Bulgaria’s coastline is attracting foreign property investors like bees to honey. Peter Conradi of The Sunday Times does the maths, wondering if they’ll profit in the longer term

It begins on the plane from Britain: pick up a copy of the in-flight magazine of Bulgaria Air, and almost every other page carries an ad for the latest Black Sea apartment complex, each apparently more glittering, splendid and — above all — profitable than the last.

Pitch up in Sunny Beach, the brash heart of the coast, and the streets are full of estate agents peddling luxury flats and seaside villas. People go on holiday here, it seems, as much to snap up property bargains as to lie on the sand.

The Bulgarian property market is booming. Old-style communist resorts that were once the summer playground of Russian, Czech and Polish workers are being demolished and replaced by a Balkan version of the Costa del Sol. In scenes familiar from the Spain of the 1970s and 1980s, virgin coast is filling rapidly with apartment blocks and prices are climbing steadily. The price of land, meanwhile, is going through the roof: plots five or 10 miles inland are being snapped up even if the sea views are so distant that you need a telescope.

Curiously, though, the boom is being driven largely not by people looking for holiday homes for their own use but by investors lured by rock-bottom prices and the hope of rapid returns.

The Bulgarian coast, stretching for more than 100 miles between the Romanian and Turkish borders, certainly has much to offer. Those seeking sun, cheap beer and noisy nightlife will make for Sunny Beach or the slightly leafier Golden Sands — known respectively as Slanchev Bryag and Zlatni Pyasatsi to Bulgarians, they have been rebranded under English names for the British market. Other more upmarket resorts are also springing up in quieter coastal locations. And in the ancient city of Nessebar, about a mile south of Sunny Beach, the Bulgarian coast can boast a world heritage site that was already a Greek colony in the 6th century BC.

Golf, the great motor behind much Spanish property development, is also on its way. Gary Player, the South African veteran, is involved in developing two courses near Kavarna. Others are planned, with a mixture of foreign and Bulgarian backers. There is also talk of exploiting the country’s traditional spas and exotic mud treatments.

The growing interest is reflected in the tourist numbers, especially from the UK. More than 250,000 of us went on holiday to Bulgaria last year — 62% more than in 2003 and more than three times as many as in 2001. The overall number of visitors, at just over 4m, was up 14%.

Many Brits have been combining holidays with a little judicial home-buying, lured to Bulgaria by developers offering low prices and promises of high yields and double-digit growth. Much of the action is off-plan, with some investors already cashing in and selling on flats during the typical 15 months it takes to build them.

Despite 40%-50% increases in the past year or so, property remains remarkably cheap by Spanish, let alone British, standards. It is still possible to buy a studio in Sunny Beach for as little as £300-£400 per square metre, although the view from your window will be of concrete rather than sea or sand. Remember to check out the soundproofing, too: at the height of the season, the music in the open-air bars is still pounding at 3am.

Moving up the scale, Manchester-based Bulgaria Revealed is about to start selling flats in Emerald, a luxurious resort at Ravda, a few miles from Sunny Beach. Building began only this summer, but the developers are confident it will be ready in time for the high season next year. To sweeten the deal further, there is a guaranteed yield of 4.5% next year, followed by 7% in 2007.

“We are going to install a webcam so people can see, 24 hours a day, their apartment being built,” says Maria Chepova of Pioneer Development, which is constructing the complex, as she picks her way through the muddy building site with Mina Valcheva, one of Bulgaria Revealed’s property agents.

Near Kavarna, Bulgarian Properties is offering an even more generous 9% guaranteed annual yield — albeit only for an initial 18 months — on its Saint Nicola Lodge of 18 one-bed and nine two-bed flats. Due to be completed in May 2006, the units — all with sea views — range from £39,200 for a 73sq m one-bed flat (which works out at just over £540 per square metre), up to £88,750 for a 165sq m penthouse with two bedrooms.

It would be foolish, though, to base a long-term strategy on rent guarantees that are limited in time and difficult to enforce if things go wrong. With most purchasers buying to let, everything depends on the ease of finding tenants and how much they are prepared to pay. The holiday business in Bulgaria is largely package tour-based, so this normally means finding an agent dealing with Balkan Holidays or other operators, who will rent your flat for the season.

