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International Herald Tribune: Irish Fund Targets Black Sea Properties (2009-Feb-27) « Back to all news

Irish fund targets Black Sea properties
by Kevin Brass

Dublin-based investment fund is buying up properties on Bulgaria’s Black Sea coastline, primarily targeting U.K. and Irish owners who bought during the boom years and are now eager to sell.

“You’ve got a number of people who agreed to buy property off-plan [pre-construction] and the people can’t come up with the remaining balance of funding,” said Dylan Cullen, director of Appreciating Assets Ltd.

These types of funds are popping up around the world, as investors look to gobble up properties in the depressed second home market, which they see as a relatively safe haven with a long term upside.

Cullen’s group has raised €7 million for its Bulgaria-focused fund (about $9 million), he says. And so far there has been no shortage of interested sellers. Since mid-December the group has completed on 22 purchases and another 15 are pending, Cullen says.

Typically they are paying in the €60,000 to €70,000 range (about $77,000 to $90,000) for “good size apartments in a good development with close proximity to the beach.”

Not everyone is thrilled when the company announces a price, he acknowledges. But real buyers willing and able to close a deal are a rare commodity in Bulgaria these days.

The offer is “not speculative or an aspirational figure, it’s a figure that is tangible,” Cullen said.

The fund’s strategy is to collect rental revenue on the property for five to seven years, banking on the continued growth of the Black Sea’s tourism business—a plan many owners may not have the patience or resources to pursue.

“We believe that anybody selling to us is happy with the price they’re getting,” Cullen said.“People are more realistic than they’re given credit for."