Occuoier Need Offices 2000 MT

OCCUPIER NEEDS FOR OFFICES i
Title: OCCUPIER NEEDS FOR OFFICES
Student: Milena Tasheva
Submitted for: MSc Urban Planning and Housing
University of Humberside
June 2000
University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

OCCUPIER NEEDS FOR OFFICES ii
Acknowledgements
I am very obliged to Mr. Rob Harris from Interior plc. (London, UK) who was so kind
to provide me with pieces of his works concerning the problems discussed.
I am also grateful to Mr. Peter Dent from Oxford Brookes University (UK) who
helped me with the construction of the questionnaire.
I want to thank also Mr. Plamen Mateev who helped me with the statistical
processing and interpretation of the data from the questionnaires.
In these lines I would also like to express my gratitude to Mrs. Milanka Slavova, Mrs.
Ginka Nikova and Mr. Michael Motzev, all of them lecturers in the modules in IM3P,
which were essential, and of great importance for the setting of the framework as
well as the research methodology.
Special thanks to Mr. George Kalushev, who establishing the IM3P in Bulgaria gave
the opportunity to its graduates to broaden their insights and master transferable
skills.
I am very grateful to the staff of IM3P in Bulgaria for the tolerance and patience.
Finally but not last, I would like to thank to all that were so kind to responded to the
questionnaires and made the survey and the research possible.

OCCUPIER NEEDS FOR OFFICES iii
Abstract
This research aims to extract basic trends in the spatial dimensions of demand-side
of the office property market in the city center of Sofia. Innovation in information
technology, globalisation, business restructuring and adoption of new working
practices are the factors explored. The hypothesis is that changing work activities,
changing organizational structures and intervention of information technologies alter
the nature of demand for business space and hence have potentially profound
implications for the development of office property markets.
The approach adopted for this study follows five stages:

The first part of the research consists of critical wide-ranging literature reviews,
including social science, management and business, information technology, real
estate, architecture and finance. The chapter ends with a brief description of office
property market in Sofia.
Section two deals with the methods and techniques. Technical aspects of the
conducted demand-oriented marketing survey have been discussed. The
impressions of on-site observation and data of secondary sources of information
complement the data of the survey as a quantitative method used.
The third part has been dedicated the analysis of data gathered through the survey.
This part includes exploration of organization’s current office accommodation,
current occupancy, basic needs and future office requirements.
The aspects of credibility, transferability, reliability and objectivity of the present
research have been introduced in the section, called ‘Discussion’.
The conclusions reached in section five suggest that markets for office space in the
city centre are changing. This evolutionary process of change has been analyzed in
terms of pros and cones of business activities, city center image, residents’ welfare
and actors in the office development process.

OCCUPIER NEEDS FOR OFFICES iv
Contents
Title: OCCUPIER NEEDS FOR OFFICES __________________________________ i

Acknowledgements _____________________________________________________ ii
Abstract _____________________________________________________________ iii
Contents ____________________________________________________________ iv
List of tables, pictures and figures _________________________________________ vi
Introduction _________________________________________________________ viii
Aims of the Dissertation _________________________________________________ ix
1. THEORY, BACKGROUND, SITUATION, LITERATURE ___________________________ 1
1.1. Literature Review ___________________________________________ 1
1.1.1. Historical office development ___________________________________________ 1
1.1.2. Changes in organization affecting the demand for office space _________________ 5
1.1.3. Suggestions on the better functioning of the office __________________________ 2
1.2. Property and Rent. Maturity of Property Markets __________________ 4
1.3. Property and Location________________________________________ 6
1.4. Property and Urban Development ______________________________ 9
1.5. Property and Research Methodologies ___________________________ 9
1.6. Situation _________________________________________________ 11
Summary on Section One _______________________________________ 14
2. METHODOLOGY OF THE RESEARCH _________________________________________ 15
2.1. General Methodology _______________________________________ 15
2.2. Special Methodology _______________________________________ 16
2.3. Description of the Tools Used for the Research ___________________ 18
2.3.1. Survey Methods ____________________________________________________ 18
2.3.2. General structure of the questionnaire ___________________________________ 19
2.3.3. Questions Formulation. Measures for operational, physical, regulatory and symbolic
aspects of occupancy _____________________________________________________ 19
2.3.4. Sample Methods Used _______________________________________________ 22
2.3.5. Selection of Targeted Occupiers ________________________________________ 24
2.3.6. Justification on the Selected Territorial Boundaries _________________________ 25
2.3.7. Possible Limitations of the Research ____________________________________ 28
2.3.8. Respondents _______________________________________________________ 29
Summary on Section Two _______________________________________ 33
3. ANALYSIS OF THE OFFICE ACCOMMODATION IN THE CITY CENTRE OF SOFIA
AND POSSIBLE IMPLICATIONS FOR FUTURE REGENERATION SCHEMES __________ 31
3.1. The Organization’s Current Office Accommodation _______________ 31
3.2. The Organisation’s Current Occupancy and Basic Needs ___________ 44
3.3. The Organisation’s Future Office Requirements __________________ 50
Summary on Section Three ______________________________________ 57
4. DISCUSSION _______________________________________________________________ 60
4.1. Internal validity and credibility _______________________________ 60
4.2. External validity and transferability ____________________________ 61
4.3. Reliability and dependability _________________________________ 62
4.4. Objectivity and confirmability ________________________________ 63
Summary on Section Four _______________________________________ 64
5. CONCLUSIONS ____________________________________________________________ 65
5.1.Business reorganization ______________________________________ 65
5.2.Actors in the office development sector _________________________ 66
5.3.The role of planners and urban designers in the process of office
development __________________________________________________ 67

