REITs Annually 2022
SECTOR NEWS (2022): INDUSTRIAL SPACE CONTINUES TO BOOM, WHILE OFFICE AND RETAIL SPACE SHOW SIGNS OF SLOW POST-PANDEMIC RECOVERY Office space market yields remained flat at 7.5%, while vacancy rates fell 0.8 p.p. YoY to 16.0% as suppressed supply and slowly recovering demand weighed on the market balance. Rents advanced slightly to EUR 15.5/sq.m. (+3.3% YoY)
Retail space market yields remained flat at 7.5%. The retail park segment was booming, while prime rents in shopping centres advanced slightly to EUR 35/sq.m. (+2.9% YoY) but their vacancy rate added 0.6 p.p. to 5.6% in 2022
Industrial RE market benefited from the growth in e-commerce. Supply was not able to keep up with the strong demand as vacancy rates hit record low of 0.56%, while rent levels in large-sized units advanced to EUR 4.75/sq.m (+10.5% YoY). Yields were flat 7.5%.
Agricultural land market in Bulgaria rebounded 14.4% YoY in 2021 flowing a dry 2020 season. Rents jumped 20.0% YoY to BGN 54/daa in 2021. While NSI is yet to release 2022 data, we expect double digit growth in both land and rents, due to elevated grains prices as a result of the conflict in Ukraine.
Advance Terrafund [ATER] sold directly 78.2% less land YoY, but achieved significant increase of premium over book value on higher grain prices and inflation fears. We expect DPS in the range of BGN 0.20-0.25 in 2023.
Bulgarian Real Estate Fund [BREF] sold its Mr. Bricolage property in Varna for BGN 13.2m. Despite this, rental income was slightly up YoY on income from Synergy Tower. Expected annual DPS of BGN 0.1134.
Elana Agrocredit [EAC] registered 78.0% YoY drop in financed leases to BGN 11.8m. Conservative expectation of dividend payout during 2023 of BGN 0.0699 per share.
Bravo Property Fund [BPF] lost a tenant in Q4’22, bringing occupancy to 66%, compared to 84.3% in the beginning of the year
Sopharma Properties [SFI] – the majority owner – Sopharma extended a mandatory tender offer at BGN 8.20, which was accepted by 24 shareholders (2.14% stake). Expected annual DPS for 2022 of BGN 0.1558.
First Financial Brokerage House (FFBH) is a leading non-banking financial institution on the Bulgarian capital market. Founded in 1991, FFBH offers the complete spectrum of investment banking services spanning corporate finance, privatisation advisory, mergers and acquisitions, financial consulting, brokerage services, research & analysis and asset management.
FFBH provides its services mainly to major international banks and corporations seeking investment in Bulgaria. FFBH is not only local contractor and partner to its clients but also an information source and provider for all major news and events in the economic and political life of the country.
We are the main contact point for the large majority of foreign and local institutional investors in the Bulgarian equity market. FFBH is providing access to the Bulgarian Stock Exchange by either its highly experienced sales trading desk or by order routing across the Bloomberg network.
Additionally, FFBH is offering a range of tools, specifically tailored for the retail investor. Both domestic and international markets are only a click away, via electronic trading solutions. As a major advantage, our customers are able to benefit from the broad range of Analysis & Research products with premium quality, provided by our team of dedicated analysts.
Clients of our research products are most of the largest foreign and local institutional investors looking for opportunities in Bulgaria. More than 100 investment banks, investment funds and other institutional investors use our Equity research and Economic review on a regular basis. FFBH’s Morning Bulletin and Weekly Bulletin reach more than 300 clients over different countries and continents.
Our major Research and Analysis Services include:
- Semi-Annual Outlook of the Bulgarian economy and the domestic capital markets;
- Equity analyses of the biggest and/or most liquid companies listed on Bulgarian Stock Exchange - Sofia;
- Quarterly Bulgarian Real Estate sector and REITs overview;
- Quarterly Bulgarian Banking System overview;
- Quarterly macroeconomic overeview, with details on the major economic sectors, commentaries, and statistical indicators;
- Daily and Weekly bulletins, including an overview of the capital markets and the most important macroeconomic & corporate events.
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