Investing In Commercial Real Estate In Bulgaria: Opportunities

Published on October 1, 2025 and written by Cyril Jarnias

Bulgaria, a European Union member since 2007, offers increasingly attractive commercial real estate investment potential. With a steadily growing economy and an expanding real estate market, this Eastern European country is drawing more attention from international investors. In this article, we will explore commercial real estate investment opportunities in Bulgaria, examining available property types, profitability and associated risks, as well as current sector trends.

A Range of Commercial Properties for Every Taste

The Bulgarian commercial real estate market offers various options for investors, ranging from modern office spaces to bustling shopping centers. Here’s an overview of the main types of available commercial properties:

Class A Offices: Demand for high-quality office spaces is rising, particularly in major cities like Sofia and Plovdiv. These properties attract international companies and growing technology startups.

Shopping Centers: With increasing purchasing power among Bulgarian consumers, shopping centers are becoming increasingly popular investments. Modern complexes offering complete shopping and entertainment experiences are particularly sought after.

Warehouses and Logistics Spaces: E-commerce development and Bulgaria’s strategic position as a gateway to Eastern Europe are driving demand for state-of-the-art logistics facilities.

Hotels and Tourism Properties: Bulgaria’s thriving tourism sector, for both beach destinations and ski resorts, offers investment opportunities in hotel properties and vacation complexes.

• Coworking Spaces: With the rise of remote work and flexible companies, coworking spaces are gaining popularity, particularly in Sofia and other major cities.
• Retail Properties: Downtown shopping streets and suburban retail parks offer diverse investment opportunities.

Attractive Profitability and Risk Management

Commercial real estate in Bulgaria presents interesting profitability potential, but like any investment, it also carries risks to consider.

Competitive Rental Yields: Commercial properties in Bulgaria generally offer higher rental yields than many Western European countries. According to recent data, yields for Class A offices in Sofia can reach 7.5%, while shopping centers can offer yields up to 8%[1][2].

Capital Appreciation Potential: With a real estate market still in the maturation phase, there’s potential for long-term capital appreciation, particularly in developing areas and secondary cities.

Risks to Consider: – Economic Fluctuations: Although the Bulgarian economy has shown stable growth in recent years, it remains sensitive to global economic trends. – Evolving Regulatory Framework: Investors must stay informed about changes in laws and regulations affecting commercial real estate. – Market Liquidity: The commercial real estate market in Bulgaria may be less liquid than in more established markets, which could affect exit strategies.

Risk Management Strategies: – Portfolio Diversification: Investing in different property types and multiple cities can help spread risks. – Thorough Due Diligence: Detailed analysis of the local market, property, and legal aspects is crucial before any investment. – Partnership with Local Experts: Collaborating with local real estate professionals and legal advisors can help navigate the complexities of the Bulgarian market.

Emerging Trends Shaping the Sector’s Future

The commercial real estate market in Bulgaria is rapidly evolving, influenced by local and global trends. Here are the main trends to watch:

Technology Sector Boom: Bulgaria is positioning itself as an emerging technology hub in Eastern Europe, attracting tech companies and startups. This trend is driving demand for modern and flexible office spaces, particularly in Sofia.

Sustainable Development: Growing awareness of environmental issues is pushing developers to create more eco-friendly buildings. Properties certified LEED or BREEAM are gaining popularity among tenants and investors.

Retail Transformation: Faced with the rise of e-commerce, shopping centers are evolving into experiential destinations, integrating entertainment, dining, and community spaces to attract consumers.

Health and Wellness Tourism Growth: Bulgaria is becoming a sought-after destination for medical and wellness tourism, creating investment opportunities in specialized properties like spa centers and clinics.

Digitalization and PropTech: Growing adoption of real estate technologies (PropTech) is transforming the management and operation of commercial properties, improving operational efficiency and occupant experience.

• Space Flexibility: Growing demand for flexible workspaces and short-term leases is influencing the design and management of commercial properties.
• Infrastructure Investments: Major infrastructure projects, such as Sofia metro expansion, are creating new opportunity zones for commercial real estate.

Key Cities for Commercial Real Estate Investment

Although Sofia remains the commercial real estate hub in Bulgaria, other cities are emerging as promising investment destinations:

Sofia: The capital concentrates the majority of commercial real estate investments, with a dynamic office market and modern shopping centers. The Business Park Sofia district and the area around Tsarigradsko Shose Boulevard are particularly popular.

