British Airways will launch regular flights from Bulgaria’s Black Sea center of Varna to London March 29.
The pre-launch price of the return ticket is set at EUR 150. After the company starts to service the flights, the price will increase to EUR 200.
Initially the flights will be carried out twice a week – on Wednesdays and Saturdays. As of June 6, the company will fly planes four times a week.
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ROMANIA has emerged as the best European destination to invest in a holiday home, according to popular TV show, A Place In The Sun.
Research carried out by the makers of the hit Channel 4 programme, revealed property buyers would make the biggest profit if they bought in Romania, over and above any other European country.
A Place In The Sun ranked all EU countries, plus four that have applied to join – Bulgaria, Croatia, Romania and Turkey.
The research took into account economic growth, property price rises and potential rental income.
The average price for property in Romania is £17,000 and a £100,000 investment could be worth £514,000 in 10 years, according to the programme makers.
Although Romania is not hugely profitable from a rental income perspective, because the summer season only lasts four months, it still comes out on top as the place to invest, largely because of its recent, excellent economic performance, the country’s infrastructure improvements and low cost of property.
The top five with percentage return included Romania, 414%; Poland, 393; Portugal, 360; the Baltic states, 356 and Sweden, 352.
The remaining top 10 are made up of Belgium, 340%; Slovakia, 326; Slovenia, 278; Finland, 273 and Hungary, 269.
Making up the rest of the top 20 are Luxembourg, 263%; Germany, 261; Czech Republic, 260; Ireland, 222; Austria, 211; Netherlands, 208; France, 201; Italy, 199; Spain, 189 and Cyprus, 188.
Hot spots to keep an eye on are Portugal and the Algarve, says Garvetur Properties.
The real estate specialists for investments all over the Algarve claim the next few years will reveal a boom in the property market.
THE Culture Ministry’s interpretation of 2005 tourism figures for Bulgaria is that the industry is doing well in spite of problems such as “construction tourism” and damage caused by last year’s floods.
According to figures released in the past week, international tourism contributed a million euro to the country’s current account. This is an encouraging note in the light of the concerns about Bulgaria’s widening current account gap (see story elsewhere on this page).
In the first 11 months of 2005, the number of foreign tourists visiting Bulgaria increased by 5.09 per cent. A total of 4 585 875 foreigners visited Bulgaria between January and November 2005.
The Culture Ministry said that most tourists visiting Bulgaria came from elsewhere in Europe.
Bulgaria had considerably increased its share of the market in the UK, Russia, the Scandinavian countries, Turkey, Central Europe and the US, the ministry said.
The number of tourists from long-standing EU member countries increased by 5.94 per cent and those from new EU members by 7.23 per cent. Overall, there was an 6.15 per cent increase in visitors from EU countries, according to the ministry.
With these encouraging figures in mind, seven Bulgarian tourist companies and representatives of the municipality of Smolyan are taking part in the Vakantiebeurs tourism fair in Utrecht in the Netherlands. The fair is a major event on the international tourism industry calendar, and in 2005 attracted 176 000 visitors. Expectations are that this year’s fair would draw more than 250 000 visitors, including 30 000 representatives of the tourism industry.
According to a State Tourism Agency media statement about the Bulgarians’ participation in Vakantiebeurs, hopes were to attract Dutch tour operators to include Bulgaria in their catalogues, as well as to achieve sales among the general public.
Meanwhile, the State Tourism Agency had some troubles of its own, going by an agency statement on January 13.
The agency lacked a chairperson in charge of signing categorisation orders for Bulgaria’s hotels and restaurants.
This was delaying the process, and could cause problems for hotels and restaurants. Some, however, were operating without the categorisation certificates required by law, and hotels were going ahead with signing contracts with international tour operators.
According to the agency, more than 330 Bulgarian hotels and restaurants had submitted documents applying for categorisation and were awaiting finality. About 130 of these had not yet been inspected, while the remaining 200 were awaiting a decision on their category.
Prices of residential apartments in Sofia have reached the record-high BGN 1285,2 per square meter in the last quarter of 2005, data of the National Statistical Institute shows.
The rise in apartment prices countrywide over the last year is 36,6 %, the National Statistical Institute says.
Since the beginning of October till the end of the year prices of Sofia apartments marked an increase of BGN 28,4 per square meter. Prices levels, achieved in the residential market in Sofia, remained the highest in the country.
The average price levels of apartments on the middle market in Sofia stood at BGN 1222,4 per square meter in 2005. This marks an increase of over BGN 205 per square meter as compared to 2004 levels, when they reached BGN 1017,1.
