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Costs-sale price ratio does not favour projects beyond Sofia – Engel East Europe

njfgNo significant changes in prices or sale volumes in the Bulgarian real estate market have been recorded since the turn of the year. Prices will remain steady and are unlikely to increase by more than five to 10 per cent in 2008, Liron Or, Engel East Europe-Bulgaria's executive director, told investor.bg.
Property prices in the country, and particularly land and plots, have appreciated significantly. Nowadays, they account for as much as 35-50 per cent of the end sale price of enterprises developed on the pieces. This is too large a share, compared to the average of 25-40 per cent in most European countries, Liron Or explained.
In light of the global credit squeeze, which will not have a tactile impact on Bulgaria in the short-run and the latest changes in the Eastern European market, Engel East Europe has determined to centralize on the high end of the market, Or said, quoted by investor.bg.
Thus the Israeli company will unfold its competitive priorities – with regard to robust finance status and modern design, he added. Nowadays, the company is negotiating the acquisition of several plots in some of Sofia’s prime locations. Envisaged developments will be up market ones with prices exceeding 2000 euro a sq m.
Engel East Europe’s first completed project in Bulgaria was Boutique Apartments, situated in the foothills of Vitosha Mountain, offering 54 boutique apartments and maisonettes. The company has also invested 12 million euro in the building of the Vitosha Palace residential complex and another five million euro in the building of Slunchev Dom housing complex, both in Vitosha.  Last summer the company acquired a 20-acre piece in Gorna Banya – purposed for the construction of a 30 million euro gated complex offering more than 400 residential units.
On several cases, the Israeli group has told media that their interest in Bulgaria is limited mostly to the residential sector. They do not intend to pour money in holiday, industrial and commercial real estates at this point. “We are doing what we're good at,” the executive said.
When asked by investor.bg about possibilities beyond Sofia, Liron Or said that they had been observing Plovdiv and Stara Zagora markets, but did not think that current sale prices could support the required investment and resources.

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