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At AVIVA LIVING we offer fully furnished homes with 5% annual guaranteed rental yields, says Irina Kaneva, sales and marketing director of the construction and investment company BLD
- Tell us more about BLD's new Aviva Living concept and how it differs from the traditional property investment model?
- I'll start by saying that the main difference between BLD and most companies in the industry is the flexibility to offer innovative products and services to our clients.
Our thinking is outside the comfort of successful, established strategies and our focus is on market dynamics, the nuances of consumer demand and best practices happening in Europe and around the world.
Over the last few years we have successfully built on our portfolio of products and services to close the full loop for the customer. Our goal is to offer a complete solution for the purchase of a property - from project selection, location, assistance with financing, renovation and furnishing, to home management and maintenance.
The difference in this project is the added value for the client, which is not only in the guaranteed monthly rent, regardless of the circumstances, but also in the finishing and modern interior of the homes, which also make them easier to rent.
There is no standard for rental properties on the market in Sofia - every owner tries to achieve the highest possible price, but often the homes are in a miserable condition, cosmetically refreshed or finished with poor quality materials and cheap or old furniture. Often the offers with an excellent location are in old buildings, with unmaintained common areas, no parking and a number of other shortcomings that the client is willing to swallow for a home in a good area.
That is why our product is different - we have thought about the location, which is without compromise, we have thought about the beautiful interior, about the functionality, about the security, about the parking spaces, about the maintenance, about the shared spaces and about everything that will guarantee the realization of the housing on the market of short, medium and long-term rentals.
AVIVA LIVING is a fully investment product - ready to move in homes with guaranteed annual returns.
The studios and one-bedroom apartments in AVIVA LIVING are fully furnished, in close proximity to the metro, park, mall, hypermarket, hospitals, schools and within walking distance of the city centre. Designed specifically for rental - with optimized square footage and furnishings that ensure maximum living comfort and functionality.
AVIVA LIVING also has a rooftop, with fantastic views of Vitosha and the whole of Sofia - a modern furnished shared space where tenants can spend time outdoors and socialise.
- How did the idea for this investment product come about and how will BLD guarantee the rents? Doesn't the new owner have to wait before seeing a return?
- AVIVA LIVING is the logical continuation of our BLD Living concept, where our company introduced fully furnished rental homes to the market in the MONA 2 building in Manastirski Livadi-East.
Our experience in managing a building with housing for short- and medium-term rentals gave us the confidence to proceed with the next move, especially since AVIVA has an excellent location where the demand for small investment and rental housing exceeds the supply many times over.
BLD is part of the largest real estate holding company and we have access to analytics, database and trends by area from our real estate agencies Imoteka, Address, New Estates, Unique Estates, Forton, who are not only the leading names in the industry but also hold a solid share in sales and rentals in the city. So this product is designed to meet the demand of people investing in property and is based on serious market research and forecasts for the next few years.
With the purchase of a home, we enter into a two-year lease agreement with our client. The yield is 5% per annum, paid in monthly rents. That is, for two years our clients will receive from BLD rents equal to 10% of the value of the purchased apartment, without being involved in the letting process and tenant relations.
The rent is guaranteed no matter what - our clients will receive rent year round, even for the months their unit is unoccupied, and new owners don't have to wait before seeing a return because BLD begins paying monthly rents on the unit months after the transaction.
- What should people who decide to invest in AVIVA IVING think about?
- They certainly don't need to think about renovations, furnishings, viewings, finding tenants, risks of unpaid bills and rents - the BLD team has already taken care of all that.
Rather, those who have purchased apartments in AVIVA LIVING can consider whether to continue renting their property after the first two years or to live in it.
AVIVA LIVING is a product that will preserve their money and bring them a secure rental return. It is also a solution for people who want to buy a second home on credit, which their grown-up children will eventually live in years from now. The guaranteed monthly rent will pay off the mortgage payment, and customers will have the peace of mind that they have made a good investment in central Sofia that they can always turn into a home or cash.
With management and maintenance, BLD ensures that the homes at AVIVA LIVING, as well as the common areas within the entrance, will be clean, serviced and free from tenant-related damage.
- Perhaps the company is relying on some positive trends in the rental market to offer to manage homes?
- As I mentioned, we already have experience in managing rental properties and our BLD Living concept is part of the company's strategic plan to offer both purchase and rental housing. We have the know-how and resources and we aim to have a variety of projects in our portfolio to ensure the sustainability of our business.
Despite the dynamics of the market, our projects have long lead times and often the picture is different from the start of construction to completion. Therefore, we have buildings at different stages - some nearing completion, others in excavation, and all being marketed differently. If the property market were to cool down, for example, there would be an increase in demand for rental housing.
In Sofia, the demand for rental housing in certain areas is outstripping supply, and the homes at AVIVA LIVING not only have the perfect location, but also meet the highest expectations for interior and environment.
They are extremely suitable for foreign clients - students, employees in international companies who travel on projects and business trips, as well as for tourists visiting Sofia.
We offer our clients to take over the management of these homes because we believe in the product we have created and the channels to secure employment.
There is currently no similar project on the Sofia market to compare AVIVA LIVING with, so on the one hand we rely on positive market trends, but on the other hand we also rely on the qualities of the product we have created.
- What are your forecasts for new construction prices in 2024?
- We are preparing for the most dynamic and important year since our company was founded with optimism. Our ambitious plans for large-scale new projects are based on a stable market forecast in the segment in which we build and sell. We expect the prices of quality projects in prestigious neighbourhoods to maintain their levels, even to continue growing smoothly, and the cooling of the market due to the expected change in mortgage rates to affect rather low-end properties and to weed out the proven construction and investment companies from those without resources and long-term planning.
The truth is that Bulgaria is still among the first in Europe in terms of housing affordability, and the increase in mortgage rates will not be drastic. In fact, the market is a living organism and will naturally regulate the number of investors and the number of new projects in the capital. There is already a decline in building permits being issued, and investors will have an additional factor to consider - the EU Green Deal and current energy efficiency and carbon regulations. On the one hand, these regulations will make new buildings more expensive to implement, but they will also draw a clear line between new and old construction. Banks will find it harder to offer mortgages for older housing that does not meet energy efficiency standards and on less favourable terms.
On the other hand, the demand for new construction has also increased in recent years due to the fact that new technologies and system solutions in construction are developing rapidly and provide homes with greater livability and a longer service life.
In January, we announced the sale of the largest project in the city - UPTOWN SQUARE- a new-generation open-plan residential development that combines nearly 500 homes with 5,000 sqm of commercial space. The innovative concept of the project includes a square with restaurants, bars, entertainment and leisure areas that will turn the complex into a new destination for Sofia.
We started the construction of UPTOWN SQUARE confident in its successful realization, because the data gathered from the experience with our clients and clients of our partner agencies in the holding indicate that buyers are increasingly sensitive to quality and environment when choosing a home. Sofia is growing in the suburbs and plots with an excellent location are very rare, so there will always be a market for product that combines an excellent location with a high quality and meaningful concept market.
Our short term forecast is for a stable property market with no major shocks and we expect the year to be a good and fruitful one.