Office trends Q1 2026 by C&W Forton
NEW CURRENCY, NEW WINS, AND HEADWINDS
The first quarter of 2026 in Bulgaria started with uncertainty and ended with a solid achievement, more uncertainty, and an opportunity.
Literally, from day one, the economy faced a big challenge – the introduction of the euro. At the time of reporting, four months later, it appears that all the institutions and business entities passed the test with flying colours. Moreover, in this period, Bulgaria’s economy performed quite well. Inflation slowed down, retail volume increased, as did output in services and construction.
The quarterly numbers could have been even better if it weren’t for external factors. The sudden war in the Middle East delivered a shock to the global energy markets and had an immediate effect on Bulgaria’s open economy. Domestic prices of fuel increased in double-digits already in March, causing fears of high inflation among consumers still adjusting to a new currency.
On a positive note, the economic success in Q1 2026 was followed by a watershed Parliamentary election in April. Early assessments suggest that the country has an opportunity to implement anti-corruption reforms and substantially improve its business environment and investment profile.
SUBDUED DEMAND
In Q1 2026, the general mood in Sofia’s office market was subdued. Roughly half of the building owners participating in our flash survey said they felt enquiries from prospective tenants were fewer than in Q4 2025, and a further 30% of the respondents noted that enquiries were about the same.
Actual leasing data confirmed these perceptions. Gross take-up stood at 43,200 sq m, down 4.9% q/q and down 15.9% y/y. Lack of clarity on social and pension insurance rates, general economic policy, the introduction of the euro and its impact on inflation, and the unexpected war in the Middle East all contributed to rising unease among business leaders, prompting some to delay office decisions for the time being.
Leasing activity was highest in the Suburbs. Some 24,000 sqm were contracted mostly in office buildings along Sofia’s ring road, in or around Business Park Sofia. Main Road came second with about 14,000 sqm contracted, followed by the Broad Centre and CBD areas with a combined 5,400 sqm. The contracted space was split between IT firms (65%), administrative and support entities (9%), health care firms (7%), wholesale players (5%) and others (15%).
Read the full report here.