Unlike Spain, with its mild winters, the Bulgarian season lasts a maximum of 120 days; the beaches that seemed so welcoming in July and August can be dusted with snow in January and February. So just a few weeks empty during the season can cut quite sharply into your return.

But, as Jeremy Leach, 34, an IT specialist from Reading, has discovered, there is certainly money to be made. Since spotting Bulgaria’s potential two years ago, he has invested more than £110,000 in two flats on the coast, a village house in Nikolaevka, 14 miles inland, and some land — and reckons to have doubled his money already.

Whether this will continue to be the case remains to be seen. After selling on the first flat, in Varna, in April for a healthy profit after just over a year, he has tried to repeat the trick with a second apartment he bought for £46,000 in the Fort Knox development in Sunny Beach. Three months later, it is still on the market.

“In the past year, so many builders have been flooding Sunny Beach with new off-plan apartments that the level of competition has gone up drastically,” says Leach, who is asking £55,000 — about £3,000 less than the developers want for finished units.

“It seems easier for people to sell off-plan apartments than real ones, because they have huge marketing campaigns for them and everybody is trying to grab them before they go. But if they do have some flats left over once the building is finished, the development companies don’t have so much to spend on the marketing.”

Although Leach remains bullish, the difficulty he is having in disposing of his latest apartment is seen by some experts as a warning sign of trouble ahead. According to this pessimistic scenario, the bargain prices that are Bulgaria’s main selling point will gradually converge towards European levels, especially once the country has joined the EU, likely in 2007. If this in turn dampens the growth in tourist numbers, they warn, then the tour operators will cut the amount they pay to rent flats, squeezing yields.

Patrick Berger, who has analysed the Black Sea property market for CA-IB, an investment bank that specialises in emerging Europe, is concerned at the sheer size of the flood of British and other Western money pouring into Bulgaria in search of investment projects. He fears the result could be the kind of overbuilding that has blighted much of the Costas.

“If you want to make a profit, then invest now, but you need to monitor developments and time your exit from the market carefully,” Berger says.

“It’s not something where you can invest and then just go to sleep at night, because overnight they might start building a mega-complex next to you.”

Jonty Crossick, co-founder of Brighton-based Ready 2 Rent, which has already sold more than 130 flats off-plan in Bulgaria for other developers and is developing three complexes at Kranevo, Obzor and Akutino, has little time for such doom-mongering.

As Crossick sees it, high economic growth and foreign investment, rising tourist numbers, a stable currency and political system and impending EU membership make for an irresistible combination. A further boost is likely to come from the eventual arrival of low-cost airlines that will bring in individual tourists alongside those on packages.

“Once Ryanair and EasyJet get in there, it will be a whole different ball game,” says Crossick. “We wouldn’t let our investors go into these off-plans unless we felt there was real demand. There has actually been a flattening off in the supply of developments, while tourist numbers are still going up. It’s like Spain just before it joined the EU.”

Peter Conradi, http://www.timesonline.co.uk , 21th August, 2005

Number of property transactions increases...

There is clearly expressed trend of increase in the number of property transactions in Bulgaria since 1998, a research of BGAID the consulting agency, showed. According to the company's prognosis, in 2005 the total number of deals is expected to reach 214 thousand. The number grows compared to 2003, when they were 194 thousand, with one third. Most of the deals are expected to be in Sofia and in Varna-over 54 thousand. According to BGAID's research, the turnover of real estate market for 2005 is expected to reach BGN 6.9 billion. The share of real estate sector in all direct foreign investments grows as well.

Although Bulgarian property is cheap it is of good quality...

"Although Bulgarian property is relatively cheap to British buyers it is also of good quality. Cheap does not mean poor quality. People get good quality products at very reasonable and sensible prices and a very good return of their investments, particularly as 2007 comes. I separate buyers in three basic groups. These are investors who buy to get advantage of price growth, people who buy with holiday purposes and the ones who emigrate from the UK in search for better quality of living."

