Scholarly record
INVESTMENT ATTRACTIVENESS OF THE INDUSTRIAL REAL ESTATE MARKET IN BULGARIA: FINANCIAL ANALYSIS AND ROI MODEL IN THE CONTEXT OF CEE
Abstract
This report represents an attempt to examine the investment attractiveness of the industrial real estate market in Bulgaria. To achieve this, financial analysis was used and an original ROI model was constructed. This allows comparing and positioning the country to the leading markets in Central and Eastern Europe (CEE) - Poland, the Czech Republic, and Romania. The study is based on verified secondary empirical data from Cushman & Wakefield/Forton, Colliers, and JLL, using published market indicators for Q4 2024 and Q4 2025 and adding contextual data from the NSI, the BNB, and Eurostat. The report has three primary contributions: (1) a systematic overview of the current state and dynamics of the market based on the latest published secondary data; (2) development of a deterministic ROI model for a hypothetical investment in a Class A logistics building (10 000 m2), validated by comparing results for two consecutive periods; and (3) a tri-variate scenario analysis (pessimistic/base/optimistic) that places the model in the context of the structural change associated with Bulgaria’s accession to the Eurozone on January 1, 2026. Empirical findings indicate that the Sofia market is characterized by exceptionally high occupancy, overall growth in rental rates (following a temporary decline in mid-2024), and a compression in yields, which creates an attractive risk-return profile for institutional and private investors. The validated ROI model shows a leveraged current return of 8.75% and an indicative five-year IRR of 13-15%. Furthermore, the report also examines sustainable development by analysing the role of energy efficiency and ESG certification in the pricing of industrial assets, and provides a practical analytical framework for informed investment decisions within the context of the regional sustainable economic development.
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