They own 600 thousand square meters of offices in Sofia or half of the total available 1.24 million square meters of class A areas in the capital. They were built in the last 20 years, and some have already been resold once or twice.
The leading ten are a colourful group of local investors, European funds and one American, some investors from Central Europe, with exotic participation from the East, even from South Africa.
1. The giant
The construction of Business Park Sofia in the southeastern Mladost 4 district was the biggest event in the nascent office market of the capital some 20 years ago. The project of Germany's Lindner project led by Rosen Plevneliev, who later became President of Bulgaria, was built gradually and remains Sofia's giant with an area of 100,000 square meters.
The land was acquired in 1999 through numerous transactions with private individuals. Active construction ran from 2001 to 2008, and a new building was added in the last five years. During this period, the owner also changed - in 2006, Lindner sold Business Park to Arco Capital Corporation (then part of American fund Gramercy). The buyer took out a loan from Deutsche Bank to pay the price of 120 million euro, and later a fund of the German bank also acquired a stake in Arco. The deal for Business Park was concluded at a record low yield to date - 6.4% (currently the yield is 7.75%).
Over the years, the owner fund explored the market for a potential sale but a deal was never made. On the other hand, bank loans were constantly refinanced. The last one is from 2020, with a principal amount of 132 million euro, and was granted by DSK Bank, OTP Bank and Postbank. The income from rents and other activities topped 27 million levs in 2020, which is slightly below compared to previous years because of Covid. The profit stands above 11 million levs.
2. The brothers near the mall
The second giant is also well-known. The European Shopping Center complex was constructed by the Popov brothers Valentin and Desislav in 2008. In addition to the four office buildings, it also included The Mall (already resold twice). The office areas are 60,000 square meters, with the first highest tower (17 floors) long-term rented by Bulgarian Telecommunications Company (BTC) operating under the Vivacom brand. The revenues for 2020 came in at 19 million levs, and the net profit was 5.1 million levs. Again, the financial results are slightly weaker compared to 2019 due to the pandemic. At this time, there was a loan with a principal amount of 79 million euro from Postbank.
In the same area, between kilometers 4 and 5 of Tsarigradsko Shose Boulevard, a new 14-floor building was completed last year. Formally, the investor in the project is a company related to arms dealer Algans, owned by Alexander Dimitrov. And, again, the Popov brothers also hold shares. According to the last recorded data, the ownership leads to an offshore location in Hong Kong. The construction was financed with a loan of up to 25 million euros from DSK Bank, and the investors' participation was 9.5 million euro.
The Popov brothers are also known for other initiatives - after swapping properties with Sofia municipality, they invested in the construction of the Sofia Land entertainment complex, which was later closed. Over the years, they were also involved with land in other mall projects related to the Greek franchiser of Carrefour. They were briefly shareholders in the Piccadilly supermarket chain, which went bankrupt later.
3. South African investors
The Bulgarian-South African fund Lion's Head is also in the top 3. It owns two buildings on Tsarigradsko Shose Boulevard - Megapark and Poligrafia, with an area of 45 thousand square meters and 26.4 thousand square meters, respectively. The two buildings were acquired together by Lion's Head four years ago.
The largest institutional investor from South Africa - Old Mutual Group - holds a stake of 91.5% in Lion's Head and the Bulgarian real estate-focused holding company AG Capital owns a minority stake. Megapark had revenues of 16.6 million levs (8.49 million euro) and generated a profit of 1.7 million levs in 2020. The revenues of Polygraphia Office Center totalled 10 million levs and its profit amounted to 4.1 million levs. Both assets are staked to Unicredit Bulbank under loans of 50 and 32 million levs, respectively.
South African funds entered Bulgaria five years ago and bought the largest malls in Sofia in several transactions. AG Capital's major shareholder Hristo Iliev has been active in the real estate market for decades. Until recently, he was also a co-investor in an office building in the Hladilnika district which was sold to SAP in 2021.
4. The Kazakh family
Garitage Park residential and office complex is currently fourth in the ranking with almost 70,000 sq m area. If the investor completes the planned volume, the area will reach 95 thousand sq m and will be slightly lower than that of the leader, Business Park Sofia. The construction began in 2016, and today there are four office buildings completed. The total planned investment is 180 million euro, partially financed by a loan from Unicredit Bulbank (45 million euro so far).
The complex is owned by the family of Kazakh politician Aslan Musin, who was considered President Nazarbayev's right-hand man until 2012. The former manager of Colliers for Bulgaria Atanas Garov, and David Davidov, who run Garitage, also have small stakes in the company.
5. Miroglio's trio
The Italian with a Bulgarian passport, Edoardo Miroglio, known for his involvement in textiles and wine production, entered the office market in the distant 2002 with the purchase of The Interpred World Trade Center Sofia. Not long ago, he became the owner of two more buildings and now manages a total of 55,000 square meters of office space.
In 2018, Miroglio acquired the last headquarters building of bankrupt Corporate Commercial Bank on Tsar Boris III Blvd for 38.5 million levs and the unfinished bTV studios for 65 million levs near the Sofia Ring Road and its intersection with Bulgaria Blvd which he converted into offices. The seller of both properties was connected to the MRF MP and businessman Delyan Peevski.
