SOFIA, BULGARIA-In what is being touted as the largest industrial lease in the country's history, a consumer goods distributor has committed to nearly 250,000 at a new facility that will be completed in three stages during the next three years. The complex at the Industrial Park Sofia East will feature a mix of cold storage, offices and warehouse space in a secured environment.

The agreement was negotiated by Colliers International's Bulgarian team. The tenant, Kaven Orbico, is the official distributor of multiple international brands to the Bulgarian marketplace. "I am very proud that our industrial and logistics team has made history in Bulgaria with this landmark transaction," says Colliers International managing director Atanas Garov, while general manager Ivan Velkov says the firm recognized the level of demand being created for modern flex and industrial product in the burgeoning country. "This success proves we are heading in the right direction," says Velkov, whose firm is active throughout Central and Eastern Europe.

Commitment to the Sofia East complex comes at a time of tight vacancies for industrial product in Bulgaria, particularly the newer space that is increasingly needed to meet European Union standards. A recent report by Colliers International put the inventory in the Sofia market at about 12 million sf, of which about 1.7 million sf is speculative supply, mostly focused on the warehouse sector.

The lack of modern inventory is forcing companies to consider build-to-suit options, says Garov, who also indicates that the need is rising in other Bulgarian regions. Plovdiv has a strategic location for logistics companies, but only 4.5 million sf of space, much of it owner-occupied. Colliers also anticipates growth in Varna, the country's third largest city that has about three million sf of supply at present. One distribution property in the works there could deliver about 900,000 sf in the next few years.