The total office space class A and B in Varna in Q1 2022 didn’t change significantly compared to the end of 2021 and reached 262,200 sqm. The new stock was concentrated predominantly in few small office buildings. Vacancy rates retained its level of 11% due to insufficient supply and moderate demand. 24,500 sqm were in active construction. Demand was dominated by IT & outsourcing sectors with 69%, retail 25% and professional services 6%. The average asking rent class A and B remained stable at EUR 8 and EUR 5 per sqm, respectively.
The total stock class A and B in Burgas kept the level of the end of 2021 - 66,460 sqm. Vacancy levels remained stable at 4%. At the end of Q1 2022, the projects in active pipeline were 22,100 sqm. In terms of demand, professional services (53%) prevailed marginally over IT & outsourcing sector (47%). Average asking rent for class A and B stayed at EUR 7.5 and EUR 5 per sqm.
Developers in regional markets are cautious about starting new investments. This is partly due to the moderate tenant activity and the uncertainty surrounding the future working model in the medium and long term.
The presence of coworking and flex operators is predicted to grow and diversify.
In 2022, asking rents for prime office spaces are not expected to significantly fluctuate, while increasing competition from newly built properties may translate into rental reductions in older, class B office buildings.
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