Interpred is the largest building in Miroglio's portfolio, with 3.7 million levs in revenues for 2020, and a profit of 1.2 million levs.
6. Investor from Central Europe
The Polish company GTC which entered Bulgaria as an investor in malls gradually spread to the office market. In Bulgaria, the group manages four projects - Mall of Sofia, the adjacent office part of Sofia Tower 1, Advance Business Center I and Advance Business Center II, which are located next to the Business Park in Mladost 4 district. At the moment, the group is about to complete a second office building next to the Mall of Sofia (9200 square meters) which will be called Sofia Tower 2. In 2021 GTC acquired land again in Mladost 4 district, where it plans to build 9 thousand square meters of offices. Thus, the group will certainly increase its current office area, which is 51 thousand square meters and has a chance to overtake Edoardo Miroglio in the ranking.
Originally, GTC was Israeli-owned. Then the majority control passed to the Lone Star fund owned by the American financier and billionaire John Grayken. In 2020, the Hungarian group Optima, which was created to manage assets of the Hungarian National Bank, became majority owner. London-based Icona Capital fund acquired from the Hungarian group a stake of 15.7% for 140 million euro earlier this year. According to data from the end of 2020, the GTC's assets are valued at 2.2 billion euro.
7. The only listed company among biggest office owners
Bulgarian Real Estate Fund (BREF) is the largest listed company focused on real estate among the 10 largest office owners. BREF started to operate in 2005 and currently has three office properties: Building 1 in Business Park (7,300 sq.m.), The Bells building at the outer edge of Sofia ring road (9,300 sq.m.), and now the group is completing its largest project - Synergy Tower (32 thousand sq. m) located in Sofia Tech Park. The investment in the new 16-floor tower is estimated at 40 million euro.
As a listed company, most of BREF's shares are held by pension and mutual funds. The founders - Todor Breshkov and Kaloyan Ninov, own minority stakes.
8. The tallest building
Capital Fort with its 126 m height is currently the tallest building in Sofia and Bulgaria. It was built in 2015 by the Fort Knox group and is located on Tsarigradsko Shose Blvd, at the entrance to Sofia from Plovdiv. Together with the low body, its area is 44 thousand sq.m. In 2016 the same investor started a "real" skyscraper according to global standards - the Sky Fort building will rise to a height of 202 meters and will offer 40 thousand square meters. The announced investment was 100 million euro, and the deadline for completion was 2021, but construction has been delayed. The rough structure is now ready, but no official completion date has been announced.
Fort Knox entered Bulgaria with holiday properties by the sea, but in recent years it has been much more visible with its high-rise buildings in Sofia. Capital Fort had revenues of almost 23 million levs and a profit of 6.8 million levs in 2020, while Fort Knox had revenues of 59 million levs from the sale of vacation properties, rents of shops and from the Premier hotel in Sveti Vlas coastsl resort.
The owners of the Fort Knox group are the Bulgarian national Georgi Ivanov, the Ukrainians Vladimir and Igor Kukui, and Stanislav Yurievich Parkhomenko who has acquired a Bulgarian passport. It is curious that, unlike the others in the ranking, there are no bank loans in the investments of the group.
9. In the eastern part of Sofia
The Franco-Bulgarian company Bernard Investments is focused on offices in the eastern part of Sofia. In 2011, it entered Bulgaria by acquiring Iztok Tower bordering the roundabout at the 4th kilometre of Tsarigradsko Shose Blvd. At the end of the same year, it bought the opposite building, where Oriflame Bulgaria's office is located, as well as the Tetrix business centre located on Dragan Tsankov boulevard. In 2014, Bernard Investments became the owner of Europark, located again on Tsarigradsko Shose Blvd. Its portfolio also includes the Rubix building close to Europark. The company invested in Grafix Business Center, on the corner of Tsarigradsko Shose Blvd and Jerusalem Street. In 2018, American Progress (the buyer of Telerik) entered the newly constructed building as a tenant.
When it entered Bulgaria more than 10 years ago, Bernard Investments was owned by the French investor Nicola Rene Colonna-Valevski. He is the manager of one of the large equity investment funds - Alken European Opportunities. Later, Barbados-registered Sophie Capital became majority owner with 90% interest. According to the Commercial Register, it is owned by Gérard Philippe Emile Claude Lucan, and the director of the company is Philippe Jean-Marie Michel de Lavner Lucan.
10. Cooperatives-to-offices switch
For 27 years, Emil Terziev's Art E Stroy has constructed 40 buildings - at first mostly residential and mostly in the Lozenets district. In the last five years, he has been focusing on office buildings in the nearby Hladilnika district. There are already five of them in the area around Mall Paradise: EM Building, Srebarna, Moby Art Building, South Park Building and EN Building. The revenues for 2020 are modest and there are no bets on bank loans.
Contenders for the top ten
The first three after the top ten are the towers next to Bulgaria Mall, owned by the former director of Russia's Lukoil Oil Company Vagit Alekperov, the Raiffeisen complex Expo 2000, and the Israeli BSR with two new buildings in the Geo Milev district.
With their Office X project for over 55,000 square meters in the Hladilnika district, Asen Lisev and Spas Shopov will probably enter the top ten when it is completed.