Simon Finnan, KPMG

EU Welcomes Bulgaria as Member…

Bulgaria cleared the final hurdle to join the European Union as early as 2007 when it signed an accession treaty on Monday, more than 15 years after overthrowing communist rule.The signing ceremony at Luxembourg's Neumuenster Abbey opened the way for the EU's second wave of enlargement into eastern Europe a year after the bloc's "big bang" expansion brought 10, mostly ex-communist countries into the bloc.

"Today we are celebrating ... the accession treaty with Bulgaria and Romania, it's a historical event in its own right. I recognize the fact the atmosphere in Europe at the moment is not entirely joyous," Luxembourg Prime Minister Jean-Claude Juncker, who holds the EU's rotating presidency, told a news conference."The courage of Bulgarian and Romanian people to carry out landmark reforms impressed all of us," Juncker said, calling on current EU members to open the door to "these courageous people, these noble people, into the heart of our family.""Today we assume the responsibility to take part in the decision-making process within the EU," Bulgaria's prime minister said after signing the key document. Simeon Saxe-Coburg stressed that Bulgaria was returning to the family of European nations."Today, my country is united for the European cause," he stated in a post-signature address.

EU entry will provide Bulgaria ith billions of euros in aid to repair dilapidated roads, clean up the environment and upgrade its outmoded industries.It should provide key investment in states whose economic output per capita is well below 40 percent of the EU average and will extend the EU's place as the world's biggest trading bloc.Bulgarians celebrated the signing of the EU accession treaty with concerts, parades and fireworks across the country.

Bulgaria was welcomed into NATO…

On 29 March, Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia formally became members of NATO by depositing their instruments of accession with the United States Government.At 1:00 pm local time, the Prime Ministers of the seven countries handed over their instruments of accession to the North Atlantic Treaty to US Secretary of State Colin Powell, who accepted them on behalf of the United States, which is the depository nation for the Treaty.The ceremony took place in the Cash Room at the US Department of the Treasury in Washington, D.C.

At that moment the seven countries formally became parties to the North Atlantic Treaty and members of the North Atlantic Treaty Organization. This is the fifth and the largest round of enlargement in NATO’s history, bringing NATO to 26 member countries.

The event was celebrated with a special ceremony hosted by United States President George W. Bush at the White House and attended by NATO Secretary General Jaap de Hoop Scheffer.

The accession of the seven new members will be marked by a special flag-raising ceremony at NATO Headquarters in Brussels on 2 April. It will be followed by an informal working luncheon of the Foreign Ministers of the now 26 member countries.

Bulgarian property market still have potential…

European business editor Ambrose Evans-Pritchard has made a review of Bulgarian and Romanian stock market and the opportunities for investments.

The Romanian and Bulgarian stock markets have both tripled over the past two years in anticipation of imminent EU membership, but analysts insist there is still plenty of money to be made in the 'tiger' economies of the forgotten Balkans.

Plamen Monovski, manager of Merrill Lynch's Emerging Europe Fund, said that in Bulgaria car sales rose 46pc and property prices by 31pc last year, one of the highest rates in the world, with 5.7pc GDP growth forecast this year. However, the IMF has warned against overheating.

Even so, Mr Monovski said the equity and property markets still had potential. "Property prices are still very low compared to areas of similar beauty and geography. Bulgaria is a country where you can ski six months of the year, yet there are lovely beaches not far away," he said.

For more information go to www.BgAid.com

Bulgaria Is In Top 20 Best Places To Buy Abroad…

The overseas property market is opening up as never before.

On Channel 4's 20 Best Places To Buy In The Sun Amanda Lamb chose her 20 recommended property destinations.

Bulgaria is in the list of the top 20 destination for the UK nationals wanting to go out in the sun for a holiday home. The main advantages pointed here are the low properties’ prices the and the beautiful scenery.

The ful list includes:

#1 The Algarve

Golf courses, beaches, sun - no wonder it's number one

#2 Cape Town

Africa's property hot spot still offers investment potential.

#3 Turkey

The country with something for everyone

#4 Slovenia

One of the most beautiful places in the world.

