GROWING PAINS

Over the last century Bulgaria's capital has expanded from what is now known as the "broader centre" into territories that Sofianites used to think of as "the outback". Wild expansion has swallowed up nearly all available building space for residential, office and especially logistics properties.

Recent changes in the city plan green-light the utilisation of new areas within the Sofia district. Villa zones and even whole towns are officially becoming districts of the capital. At least five industrial areas will be converted into residential space. Shrewd businessmen foresaw the property bonanza in these areas years ago and purchased acres of land in the villages around Sofia. Their gamble will soon pay off, as they are expected to reap profits of up to 10,000 percent. Investors who missed the boat shouldn't despair, however – it's not too late to explore new expansion possibilities.

Villages and villa zones between Novi Iskar and Svoge are turning into the new Bistritsa and Simeonovo – luxurious suburbs of the capital. Only they're not as expensive – for the time being. Novi Iskar used to be a separate town with a population of 23,000. The fact that it now belongs to the capital's territory does not necessarily make it a more attractive place to live, but the future looks bright. Novi Iskar is Sofia's only gateway to the attractive villages along the Iskar River gorge. In a few years' time, all the investments that are pouring into it will inevitably turn the site into a pleasant residential area. So far, prices are still low, at 600-900 euros per sq m for residential properties and 50-100 euros per sq m for building land. Some surrounding villages also have excellent developmental potential, especially Katina, where a new 18-hole golf course will soon open. Other spots attracting investors' interest include Lokorsko (60-90 euros per sq m for land and 500-600 for residential properties), Mirovyane (90-100 euros per sq m for land and 700-800 for residential properties) and Podgumer.

Bulgarians have recently discovered Rebrovo, Thompson and Vlado Trichkov – three of the most attractive spots along the Iskar- Svoge stretch. Foreigners also love them for their stunning beauty and low prices. Plots in Rebrovo and Vlado Trichkov can still be purchased for 15-35 euros per sq m, while prices for houses don't exceed 600-700 euros per sq m. For some reason, Thompson is more expensive – plots for less than 40-50 euros per sq m are hard to find. The picturesque town of Svoge marks the end of the Iskar property run and is located within commuting distance from the capital. Not surprisingly, half of Svoge's 9,000 inhabitants work in Sofia, while the other half are trying their hand at the local real estate business. Prices for land in Svoge vary from 50-100 euros per sq m, while apartments sell for 700-850 euros per sq m.

These villages may appear to be the perfect solution for those looking for a cheap home in idyllic natural surroundings close to the capital. The only problem is that commuting from Svoge to Sofia is a serious challenge. The only connection between the two cities is an extremely narrow road that meanders along the Iskar River. To navigate it safely, you need an iron-clad vestibular apparatus and excellent driving skills. For the carsick or faint of heart, the best bet is to take the train.

Sofia's southern edge no longer ends with Bankya and Ivanyane, two of the most prestigious and expensive suburbs. After prices there jumped to 300 euros per sq m for land and 2,000 euros per sq m for houses, investors moved on to less popular villages, such as Gradoman, Malo Buchino, Vitkovitsa and Klisura. Buyers there will fork out three times less cash – and the only difference from Bankya is a few kilometres' distance. An especially popular spot in the region these days is Verdikal. Formerly a deserted area, it is now officially a district of Bankya and property prices are expected to jump 100 percent in the next few years.

Like Mordor smouldering on the edge of Middle-earth, the heavy industrial zone of Kremikovtsi – named after the troubled Bulgarian steel behemoth – stretches to the northeast of Sofia. A long history of failures to bring the plant up to EU environmental standards has given the area a bad name. To make matters worse, there is a functioning uranium mine in the region. Sofia Mayor Boyko Borisov has long advocated the complete shut-down of the steelworks. Yet his "avant-garde" suggestion to re-develop the Kremikovtsi land and build a business park with a residential section did not receive a standing ovation. Enthusiastic home hunters in the region are facing the gloomy prospect of owning property in an industrial zone for the next 50 years at least.

Sofia's southeast is a pleasant but already overpriced destination. Prices in Pancharevo (150-300 euros per sq m for land and 800-1,200 for houses) are almost as high as in luxurious Simeonovo or Bistritsa. Pancharevo is famous as the home of Bulgaria's first gated community. The large artificial Pancharevo Lake attracts many Sofianites in the summer. Kokalyane (70-130 euros per sq m for land, 500-800 for houses) and Pasarel (50-70 euros per sq m for land, 400-900 for houses) are pleasant, cheaper villages in the region that are gaining popularity.

Investors have recently focused particular attention on a small town 25 km, or 15.5 miles, east of Sofia. Elin Pelin and the surrounding villages offer fast and easy highway access to Sofia, making it a convenient bedroom community. The town is expanding rapidly and a new project – The Elin Pelin Industrial Park – is about to make it even more popular. The park aims to meet Sofia's increasing needs for space and logistics properties. The ambitious, almost 60,000 sq m project, will be located near Trakia highway, yet far enough away from the residential regions of the town. Currently, prices for houses vary from 450-800 euros per sq m but the proximity of the new park will soon push them up.

The list of promising towns in the Sofia district does not end here. Head for Bozhurishte, Slivnitsa, and Kostinbrod and you will sense even more opportunities there.

Sofia is a long property story – one that is far from over. While the market within the city's broader centre has become more conservative and stable, the surrounding region is entering a growth spurt that promises the huge investment potential only a new and less predictable market can offer.