• Under the Law on REIT adopted in Bulgaria in 2003, REITs are public companies which are being financed at the stock exchange and which invest in real estate, agriculture land or receivables.
  • The return on investment in REITs has two components: return on capital gain and return on dividends. The return on capital gain is made by the increase of the share price of a REIT, linked to the increase of the price of the real estate in its portfolio. Return on dividends – under the Law, REITs are obliged to distribute 90% of their profit to their shareholders.
  • REITs provide potential investors with the opportunity to invest indirectly in real estate. The investment in REIT has a comparatively high liquidity and a good return on investment on a long term basis. REITs give investors the opportunity to get a share of a well diversified and well structured portfolio by investing very little money. That leads to a better return on investment – the price of a single apartment may fall down, whereas a decrease in the prices of all types of properties in the portfolio of a REIT (commercial property, vocational and residential properties, industrial properties) at the same time is very unlikely. In addition, owning a given property requires additional time, care and resources – for its maintenance and management, the finding of tenants or buyers, the hiring of real estate consultants, etc.
  • REITs shares right now are undervalued – currently, the shares of nearly all REITs are being traded at a considerably lower price than that of the asset value which makes those shares very attractive to potential investors
  • You could start making profit by investing in a REIT a little as EUR 100
  • REITs provide a better safety fro your investment – they are governed by the local Law
  • REITs have a better liquidity – the shares in them are being traded at the Sofia Stock Exchange
  • Tax benefits – REITs are not subject to corporate income tax.
  • Credit benefits – REITS could issue bonds and have an access to credit in no time
  • Foreign and local shareholders enjoy equal rights with REITs. There is a 7% dividend tax on withdrawing one’s investment. Investors from countries which Bulgaria has tax agreements with enjoy certain preferences. EU investors that have over 20% share of a Bulgarian company and have kept that investment for at least a year, could be exempt from the 7% tax on the dividend on withdrawing their investment
  • The real estate market in Bulgaria may keep its growth potential despite of the world’s economic downturn. On the one hand, there is a “sobering up” of the real estate prices but not as turbulent as in the developed economies. On the other hand, the market has become increasingly segmented. A steady growth of the prices of real estate could be expected on a long-term basis because of the specifics of the Bulgarian economy – the prices of properties have started to go up from a very low base and there is a great need of modern, state-of-the art properties.