Photo: NADEZHDA CHIPEVA
When the availability of office spaces surpasses the demand, sometime in 2010/11, some of the investors will try to buy off politicians, banker Stoyan Alexandrov said in an interview for the 24 Chassa daily, answering a question whether the property bubble would soon pop.
Because of the nearing saturation of commercial property market, to secure sales and rents, investors will want to have a state legislation passed, banning companies and small firms from using flats in communal blocks as offices, which is a common practice throughout the country, he was quoted as saying.
In 2003, Alexandrov was the Socialist candidate for mayor of Sofia. He also acted as a finance minister during the Lyuben Berovs cabinet (1992/94), and has been a chief executive of the Central Cooperative Bank and Tokuda Bank. At the present, he chairs the supervisory council of D Commerce Bank, owned by the Turkish businessman Fuat Guven.
Alexandrov has also commented that the property prices are speculatively high, pumped up by some buyers "out of snobbism"; by people who wanted to have a piece of land or a flat at specific locations, and, therefore, were willing to pay any price.
The bank executive has given an example and called it "a madness," with the town of Bankya, once a famous balneological centre, which is within close proximity to Sofia, and despite its bad infrastructure, land plots there run for 50-60 euro a sq m. Because some people obviously have found an easy way to make money, now they are looking for an easy way to spend it, Alexandrov was quoted as saying.
Asked to comment on the recent rumors that in the ski resort of Bansko some buildings were being torn down to free more spaces for greenery, Alexandrov has said that in a couple of years bigger hotels in Slunchev Bryag (Sunny Beach) will begin to buy out the smaller ones and then knock them down.
Construction without proper planning became possible because developers hand out bribes and there is no adequate state control, he has said and added that a significant part of the hotel business is held by various formations with a lot of money. They do money laundering despite the fact that they have lined up bank loans. Otherwise, the property bubble should have popped a long time ago, Alexandrov has said.
As previously reported by The Sofia Echo, Evgeni Vassilev, executive director of Arco real estate agency, also speculated that in about two years, there would be more that a million sq m of available office space. This could well cause saturation in that property market segment, he said.
According to Vassilev, location would continue to be a price-defining factor. He explained that foreign investors normally go for Sofias central district where all state institutions and administrative buildings are within an acceptable distance.
