Selling Military Property

Bulgaria's Defence Minister Nikolai Tsonev has announced that the ministry would start implementing its new policy on divesting assets by selling in September 243 items of military real estate it no longer needs.The properties are part of a total 713 lots that are surplus to requirements, considering the current needs of the Bulgarian military, and would gradually be sold. They comprise a total area of 10 300ha and 11 000 buildings in bad condition. The revenue from the mass sale will be used to buy new apartments for the ministry's housing fund and to modernise the Bulgarian military so that it can live up to the standards of its Western allies, as well as meet its commitments to Nato and the European Union, Defence Ministry officials told an August 13 news conference, at which the ministry announced its new property plans.The 243 properties to be put on the market at the beginning of the autumn vary in type and location. According to the official list posted on the ministry's website, there are vacant plots, shops, depots along with buildings that used to have various other functions, such as military clubs, restaurants, mess halls and hotels, among others. Most of the properties are in Sofia and the Sofia region, but there are others all over Bulgaria - in Plovdiv, Bourgas, Varna, Stara Zagora, Veliko Turnovo and Blagoevgrad.The ministry's plan envisages three options for the future of the properties. Some will be sold, and others will see the Defence Ministry retain ownership, but give out the right to build housing on them in exchange for getting some of the apartments in those buildings. This will happen to the properties with the best locations, primarily those in big cities. There is also the possibility that the ministry will build housing of its own on some of the properties. A special commission at the ministry will decide what to do with every property and there will be a tender called for each plot."As far as I know, the most attractive pieces of property owned by the ministry have already been sold," Anton Boukov, manager of the sales department with the Sofia office of Foros real estate, told The Sofia Echo. Smaller properties, of up to 0.5ha, will be the easiest to sell as most companies on the market do not have the funds for bigger investments. "The big plots require big investors," Boukov said. He said that a square metre of land in the municipality of Bozhourishte in the Sofia region, which is very suitable for warehouses and logistic centres, can cost up to 30 euro, but the price can be higher depending on the location and the specifics of the property. The ministry's plans for handing out the right to build on those properties of which it will retain ownership can be profitable as long as the housing projects are big and are in good locations, which would allow getting good prices for housing, he said. This way, entrepreneurs would be able to make a profit in spite of the rising costs of construction and the fact that they would build a whole building but be able to sell only part of it, Boukov said.According to Tanya Tasheva, project manager at Arco Real Estate, the plots and warehouses will be most attractive to investors and easiest to develop in the future. "There is a shortage of logistic property on the market," Tasheva told The Sofia Echo, adding that well-placed warehouse were always the easiest ones to sell. "Bulgarian and foreign investors have a high opinion of the model in which they have the right to build on plots that they do not own, since they go into the project with less initial capital, which is always a plus," she said, emphasising that location was crucial for the profitability of such projects.Defence Ministry officials told reporters that their aim was to achieve full transparency of the deals with military real estate. On his appointment in late April as part of the Cabinet reshuffle, minister Tsonev imposed a moratorium on all deals with military property and ordered investigations into previous deals. The investigations found, as described by the minister himself, "shocking" cases of misuse.