JLL chooses Avalant as its Bulgarian representative for offices deals

The main function of the exclusive partners in the country is to serve corporate clients of JLL Romania, which also operate in the Bulgarian market. In return, JLL's network, which now covers more than 80 countries, will be of assistance to local firms working with Avalant, which might have enquiries overseas.

In addition, the two companies will do bespoke analytics for clients each in its own segment as well as prepare the JLL Sofia City Report, which the global company will distribute publicly from early 2020.

"Partnering with a company like Avalant is a strategic choice that will help us increase our presence in Bulgaria. We are confident in the synergy between our global expertise and Avalant's local knowledge and experience, and believe that this combination will bring many positives for both companies and their clients," Marius Skuta, Director and Head of Office and Tenant Representation at JLL Romania, said in a press release.

Competition for the office and investment segment

Ivan Parmakov from Avalant told KInsights that JLL selected its Bulgarian partner in the office and investment segment through a competition. Avalant received an enquiry in the late autumn of 2021; they filled in a questionnaire on their way of working, then had a meeting in Romania to get acquainted, finalizing details. The decision to work together in both segments was made in early March.

JLL Romania explains that they chose Avalant because of "their experience, knowledge and vision, which is similar to ours". "We spoke the same language. The deals are not going to be different in the material aspect, but volumes in the two countries diverge a lot," says Ivan Parmakov.

JLL Romania's client portfolio, for example, includes office deals for 32,000 square meters for Amazon, 9,000 square meters for Societe Generale BRD, 14,000 square meters for Societe Generale EBS, 24,000 square meters for Microsoft and 18,000 square meters for Ericsson.

"[JLL] wanted to make sure that when they refer to us companies with whom they work, they will get the same quality of service as in Romania. I think we won them over with our great experience, and our portfolio proves that companies trust us," Mr Parmakov added.

Avalant is a relatively new and fast growing company. They were founded in mid-2020 by three professionals who worked at the leader in the office consultancy market in Bulgaria, MBL. Hristo Andonov, Dimitar Ivanov and Ivan Parmakov say they cumulatively have 28 years of experience in the commercial real estate sector and in the office space, property management and investment asset sales segments in particular. In the second year of their existence, they already took part in deals covering 20,000 square meters of office space lease transactions, as well as the sale of the 4-star city hotel Suite Hotel Sofia (with an area of 15,000 square meters). Their clients include Allianz Holding, ING Bank, Chaos Group, Cargill, Proxiad, and Emerchantpay, etc.

JLL and Bulgaria

JLL has been present on the Bulgarian market for 14 years, but only indirectly. Until three years ago Bulgaria was under the umbrella of the firm's Serbian office. The Belgrade office team's switch to CBRE (the number one company in The Lipsey ranking) is a well-known story in consultancy circles. Currently, CBRE Southeast Europe, which is based in Belgrade, covers the Bulgarian market through the local office in Sofia. In 2017, JLL transferred the Bulgarian market to the Romanian office. Until then, the company used various local agencies and freelance consultants for transactions in the country.

A probable reason for the lackluster interest of the giant in the Bulgarian commercial real estate market is that it is relatively modest, while the third and fourth companies in the Lipsey ranking have been present there for a long time. Colliers has been in Bulgaria for 25 years, Cushman & Wakefield for 15, CBRE has also been here for a long time, initially in partnership with MBL. In the last year Avison Young entered the country - in partnership with Slavchev Consulting and Knight Frank.

The market as a whole looks clearly divided among these main players and there is no room for a new big competitor. On the other hand, market watchers explain that JLL has corporate clients to service in the country. While Bulgaria is in theory covered by the Romanian office, the team there is not able to cover the country's market as well due to its preoccupation with the larger domestic market.

In 2019, JLL decided it was more efficient to concentrate the process in one partner. "We were selected by a competitive process," says Maya Baltadjieva, majority owner and managing partner at Iris Property Consulting (IPC Partners), where Hristo Angelkov also has a small stake. "JLL has large corporate clients and wants to make sure it is served in the best possible way, which is why it is looking for a professional service," she adds.

Avalant commented that they are currently in the process of getting to know JLL and are not yet working on a specific deal.