Last year data confirms the trends so far – the capital Sofia, Varna and Burgas along the Black Sea see the most brisk demand and prices exceed BGN 1000 per square meter.
A new report has placed Bulgaria in the top three countries for expected growth in 2006, reported news.assetz.co.uk. The site is managed by a group of property investment companies delivering selected UK and overseas property and investment solutions.
“Basing its league table on the number of searches on its website, cheapflights.co.uk found that there had been a 50 per cent increase in interest in Bulgaria, with both holiday makers and prospective property investors all eager to learn more about the country.”
The article points out that in recent years, property investment in Bulgaria has become increasingly common as individuals and businesses alike have looked to make the most of a rapidly improving economy and a burgeoning tourist industry.
“Many experts have suggested that Bulgaria’s accession to the EU would be the final factor in opening the floodgates to a property boom similar to that enjoyed by Spain during the last 25 years.”
The article points out tourism as yet another factor to instigate a general rise in house prices in Sofia and beyond and it is this basic assumption that has led many UK residents to invest already in the still remarkably cheap property around the capital.
“Ski resorts including Borovets and Bansko have also proved popular as many investors look to capitalise on the fact that houses can be acquired at a much cheaper price than corresponding property in France.”
The country is also witnessing a sharp rise in the number of commercial property projects in Sofia as worldwide businesses look for a base in Eastern Europe, news.assetz.co.uk adds.
Norwegian budget airline Air Shuttle will launch flights to Bulgaria’s Black Sea in May this year.
The airline will service the flights on Saturdays during the high summer season from the Black Sea airports of Varna and Burgas to the Norwegian capital, Oslo. The ticket price during this period is set at EUR 74, airport fees included.
In August ticket prices to Oslo will range from EUR 74-99, while the return ticket will vary between EUR 94 and 185, airport fees included.
Norwegian Air Shuttle AS is a low-fare, point-to-point airline, registered on the Oslo Stock Exchange. It operates a total of 55 routes – nine domestic and 46 international routes from different cities in Norway to European cities. Norwegian has 14 aircraft of Boeing 737-300 with 148 seats.
People wanting optimum returns on property investments abroad should look at Romania, a TV programme aired by Channel 4 told the viewers.
House prices in the country are expected to go up four-fold in the next 10 years as Romania enters the EU in 2007 and its economy gains strength, the programme, A Place In The Sun, said, based on research work. The show ranked the country as No 1 in Europe in terms of property investment returns.
A house in Romania costs on an average 17,000 pounds. The show said 100,000 pounds invested now will be worth 514,000 pounds in 10 years. Investors should do well to buy property before the country’s entry into the EU.
Poland comes at No 2 as its economy is expected to benefit from the increased investments made by foreign firms. A 100,000-pound investment will give back 493,000 pounds in 10 years.
At the third place is Portugal, which can return 460,000 pounds in 2016 on an investment of 100,000 pounds now.
The Baltic states of Latvia, Lithuania and Estonia are at the fourth place, followed by Sweden and Belgium.
The other countries on the top of the list are Slovakia, Slovenia, Finland and Hungary.
The list was compiled on economic data from PricewaterhouseCoopers looking at how quickly the economy in each country is expected to grow and how much will be the rental returns.
FORGET the 2012 London Olympics. If you want to cash in on the excitement surrounding the world’s biggest sporting event, take a look at Beijing.
Bizarre as it sounds, investment firms are targeting UK investors with buy-to-let schemes in the Chinese capital as it gears up for the 2008 Olympics.
Understandably, many people are nervous about investing in property in the capital city of a communist state 5,000 miles away. So, to sweeten the pill, developers are offering to guarantee rents. Key Universal, a UK investment firm, is marketing apartments in Beijing, starting at £118,000, with a guaranteed 5% rental return for the first 10 years.
During that time a subsidiary of the Hong Kong-based developer Hopson will take responsibility for maintaining the fully furnished flats and finding suitable tenants. Even if it can’t find tenants, it will still pay the guaranteed rent, which should be just enough to cover the mortgage payments. If it works, investors should then be able to benefit from rising house prices.
Over the past few years Beijing’s property market has been booming. Residential house prices rose 20% in 2005, according to the Beijing Municipal Construction Committee. Prices were 29% higher in 2004.
Although some analysts believe house prices will slow, Key Universal thinks values could rise by 34%-80% over the next three to five years.
