LUXURY REAL ESTATE BULGARIA

Few companies in Bulgaria have managed to prove the adage that a crisis presents opportunities, but drug maker Sopharma, with the growth of sales on foreign markets, is among them. Now it hopes that its real estate affiliate can do the same.

Among the large-scale construction projects announced or started just before the economic recession hit in late 2008, Sopharma Business Towers is among the handful that were not put on ice once the full effect of the financial crisis was felt.

It now nears completion, with company officials expecting to get a key operations permit in August, which would allow the office building to open their doors in late September.

The key, according to Sopharma Imoti executive director Boris Borissov, was sound planning.

"Facing a recession, it is necessary to have the financing in full even before the project begins. Risks can be lowered significantly by pursuing an investment in a 'green' office building, which ours is," Borissov told The Sofia Echo.

With 35 million euro in funding from Piraeus Bank, the project managed to benefit, if anything, from the onset of the recession and the devastating effect that it had on the construction sector in Bulgaria.

The financial crisis led to lower costs because of the falling concrete, steel and equipment prices. Sopharma Imoti even managed to upgrade some of the project's lesser details with more expensive parts and still stay within budget, Borissov said.

"The amount spent on construction is merely 20 per cent of all the costs incurred throughout the lifetime of a building, which in the long term gives 'green' architectural solutions an advantage over conventional construction. This is why we not only did not abandon the 'green' idea, but stuck to it even more closely, because the positive effect of the crisis is that it singles out the truly high-quality buildings," he said.

Specifically, this means using a double-skin façade designed for the project by two outside contractors, Köster Lichtplanung from Germany and Reynaers from Belgium. In addition to lower artificial light costs, it also filters sunlight to keep heat out in summer and keep it in during the colder months.

A distinctive layer of grass on the roof of the buildings works in the similar way to keep heat in or out, as needed, while also serving in to hold rain water and as an additional sound-proofing barrier.

Sopharma Imoti, a member of the Bulgarian Council for Sustainable Development, has applied for certification from Deutsche Gesellschaft für Nachhaltiges Bauen e.V., the German sustainable building council, for the project.

"The benefits of 'green' construction are two-fold. For investors it means quickly renting out the property and the long period that the investment maintains its value, as well as the return on investment. For the customers it means low maintenance costs and utility bills, a healthy and comfortable environment, reduced periods of idleness for maintenance or repairs, and easy facility management," Borissov said.

Sopharma, the drug maker, which has the same key shareholders as Sopharma Imoti but has no direct stake in the property developer, will be one of the main tenants of the buildings. Sopharma Imoti was in talks with two other big companies to rent out the rest of the space.

"We are talking about two truly big companies, including one that is considering to rent out a tower all for itself," Borissov said, but declined to name the companies, citing the confidentiality of ongoing talks.

So far, the company has rented out 80 per cent of 12 000 sq m of the commercial space, with the Piccadilly chain of supermarkets being just one of the big names. About 60 per cent of the 24 000 sq m office space has also been contracted.

"We're targeting a specific mix of stores, as well as two banks and restaurants, but the focus is very much on the office space," Borissov said.

The commercial space is meant to service mainly the office workers in the towers, their location on Dragan Tsankov Blvd, easily accessible by car and metro, would further expand the catchment area of the stores, which would be additionally bolstered by the absence of significant competition in the affluent nearby districts of Lozenets and Iztok.

Even so close to making Sopharma Business Towers a successful venture – the company would break even, including the costs of servicing debt, should it rent out 80 per cent of the office and commercial space – Borissov declined to be drawn into speculating what could come next for Sopharma Imoti. "We want to first wait out the external factors and the stagnating economy means that there is a limited number of possible tenants," he said.

Instead, the company will focus on managing its current portfolio of properties, he said.