Credit Crunch Property Funds Grappling With Tight Funding

Bulgarian property funds developing or prepping to start projects are facing financial difficulties, market representatives told Dnevnik. The global economic doldrum has dampened demand and frozen prices on the property market, where some segments are even seeing downward price revisions.The next six months would be hard for real estate investment trusts (REITs) that are yet to raise funding, executive director of Intercapital Markets, the consultant of Intercapital Property Development, Nicolay Mayster said.REITs are facing tighter access to both equity and bond capital, said Yassen Ivanov, portfolio manager of DSK Asset Management, which manages mutual fund DSK Properties.The bulk of Bulgaria's listed property funds have not given up current projects, most of them started at least a year ago, but few are daring to start fresh projects.The worsening global market conditions have pulled foreign investors out of Bulgarian properties and into undervalued assets in other parts of Europe, according to FairPlay Properties investment manager Raycho Dyankov.The consensus among analysts, however, is that the property market crisis has a silver lining. The crisis will sift out experienced companies with good management and investments, said Ivanov.