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The Bulgarian office space market remains stable during state of emergency

MBL conducted a survey among 85 landlords in Sofia whereas overall results indicate that there is a level of comfort among experienced developers with sustainable office buildings.

Despite the covid-19 crisis only 4% of respondents will postpone paying loan principal and 65% specify that they do not expect to lower rents. This indicates both healthy levels of leverage and sustainable rental income based on strong tenant roaster.

73% of the participants have noted that the shortest rental agreement in their buildings will be 5 years while 22% have indicated that they will accept a 3-year agreement. As for the changes requested by tenants – 71 % asked for deferred rental payments.

The most popular measures to prevent the spread of the disease include new cleaning protocols, social distancing and coordination between tenants and landlords with the goal to safely reopen workspace.

Our short term expectations are that there will be a downward pressure on rents and increase in the vacancy rate, combined with slower leasing activity that we already witness.

Read the report here.
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