The construction of a new landmark office building in Business Park Sofia (BPS) will secure its continued position as the largest business office park in Central and Eastern Europe
At the same time, KPMG IT Service and Bulpros Consulting each signed respective five-year leases with BPS for its newest building; these transactions constitute some of the largest lease dealings on the Sofia office market during 2016.
Arco Real Property Holdings, a joint venture between Arco Capital and Deutsche Asset Management’s DB Private Equity & Private Markets group, has decided to develop and construct a new office building in BPS. The investment volume for this new building will be around EUR 30 million.
The construction of the Class “A” building, which shall be known as Building 15, is being directed by leading German construction management company Lindner Immobilien Management. The construction of the building has commenced and is expected to be completed at the end of 2018. Building 15 shall offer a total of 20,800 sqm of leasable space, with five levels designed for office use, retail units on the ground floor, and two underground parking levels with a total of 260 parking spaces.
Most importantly, the building has already been substantially pre-let to major international tenants. KPMG IT Service and Bulpros Consulting will initially occupy the vast majority of the building which is being developed specially for their requirements. Additional tenants will be able to let smaller areas of the building from around 200 to 3000 sqm. As of today, Building 15 has been 80 percent pre-let.
Like all new investments made by Arco Capital, this building will be planned and constructed as a green building in adherence to strict sustainability criteria. “The greenfield investment is looking to receive a LEED Gold or higher certification, and this was a consideration throughout the entire planning and designing process,” Christo Moskov, General Manager of BPS said. “We are happy that after eight years we can expand BPS. The new building will fit the high expectations of international tenants looking for state of the art office buildings in the Sofia CBD,” according to Moskov.
Its open space office floors with areas of 3,050 sqm, combined with a large structural span, provide flexibility to tenants of various requirements. The open atrium in the inner part of the building and the open park which will be designed on the roof top of the building will allow tenants to have more recreational space while enjoying the natural surroundings.
The increased demand for high quality office spaces located in a friendly and safe urban development, has required an expanded vision for BPS, the largest business park in Central and Eastern Europe, and a leading business location with its multifunctional high-tech infrastructure. The office market appears to be well short of supply for class “A” schemes. “The vacancy rate at BPS has been less than 1% for the past 18 months; it has never been so low,” Moskov said. “The overall market has picked up through an increase in re-letting and new leasing activities,” Moskov explained in his summary of market conditions. “Take up has grown significantly, and CBD pre-leases are becoming a trend. In the past few years, new office buildings were either almost fully rented through pre-leases or by the first few months after opening, at the latest,” Moskov commented. Arco Capital’s real estate arm manages approximately 200,000 sqm of built up area and more than 150 tenants, making it one of the largest property managers in the CEE region.
“These leasing transactions coupled with the construction of our newest building, demonstrates BPS’s strong position as the leading real estate player in the Sofia, Bulgaria and regional office market. They are also fully in line with our overall strategy of being opportunistic as to new investments and further improving cash flows through active asset management” said Moskov.