Bulgarian Property Development

With one of the most self-explanatory names on the market, Bulgarian Property Development is going about its businesses in a suitably pragmatic way and has even posted a small profit for the year to June.

BPD is jointly led by the Anglo-Bulgar pair of Ivo Hesmondhalgh and Philip Pashov, who tell Growth Company Investor that they expect to have fully invested the £32.9m net they raised in January ‘in the next couple of months’. Former UBS equity analyst Pashov, who was head of the real estate and tourism department of the Bulgarian Foreign Investment Agency in 2004 and is a current director of the Stock Exchange there, is using his strong network of contacts to plough the company into Bulgaria’s ten largest cities.

Like the management team, the strategy is cleaved into two parts. The original plan, to purchase small plots of property and clump them together in a larger mass to sell as commercial property for large capital gains, ‘would have taken an eternity’, says Hesmondhalgh. A decision was thus made to diversify by buying large plots that would provide less capital appreciation but income via rental yields while the more laborious projects came to fruition. Developments include sites in Varna, Plovdiv, Sofia and Pleven, which shall be redeveloped into retail and business parks and leased out.

The Bulgarian economy is still growing at around 5% and gearing up for expected EU ascension next year. Property remains in great demand within the country and BPD should continue to benefit from this. Worth a punt.