Real Estate Financing Standing its ground in a challenging environment St. Peterbourg, 14-15 May 2009 Anna V. Ivanova Eurobank EFG Bulgaria Real Estate Financing Standing its ground in a challenging environment Anna V. Ivanova Eurobank EFG Bulgaria St. Petersburg, 14-15 May 2009
Real Estate Financing Standing its ground in a challenging environment. Real Estate Financing Standing its ground in a challenging environment. Anna V. Ivanova Eurobank EFG Bulgaria. POSTBANK March 2007. Anna V. Ivanova Eurobank EFG Bulgaria. St. Peterbourg, 14-15 May 2009. - PowerPoint PPT Presentation
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Real Estate FinancingStanding its ground in a challenging environment
St. Peterbourg, 14-15 May 2009
Anna V. IvanovaEurobank EFG Bulgaria
Real Estate FinancingStanding its ground in a challenging environment
Anna V. IvanovaEurobank EFG Bulgaria
St. Petersburg, 14-15 May 2009
Page 2
Global Markets InstabilityGlobal Markets Instability and Risks and Risks
Significant degree of uncertainty in commercial real estate markets
Increased volatility of prices & values expected whilst the market absorbs various issues and reaches its conclusions
Lack of liquidity in the capital markets
Page 3
Property Market Structure & Trends in BulgariaProperty Market Structure & Trends in Bulgaria
Privatization process practically completed
Interests turning to RE investment
Bulgaria has recently joined the E.U. as a full member
Stable macroeconomic environment
Bulgarian property market immature
Currency board in place
Increased confidence
Further reinforces demand for prime location property
Inflation slowing down (to 4.9% YoY at the end of Q1 ‘09)
Significant CAD improvement (by 55% YOY in the end of Feb ’09)
Stable public finances (3% planned budget surplus)
Inflow of FDIs(Traditional focus on RE and construction; in 2008 they amounted up to 40% of the total FDIs)
Although the credit crunch undoubtedly affected the banking and RE sectors, its impact tend to be much softer than in other SEE countries due to:
GDP Real Growth
6.6%
6.0%6.2%6.2% 6.3%
4.0%
5.0%
6.0%
7.0%
2004 2005 2006 2007 2008
Page 5
Latest RE market challenges in BulgariaLatest RE market challenges in Bulgaria
Approximately 15 projects for shopping centers and retail parks have been postponed throughout the country, mainly due to lack of debt financing;
Rental levels on the high street of major Bulgarian cities have decreased by 5-15%;
The vacancy levels of shopping centers in some secondary cities is still relatively high;
Many planned office projects have been put on-hold while others have been frozen during the rough construction process;
The overall vacancy rate for office space continued to increase;
Residential properties market slowed down and prices went down;
The financial crises will have a sobering effect on the RE market reducing The financial crises will have a sobering effect on the RE market reducing the number of projects that are developed, as well as pressuring the market:the number of projects that are developed, as well as pressuring the market: