Greek Companies Turn to Bulgarian Real Estate

WIDELY represented in Bulgaria, Greek business has been turning to the real estate sector lately, realising the potential for investment in this field in the country.

Bulgarian Internet service provider Bitex, owned by EuroCapital Finance, in early October said it would get involved in real estate transactions and development. Thus, the company surprised analysts who might have doubted that an IT company would take on such a challenge.

Resources for the acquisition of property are being gathered by raising the company’s capital by 20 million leva through selling shares on the Bulgarian Stock Exchange – Sofia, where Bitex is traded.

EuroCapital Finance holds 87 per cent in Bitex and is taking steps to restructure the company into an investment vehicle. EuroCapital Finance itself has been active on Bulgaria’s real estate market with a property portfolio worth 10 million euro.

Bitex was registered in 1996 under the name BIT. In 2000, it was bought by US-registered Worldfast Communications Inc and renamed Bitex.com.

The strongest believer in Bitex’s future as a real estate company is Christos Mouroutis, who has been present in Bulgaria since 2000.

In 2002, he created EuroCapital Finance, where he is the controlling shareholder. With this company he succeeded in becoming the main consultant and investment manager for Greek investors in Bulgaria.

Mouroutis has managed about 100 million euro of new investment in 2004 and 2005 alone, and has created some of the most successful deals in the real-estate sector.

Today he is working in transforming the public company BITEX into a real estate investment company with about 20 million leva in new capital. He also aims to create a real-estate fund for investments in Sofia, together with other investors from Greece.

“When I came to Bulgaria and started dealing with Bitex, I already had good experience after being a major shareholder in e-Globe, a Nasdaq-listed company. The market in Bulgaria at that time, though, did not allow the investment to be deployed the way that my partners and I planned. So, it was by chance that I found myself creating new opportunities,” Mouroutis said in an interview with The Sofia Echo.

Mouroutis was the first Greek businessman to detect that property development would be a success in Bulgaria. The first project with which he was involved was the acquisition of around 150 000 sq m near Sofia Airport, by Promota Bulgaria. After acquiring the plots from more than 1100 small owners, he financed the acquisition, transformed Promota Bulgaria to a public company and organised the regulation of the new larger plot.

In May 2005, Mouroutis sold the company to the US-German company Tishman Lindner, which recently announced they would build the Sofia Airport Centre.

“The return for my investors after 26 months of efforts was more than 400 per cent on their equity, which was definitely worth it,” Mouroutis said.

Now, he is completely focused on Bitex’s plans to deal in real estate.

“The company has a business plan of acquiring high co-efficiency lands, regulating them and then giving them in contribution schemes to developers. We estimate risk close to zero, while the return in three to four years will be more than three times the equity involved. The property-investment fund is planned to entail 50 million euro and will invest in Sofia and Varna only,” Mouroutis said.

But, Bitex is not the only initiative by EuroCapital Finance and it will only add to other on-going and success-promising projects.

One of them is for building a large shopping mall on Evropa Boulevard in the western suburbs of Sofia. The company already owns 21 000 sq m there and is preparing to build around 100 000 sq m of commercial and office space. The architectural firm Chapman Taylor, together with local architects, will also be involved in the 35-40 million euro project. Another project on which EuroCapital Finance is working will be an office and hotel building near Sofia Airport.

“We can build around 30 000 sq m there and we intend to propose to Tishman-Lindner to co-operate on the site, while they develop the rest of the land with their Sofia Airport Centre,” Mouroutis said.

His confidence in the success of the many projects is backed also by other initiatives he has had in Bulgaria and by his strong belief in the country’s economic development.

“In Greece, as in many other EU countries, we have a serious problem – we can not find workers for the production facilities. Instead of using immigrant workers, many Greek producers have decided to look for relocation of their facilities. And what better place than neighbouring Bulgaria,” he said.

Mouroutis believes that in doing this, they are also helping Bulgaria to deal with the country’s unemployment problems. In 2005 alone, he and his partners have succeeded in moving five production facilities to Bulgaria, to create more than 1000 jobs.

Source: The Sofia Echo