Patrick Phipps at Key Universal said: “The combination of the 2008 Olympics, interest from foreign investors and a burgeoning rental market should see the trend continuing.”
For all but the most adventurous investor, buying a Chinese property is likely to prove too much of a step into the unknown. A quick glance at Key Universal’s prospectus reveals a number of complications. These include various property taxes, such as a 5% tax on rental income, and the need to take a Chinese name — footballer David Beckham is known as Bei Ke Han Mu in China.
Even though you can sell your flat at any time, transferring the funds out of the country can take up to three weeks and can only be done using officially licensed banks.
There are also question marks over legal ownership. Under existing laws the Chinese government could claim the land back. That is why most buy-to-let investors still prefer to sink their money into property nearer home.
Deciding where to invest overseas is a question of weighing up the potential for growth and rental income against the risks and costs. On that basis, which markets offer a better deal? “Latvia is amazing us,” said Paul Willcox of Someplace Else, a property-investment company. “You can borrow up to 90% of the value of a property, which is very favourable for investors. There are no problems for foreigners who want to buy and it is a full EU member.”
Latvian property prices have been rising by between 15% and 20% a year, and Willcox expects more of the same this year. Rental yields are about 6%.
Paul Owen, chief executive of the Association of International Property Professionals, a trade body, highlights eastern Europe, but only if you buy in the right places.
“City lets in eastern Europe aimed at the local rental market look attractive and returns look sustainable. Prague and Warsaw are both interesting,” he said. Prices in Prague rose about 15% last year, rental yields average about 5% and mortgage rates start at just over 3%.
Other commentators are tipping southern Cyprus as a hotspot for 2006.
Key Universal isn’t the only investment company to use guaranteed rents to tempt investors. They are becoming an increasingly common feature of overseas deals, especially in emerging property markets where it takes more courage to invest.
Flats in the Bulgarian Black Sea resorts guarantee rents of 8%-15% for two to five years. Buy-to-lets in the more established Dubai economy promise 8% for three years.
Developers argue that the guarantees provide a safety net. But property commentators warn investors not to be taken in by what may be simply a clever marketing tool.
While the promised rents look attractive, they may bear no relation to what you will be able to charge when the guaranteed period ends. Stephen Ludlow, director of estate agent Ludlow Thompson, points to a scheme in Turkey offering a 40% return for two years. “If there is no rental demand, investors could see their yield fall off a cliff once the guarantee runs out,” he said.
Beware of guarantees being used to shift property that otherwise wouldn’t sell.
In some cases, said Ludlow, overseas developers are leaving guaranteed rental properties unlet or letting them out at a fraction of the promised return.
Developers don’t mind because they have already added the cost of the guaranteed rent into the price at which they sold the property. But investors will get a shock when they try to rent it out or sell it and discover it is not worth what they hoped.
The guarantee is only as good as the organisation offering it, warns Mike Boles at Savills Private Finance, an adviser. “Ideally the deal should be underwritten by a bank,” he said. “If the developer guaranteeing it goes out of business the promise is useless.”
Most schemes are not well regulated, so you would have no redress if they collapsed, and there may be onerous terms buried in the small print. Arlette Adler of the Federation of Overseas Property Developers, Agents and Consultants, a trade body, said: “Always check the small print for hidden clauses that enable the developer not to pay the rental guarantee.”
The Times
New rules allowing British investors to include commercial property funds in their tax-efficient savings schemes are expected to provide the funds with an estimated 4 to 12 billion-pound boost this year, a gusher that could well spill over into new real estate developments on markets like Bulgaria’s.
The rule change, announced by Chancellor Gordon Brown in his pre-Budget Report and introduced on 27 December, allows property funds to be included in Individual Savings Accounts (ISAs), Personal Equity Plans (PEPs) and Child Trust Funds (CTFs) for the first time.
Some 82 bln pounds are currently invested in ISAs and PEPs, news agency Reuters quoted experts as saying Thursday. Independent financial advisers were recommending that between 5 and 15% of typical investors’ total holdings, excluding their own property, should be in property, said Reuters.
The new legislation is an incentive to diversify savings portfolios with investment in funds developing retail, office, warehousing, industrial and other income-yielding properties.
The move will spike the interest of British funds in the Bulgarian property market for as long as they connect with the necessary incentives, said Roger Hornett from Development Capital Management. The company manages Black Sea Property Fund which is investing in Bulgaria. If Bulgaria’s 2007 EU accession is rubber-stamped this spring, that would give a further impetus to incoming investment while making it less risky, he said