Plovdiv: The country’s second-largest city, Plovdiv is attracting more investors thanks to its booming manufacturing sector and designation as European Capital of Culture in 2019. Demand for industrial and logistics spaces is increasing there.

Varna: This Black Sea coastal city offers interesting opportunities in the hotel and tourism sector. The development of technology parks is also attracting investments in high-quality offices.

Burgas: Another important coastal city, Burgas is seeing increased demand for logistics and industrial spaces, particularly due to its strategic port.

Ruse: Located on the Danube, at the border with Romania, Ruse is becoming an important logistics hub, offering opportunities in warehouses and industrial spaces.

Legal and Tax Framework for Foreign Investors

Bulgaria has established a favorable environment for foreign investors in commercial real estate, with simplified procedures and attractive tax incentives.

Property Rights: Foreigners can own buildings in Bulgaria, but land purchase is subject to certain restrictions for non-EU residents. However, these restrictions can be circumvented by creating a Bulgarian company.

Acquisition Procedure: The purchase process is relatively simple and transparent. It’s recommended to work with a local lawyer to ensure the legal compliance of the transaction.

Advantageous Taxation: – Corporate Tax: 10%, one of the lowest in the EU. – VAT: 20% standard, with exemptions for certain real estate transactions. – Property Tax: Generally between 0.1% and 0.45% of the property’s tax value, varying by municipality.

Investment Incentives: Bulgaria offers tax and financial incentives for major investment projects, including in commercial real estate, particularly in priority economic zones.

• Double Taxation Treaties: Bulgaria has signed tax conventions with many countries, offering tax benefits to foreign investors.
• Monetary Stability: The Bulgarian currency (lev) is pegged to the euro, offering monetary stability to international investors.

Winning Investment Strategies

To maximize the potential of commercial real estate in Bulgaria, investors must adopt well-thought-out strategies:

Target Growing Sectors: Focus on expanding market segments, such as Class A offices in major cities or logistics warehouses near major transport routes.

Renovation and Repositioning: Acquiring older properties in strategic locations to renovate and reposition them can offer attractive returns.

Geographic Diversification: Don’t limit yourself to Sofia. Explore opportunities in growing secondary cities like Plovdiv or Varna to benefit from lower entry prices and high growth potential.

Local Partnerships: Collaborating with local developers or asset managers can give you an advantage in terms of market knowledge and network.

Focus on Sustainability: Investing in eco-friendly properties or upgrading them to meet sustainability standards can increase their attractiveness to tenants and their long-term value.

• Tracking Technology Trends: Integrate PropTech solutions into your properties to improve operational efficiency and occupant experience.
• Clear Exit Strategy: Define your investment horizon and exit strategy from the beginning to maximize your return on investment.

Challenges and Opportunities on the Horizon

While the Bulgarian commercial real estate market offers many opportunities, it also presents challenges that investors must anticipate:

Increasing Competition: The growing appeal of the Bulgarian market is attracting more international investors, which could put upward pressure on quality asset prices.

Demographic Evolution: Bulgaria’s demographic challenge, with an aging population and continued emigration, could impact long-term demand in certain market segments.

Adaptation to New Work Norms: The trend toward remote work and flexible workspaces requires adaptation of existing office properties.

Infrastructure Development: Although significant progress has been made, some regions still require infrastructure improvements to attract investments.

Emerging Opportunities: – Property Conversion: Transforming obsolete buildings into modern spaces adapted to new market demands. – Investments in Secondary Cities: Capitalizing on economic development in cities outside Sofia. – Niche Sectors: Exploring specialized segments like student housing or data centers.

Commercial real estate in Bulgaria represents an attractive investment opportunity for investors seeking competitive returns in a growing European market. With a stable economy, advantageous tax framework, and evolving real estate market, Bulgaria offers fertile ground for diversified investments, from modern offices to logistics centers and tourism properties.

However, as with any international investment, thorough understanding of the local market, rigorous due diligence, and a well-defined strategy are essential for success. Savvy investors who can navigate the complexities of the Bulgarian market and anticipate emerging trends will be well positioned to capitalize on the opportunities offered by this dynamic market.