A STAR IN THE EAST?

The global economy may be heading for even more difficult times, yet financial experts anticipate positive developments in Eastern Europe's property market. The idea that bricks and mortar is a safe bet may not hold true for some in the short term, as the property market across Western Europe is currently in decline. The big real-estate/investment fairs are either not happening, or are no longer bullish and while there remain speculators who believe that we are close to the bottom of the market (and therefore they consider that this is a time of opportunity) the lack of credit and the possibility of further drops in value have led to a very depressed market.

While the markets of Spain, Ireland and the UK are particularly despondent, some believe that Central and Eastern Europe (CEE) still have lots of life left in them. As an example, the UK based investment company "Property Secrets" believes that shrewd buyers can still find profits in certain CEE countries, most notably Bulgaria, Poland and Romania. "They're feeling the effects of the credit crunch as well," says Tim Crighton, marketing director of Property Secrets, "But their mortgage debt is low, so they aren't so exposed. Also their economies are still rising; Poland and Romania expect to grow by about 5%-6% GDP next year while the UK is down to about 1%" Additionally, in some parts of these countries, property prices are still rising.

Expanding industrial centres mean that some of the secondary population centres still have growth potential, particularly: Cluj-Napoca, Iasi and Constanta in Romania, Plovdiv and Varna in Bulgaria, and Lodz, Wroclaw and Poznan in Poland. "Don’t forget Sofia itself," adds Crighton "Of all the capital cities the Bulgarian capital is the least developed. You can get a studio there for about 70-80k euro and we're expecting to see real capital growth in the next year or two." Sofia is confident partly due to a new wave of investment; both Spanish and Israeli developers have started building mixed-use complexes in the Bulgarian capital. While some local developers have set a limit on apartments that can be bought by non-owner occupiers, this restriction could help to prevent a bubble economy in the city. The knock on effect for areas outside the capital, including nearby mountain resorts, should be continued capital growth. It’s true that some of the cities in Poland and Romania have become far more expensive in recent years. "Warsaw and Krakow, have grown astonishingly in price in the last 5 years and the entry level is now about 150-200k euro," adds Crighton. These price hikes have put some investors off and some commentators don’t think that Poland is a particular good bet at the moment.

"The knock on effect for areas outside the capital, including nearby mountain resorts, should be continued capital growth..."

For those who have already invested, few believe that the Black Sea beach resorts of Bulgaria, once the great hope of the CEE, hold out much promise. "Some Bulgarian resorts are still expanding," says Judi Williams, marketing manager of property investment company, Property Frontiers. "But now the gains are probably to be made in the Bulgarian cities serving the rental market, rather than holiday lets." So beware the "Black Sea bubble", but don’t write off Bulgarian leisure entirely, as it may yet turnaround. Increased local prosperity might revive the coast by way of regional tourism and the potential for the Euro replacing the Lev in 2010 will also help.

Global events have shown that investors should currently expect steady growth rather than soaring dividends. "We think that the CEE market will grow at 10-15% per year rather than breakneck speeds such as 30%," says Crighton, adding that investors should be looking at 10 year rather than 2 year turnarounds on their investments.

If you are considering an investment with good capital growth potential, or would simply like the pleasure of owning your own apartment at credit-crunch-busting prices, then Bulgaria could be just what your heart and your head has been looking for.

Source: Taken in part from an original article written by Oliver Bennett

(Note: Viewing trip prices are dependent upon flight costs. Zelnik Properties reserve the right to change prices without notice).

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SUPER BOROVETS GOES GREEN

The main investor in the 500 million Euro Super Borovets ski resort is to apply for an EMAS (Eco-Management and Audit Scheme) certificate, which guarantees that all work, products and services will be carried out according to the highest European ecological standards. The planned construction, for instance, includes construction that will be "revolutionary" for Bulgaria, such as "passive buildings" or buildings powered by green infrastructure.

Electricity production will come from recycled resources and there will be an advanced system for waste management.

The Eco-Management and Audit Scheme is an EU voluntary instrument, which acknowledges organisations that improve their environmental performance on a continuous basis. The system has been active since 2001.

EMAS-registered organisations are legally compliant, run an environmental management system and report on their environmental performance through the publication of an independently verified environmental statement. They are recognised by the EMAS logo, which guarantees the reliability of the information provided.

According to the investors, the decision for the new development for the ski resort will make it a very popular destination and it will increase its value drastically. Additionally, every existing hotel is going to be upgraded so that it receives "Eco marking". This label is in accordance to strict criteria mainly in regard to heat and water management, among other factors.

"We hope to create a positive image for Super Borovets so that people will be assured that we will develop the tourist facilities and services in such ways that the environment will not be harmed," said Julia Arabadzhieva, the director of the project.