ECONOMY

New mall planned in Sofia while property prices rise

SOFIA (SeeNews) – Bulgarian real estate investment trust (REIT) Prime Property BG has bought over 1,600 square meters of land in Sofia at a price higher than 1,000 euros per square meter and is looking for more nearby in order to build a shopping mall, a senior company official said. Prime Property BG hopes to increase its acquisition located near the central railway station in Sofia to at least 2,700 square meters, Investment Projects Manager Hristo Girginov told SeeNews. «Our idea is to buy as much land in the area as possible,» he said. There has been a construction boom in Sofia over the past four years, as the country drew closer to its EU entry planned for 2007. A rise in living standards, albeit slow, easier access to bank loans and increased foreign investment have helped the boom and a surge in property prices. Girginov said Prime Property BG wants to build a shopping mall on the land it is buying with the size of the building to depend on the acreage acquired. He said construction works might cost 5 million euros but, depending on the project, the price tag could rise as high as 15 million euros. Construction work is planned to start at the beginning of 2007 at the earliest. The mall will offer store and office space for rent and will have an underground parking lot. Buying land in good locations in Sofia has become hard, since most areas suitable for construction purposes have already been sold, while the few remaining ones either have an unclear ownership status or their owners expect to get unreasonably high prices, Girginov said. Land prices in Sofia are already high and are likely to remain so in the near future, because demand exceeds supply, Girginov said. He expects prices to rise only for land suitable for construction purposes in central locations in large cities and seaside and mountain resorts.