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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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In Berlin, the largest office market in Germany and the third largest in Europe after London and Paris (17.5 million sq.meters*), rents were gradually increasing in the last years trying desperately to reach the record levels of 1992 after falling by half in 1995. Two major trends in 90s on the office market tried to influence it. One of them was linked with the expectations of high rates of economic growth in 90s and explained the big supply (between 1990 and the end of 2001 the total rental space in the city almost doubled). One of the reasons of such high expectations was the fact that the capital city of reunited Germany was moved from Bonn to Berlin. In the early 90s Berlin was considered to be the largest building site in the world. On the other hand, the demand wasn't so strong as expected, which explains the drastic fall in the rents in the middle of the past decade.

After reaching an average vacancy rate of more than 10% on the office market it began to fall by the end of 90s fueled by the accelerated economic activity reaching 8% in the last year. Experts say that the average vacancy rate can decrease to 7% by 2003 but this can happen only if the economy turns the corner of the recession by the middle of 2002. In the same time in many downtown areas the vacancy rates are expected to fall to 4-5% in the next 24 months.

The relative stabilization on the office market in Berlin (decrease of vacancy rates, increase in the rents) is linked with the decrease of the supply and increase of demand in 1999-2000 and the first half of 2001. In the last two years between 300,000 and 400,000 sq.meters rental space were built per year compared to almost 700,000 in average in the period of 1990-2001. At the same time the demand for new spaces has reached 500,000 - 550,000 sq.meters per year in 2000-2001 compared to mere 350,000 in 1997.

The average office rents in Berlin have reached their historic records in 1992 with 50-55 EURO** per sq.meter per month. This can be explained by the sudden move by thousands West German companies eastward following the country reunification and the lack of sufficient quantity of suitable offices in the former East Berlin. Then the German government decided to give many direct and indirect incentives to new investors, which resulted in the massive new construction and following drop of the prices and rents.

Between 1992 and 1995 the average rents fell by half to 25-27 EURO per sq.meter per month. Then followed a period of relative stability with low rents and capital returns, which explained why investors moved out of the local market looking for better places in Central Europe. The sharp decrease in the supply side cause the rents to start increasing slowly again reaching 30-35 EURO. As for the prospects it's unlikely that rents will continue to increase further. It's more likely that they will stabilize on their actual levels in the coming years.

The major shift on the market expected to occur is linked not with the rents' levels but with the tenants' profile. If in 1999 the associations and government agencies were accounted for 26% of the new office spaces on the market, now their share has fallen to 7-8%. On the other hand, in the same period media and information technologies' companies increased their share from 14% to 21%.

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* - 1 sq.meter is appr. 10 sq.feet.

** - For Class "A" locations only. $1 US is appr. 1.15 EURO.

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