Bulgaria Looms as the Next Real-Estate Hotspot
Bulgaria Looms as the Next Real-Estate Hotspot: Matthew Lynn
Aug. 17 (Bloomberg) — A villa overlooking the Black Sea? Or a flat in the Bulgarian capital, Sofia? If you happened to be vacationing in the area this year, you might have noticed just how temptingly cheap all those properties for sale are.
Now you can take a chance on the market without going to the trouble of dealing with real-estate agents and lawyers. Several recent initial public offerings in London have been designed to raise money for the booming property market of Bulgaria. Some other share sales were aimed at the Russian market.
The catch-up between property values in Western and Eastern Europe isn’t finished yet. Even as house-price bubbles burst in Western Europe, emerging markets such as Bulgaria may be immune.
Rapidly modernizing economies, rising investment and asset prices, and booming tourism, will keep property values climbing for years. In the long term, Eastern Europe’s real-estate boom may stall as population growth wanes. Still, that’s a long way off.
There is certainly no shortage of vehicles to put your money into. In London, several new companies have come to the market in the past few months raising funds to invest in Bulgaria.
Black Sea Property Fund Ltd. staged an IPO on London’s Alternative Investment Market in March, raising 50 million pounds ($90.6 million) to invest in luxury holiday apartments in Bulgaria. It joined Bulgarian Property Developments Plc, which has been acquiring land for development in the country, which listed on the same market two months earlier.
Orchid Developments Group Ltd., a hotel and property development company operating in Bulgaria, listed its shares in London last month. Meanwhile, the Lewis Charles Sofia Property Fund, specializing in developments in and around Sofia, also plans a London share sale. It aims to raise 50 million pounds.
