab space there. Some office space is also moving out to the suburbs, as the city centre becomes over-subscribed and Business Park Sofia, on the outskirts of the city, has attracted companies such as Ericsson. Perhaps the best news for constructors though comes in the shape of 2.2bn euros in EU funds pledged to improve the country’s road transport system. Another promising segment is Bulgaria’s developing logistics infrastructure – for example, a huge logistics centre is being constructed outside Varna, near the Black Sea (This is the area we are looking at for the projects)

And How do Overseas investors look at Bulgaria’s Estate Future?

This is quoted from Property.bg, which is a realtor site from Bulgaria and might be bias, nevertheless a good read.

Almost 40% of potential overseas investors would invest in emerging markets, followed by beach destinations (19%) and existing markets (15%) according to a poll by The Homebuyer Show.

This indicates that people want to make the most from their money by investing in areas that provide long-term growth and high capital gains, such as the Eastern European countries of Bulgaria and Slovakia.

In fact, over 25% of the people polled are buying a property overseas for long-term capital gains, with the intention of using it as a holiday home coming in second (21%) and short-term holiday lets third (20%).

The poll also revealed that over 50% of people believed that if an area is a budget airline destination, this increases its appeal and investment potential.

Other catalysts for an area’s investment potential are if it is a member of the EU (22.41%), if there are new facilities (10.34%), and if there is an international event, for example the Athens Olympics, (5.17%) or extensive media coverage (5.17%)

Nick Clark, Managing Director of The Homebuyer Show, said: “Buying a property overseas is becoming a lot easier, with many of our exhibitors looking after the entire procedure from initial visit to signing the contract.

“An entire section of the show is dedicated to buying homes abroad, ranging from traditional markets such as Spain, Florida, France, Greece and Italy, to emerging markets such as Bulgaria and Shanghai.”

For direct investing in any brokerage company, one should make himself comfortable with the usual investment strategies followed by the pros everywhere. A lot of attention is being paid to financial planning now. Earlier an alien term ,everyone is well aware about forex and the trends related to online trading.

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