The Global credit crunch is affecting even ski resorts now. Bansko, in Bulgaria, despite still being heavily marketed, is feeling the pinch also. Interest in the town dropped off severely in 2007, with prices for hotel rooms dropping, and occupancy down.

Also affected are property prices and with a lack of interest from UK buyers, Bansko is attempting to pull in investors from Russia, Spain and Greece instead. Presumably the Spanish like to head away from the horrible winter weather, much like the Brits.

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Kiev Ukraine - Place de l’Indépendance [Photo credits to Panoramas on Flickr]

Some might ask if ‘coming of age’ was a good thing as far as property investors are concerned; the answer is probably ‘yes’. Ewan McGarrie of propertyinvestment.co.uk recently described the East European city centre market as ‘large and stable’ and particularly highlighted Budapest as a stable residential market with good capital appreciation prospects. Yesterday we juxtaposed the possibilities of much smaller Zagreb with Croatia’s Adriatic coastline and made the point that Zagreb, as the capital city, is drawing in the country’s professional ‘cadres’. However, there is a bigger story to tell in the dynamic economic prospects of Eastern Europe, which have been largely overshadowed by commentators concentrating on the BRIC (Brazil, Russia, India, China) economies. Unlike Russia and China, East European businesses are well placed for attracting the profitable, well-paid (development and marketing) ends of the “smiley curve” as well as the less remunerative manufacturing.
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On June 9th Guardian Unlimited carried a thought provoking article by Nikolai Chavdarov about the influx of UK investors in the property market of his native Bulgaria (A New Place in the Sun ). Taking as his starting point the results of the market survey by the Association of International Property Professionals (AIPP) on where UK citizens are buying property abroad, which ranked Bulgaria third after Spain and France, he raises important questions about the country spoiled by indiscriminate development and, by inference, the soundness of the investments that property purchasers are making.

Although, as the AIPP says, the growth in interest in Bulgaria has been extraordinary, their survey is for one year only – 2006. Total direct overseas property investment by UK citizens they estimate to have been in the region of £20bn with Bulgaria receiving 7.7% of that or £1.54bn. It’s worth noting that Spain and France between them accounted for about 50% of the total level of investment. It’s also important to remember that both these countries have long been favourites for property investments by the British. The significance of British interest in Bulgaria becomes starker when one considers the level of overall investment in Bulgarian property, which BulgarianProperty.com estimated at 5bn Euros in 2006. The proportion of this investment being made by UK citizens is indeed massive, especially when one considers that the number of households of UK citizens in Bulgaria only passed the one thousand mark last year.

On a positive note, there has been an encouraging increase in UK tourism to Bulgaria (up 12% last year on 2005 statistics with about 425,000 visitors). Another attractive feature of the Bulgarian property market has been good rental values in both the residential and commercial sectors. However, rental yields are likely to decline as property prices rise and it is also important to consider location and the quality of building work when gauging rental potential. In the future, the true health of the property market may be evidenced by a robust market in holiday lettings for better off Western Europeans.

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Coffee Republic plc, the British coffee and deli bar operator, will enter the Bulgarian market under a franchise arrangement with Property Links International.

The news, announced in a filing with the British stock exchange, was confirmed by Coffee Republic’s partners in Bulgaria. This is first international deal for Coffee Republic.

The first outlet of the British cafe chain will like open in a mall-like shopping and entertainment center under development in Black Sea resort Sunny Beach. It is due for launch in mid-2007.

Coffee Republic is also in talks to lease outlets in shopping malls in Varna and Sofia, said the Property Links representatives for Bulgaria. The British company plans to open up to 10 cafes in Bulgaria over the next 3-4 years.
Property Links is a master franchisee which means it can franchise the Coffee Republic outlets to third parties.

Coffee Republic is the second speciality coffee chains to launch operations in Bulgaria. It follows in the footsteps of LSE-registered coffeeheaven which arrived here a year ago.

Britain’s Costa Coffee is poised to enter the market within the next couple of weeks.
Austria’s Testa Rossa also has plans regarding the Bulgarian coffee house market but is yet to make a move.
coffeeheaven currently shares the market with locally-owned cafe chains Onda and Coffee House.

Source: Franchise-Hit

Related:

• Bulgaria specialty coffee chains caught in frivolous pricing war [Dnevnik]
• British cafe chain Costa Coffee opens first outlet in Bulgaria [Dnevnik]

Property prices were registering the highest increase in East European countries, data of the British property company Knight Frank, presented in Financial Times shows.

Japan continues struggling with price decrease, the report said. Property in Hong Kong was also losing value after a previous boom.

Worldwide, property has become 8.5 per cent more expensive, the analysis showed.

Significant price increase was observed for property in Bulgaria and Estonia. According to the analysis the increase resulted from the equalisation of prices in Europe. Because of investor interest property prices in Bulgaria went up by 20.5 per cent.

According to predictions Slovenia and Slovakia would become Europe’s property hotspots in the coming year. Economic recovery would also bring up property prices in Germany.

Source: Sofia Echo

Anybody who’s anyone in Europe these days is buying a vacation retreat. And they’re not doing it close to home, but in Bulgaria, Croatia and Morocco, the Newsweek writes in an article, entitled “Room with a View”.

The trend is particularly pronounced among northern Europeans looking for a place in the sun, says the author Stryker Mcguire.

“Along the Mediterranean “sun belt,” stretching from the Greek islands to southern Iberia, second homes make up 10 to 15 percent of total national housing stocks. The strongest markets are, unsurprisingly, France and Spain, the world’s first and second largest tourist destinations. But demand is so strong (and the investment prospects so promising) that the hottest hot spots today are countries like Croatia and Bulgaria.”

750,000 Britons now own second homes on the Continent, a privilege which is no longer only for the rich, show estimates of Caxton FX, a foreign-exchange company in London.

The Brussels bureaucracy that so many Europeans love to hate is one of the great driving forces behind the boom, the Newsweek argues.

“Aside from facilitating travel and allowing Europeans from one country to buy property in another, the EU has doled out hundreds of millions of euros in “structural funds”- “money that goes to new members for infrastructure improvements. This largesse has transformed countries that once lagged behind their neighbors.”

Newsweek describes the second-home phenomenon as the European Dream come true, but claims that the establishment of a United States of Europe will never come into being because of anti-EU sentiment. The author claims that the drivers behind second-home ownership are personal - they’re about family, fun and potential financial gain.

“The local people welcome foreigners because they bring money,” says Boyko Borissov, the mayor of Sofia, Bulgaria. “I don’t see any clashes or obstacles.”

Particularly welcoming are would-be home sellers who’ve seen their properties rocket in value as Western bargain hunters head farther east. In the past year alone, prices in Bulgaria have climbed at least 25 percent while remaining among the lowest in Europe.

Source: Sofia News Agency

Bulgaria was well known for its ski and summer resorts and the property investment opportunities there but the country was just beginning to develop golf property opportunities, easier.com reported.
Only three golf courses operate in Bulgaria at the moment, the website reported. Because of the foreign investor interest the country was ready to develop further this opportunity.
According to prognoses in 15 years Bulgaria was going to have 40 golf courses set up in strategic areas for investors and vacation property seekers, easier.com reported.
The coastal area offered good opportunities because of its climate. The milder weather there permitted year-round golfing, the website said.
Three international golf celebrities were involved in the creation of golf courses in Bulgaria, easier.com reported. Among them were Gary Player, Jack Nicklaus and 2006 European Team Ryder Cup captain Ian Woosnam.

Source: Sofia Echo