#5 Limousin

Beautiful scenery and quiet farming villages and as yet relatively undiscovered.

#6 Bulgaria

A cheaper Costa del Sol with houses for the price of a second hand family car in the uk

#7 Teruel

The cheapest place to buy in Spain

#8 Croatia

Once a tragic war zone now a highly desirable destination

#9 Cyprus

A taste of home with added sun and sand

#10 Normandy

Not just a holiday home - you could live here and work in England

#11 Barcelona

One of the most expensive places to buy property in Europe. But worth every penny.

#12 Cape Verde

Great beaches, fantastic surf and wonderful weather

#13 Tuscany

Find the population of Islington on their summer hols

# Costa del Sol

Still famous after all these years

#14 Down Under

Youth and action in Australia, peace, solitude (and cheaper prices) in New Zealand

#15 Florida

The no1 long haul destination for British buyers and scene of a classic tv series.

#16 Marrakech

Hang out in the Medina with Richard Branson and the Rolling Stones

#17 St Kitts and Nevis

If you're not intimidated by self-build or the long haul this could be for you.

#18 French Riviera

(Cannes, St Tropez, Monaco) If conspicuous consumption is your thing and you don't mind paying £10 for a coffee.

#19 Dubai

Modern buildings and a booming market. It used to be all sand round here.

The Bulgarian Revolution…

Anyone hoping to retire overseas on a budget should look to Bulgaria and the E.U.’s expanding eastern border.

Thanks to recent property price rises in the UK, more and more of us are cashing in on the value of our homes and choosing to retire abroad, where the cost of living is cheaper. Spain and France have been the most popular retiree destinations among Brits in recent years, but because of this, property prices have gone up rivaling the UK in many sought after locations.

The ‘elderly exodus’ has hit property prices throughout the Mediterranean region. In Croatia for example, a two bedroom flat will now set you back at least ?200,000 in the more popular resorts. Hard to imagine when you think just 12 years ago the country was being ravaged by war.

But if you want to move abroad, but can’t afford to buy in the more popular destinations, Bulgaria could prove the perfect destination for you to invest for your retirement.

Although not joining the EU in May, Bulgaria has been formally invited to join in May 2007. After this date, property prices are likely to rise, so now could be the time to invest.

Indeed, Bulgaria has been touted by many in the know as a potential future property hotspot. In comparison to UK prices, property in Bulgaria is still extremely cheap; An 80 Sqm in the prestigious Veliko Turnovo area of the Capital Sofia will set you back 27, 000 Euros (?18,000). With prices likely to increase with EU membership, as well as been a great retirement home, any Bulgarian property purchase could become a great investment too. At the moment, however, buying a property in Bulgaria is a little laborious for foreigners. Under the Bulgarian act on Foreign Ownership, foreigners are not allowed to own land but they can own buildings. To get around this fact, foreigners can set up a Bulgarian company to hold the land for them. As the date for EU membership nears however, this formality is likely to change.

Bulgaria lies on the Black Sea and has summer temperatures to rival, if not better, the Mediterranean. And of course, good weather also means good wine, fruit and vegetables. It might not have the same facilities as Spain or France, just yet, but for a fraction of the cost you could retire in style.

Bulgaria Property Index 2004 – 2005

REMI – Real Estate Market Index for investment activities Bulgaria was established in September 2002. Bulgaria is the first country from Central and Eastern Europe, which established the national Real Estate Index.

REMI in Bulgaria is a professional indicator for investment and business activitiy in the real estate sector. It is published on a quarter basis by the National Real Property Association (NRPA) , which is a principal member of FIABCI (International Real Estate Federation). The Index displays the data from the 157 members of NRPA, which represent approximately 80% of the Bulgarian Property Market.

REMI is public and generally accessible. The Bulgarian and foreign property investors, financial institutions, administration, consultants in the area of real estate etc., can benefit from the information provided by the Real Estate Index.

For the entire 2004, the Real Estate Market Index - SALES has risen with 30.88 points and for the last quarter REMI has increased by 9.5 points. For the period Q1 05 REMI has increased by 16,5 points, which equals to more than 10 %