OCCUPIER NEEDS FOR OFFICES v
5.4.Information technologies and demands for office space. Information
infrastructure within the urban structure ____________________________ 67
5.5.Office property markets and change ____________________________ 69
5.6.Implications to the urban problems of the Central city zone of Sofia ___ 69
Bibliography: _________________________________________________________________ 71
Questionnaire sample ___________________________________ Error! Bookmark not defined.

OCCUPIER NEEDS FOR OFFICES vi
List of tables, pictures and figures
Figure 1.1. Businesses and their function, (Raymond and Gunlife, 1997) ______________________________ 3
Figure 2.1. Grids in offices (Ellwood, 1976) ____________________________________________________ 4
Figure 3.1. . Settings for daily activities showing how different settings may be required in the course of the
day. (Raymond and Gunliffe, 1997) _______________________________________________________ 4
Figure 4.1. Organizational scenarios, __________________________________________________________ 5
Figure 5.2. Eighty years of change (Harris) _____________________________________________________ 3
Figure 6.2.a. Groups of occupational aspects according to Raymond & Cunliffe, (1997) _________________ 20
Figure 6.2.b. Needs governing activities and modes at workplace. Raymond & Cunliffeare, (1997) ________ 20
Figure 6.2.c. Possibilities for office space, Raymond and Cunliffe, 1997 _____________________________ 22
Figure 6.2.d. Location of central city zone within the territory of Sofia. (Own sketches) _________________ 25
Figure 6.2. A typical office building from the 50s _______________________________________________ 26
Figure 7.2. A typical office building from the 70s _______________________________________________ 26
Figure 8.2. A typical office building from the mid 90s ___________________________________________ 27
Figure 8.2.a. Location of the respondents (own sketch) ___________________________________________ 29
Figure 9.2.List of Respondents ______________________________________________________________ 30
Figure 10.2. Respondents’ industry sectors ____________________________________________________ 32
Figure 11.3. Current office accommodation. Occupation according to number of floors (survey findings) ___ 31
Figure 12.3.Current office accommodation. Size of offices (survey findings) __________________________ 32
Figure 13.3.Preferred choice for next office (survey findings) _____________________________________ 32
Figure 14.3.The representative office of “Italian furniture” ________________________________________ 32
Figure 15.3.The head office of Dresdner bank __________________________________________________ 33
Figure 16.3.The office of ‘Prestige Business” storey heights. __________________________________ 33
Figure 17.3.The office of The Bulgarian Union of Architects ______________________________________ 33
Figure 18.3.A cultural heritage building used as a corporate house __________________________________ 34
Figure 19.3. Current office accommodation. Rent band (survey findings) ____________________________ 34
Figure 20.3. Current office accommodation. External appearance of building (survey findings) ___________ 35
Figure 21.3.Current office accomodation. Internal appearance of building (survey findings) ______________ 35
Figure 22.3.New office building surrounded by _________________________________________________ 36
Figure 23.3.An entrance for offices in a residential building _______________________________________ 36
Figure 24.3.An office of an air-ticket booking agency at the mezzanine of a residential building __________ 37
Figure 25.3.Current accommodation. Proximity to competitors (survey findings) ______________________ 37
Figure 26.3.Current accommodation. Proximity to public car parking (survey findings) _________________ 38
Figure 27.3.Current office accommodation. Proximity to professional areas (survey findings) ____________ 38
Figure 28.3.Current office accommodation. Proximity to shops, restaurants, etc.(survey findings) _________ 39
Figure 29.3. Current office accommodation. Proximity to motorway systems (survey findings) ___________ 39
Figure 30.3. Current office accommodation. Proximity to public transport (survey findings) ______________ 39
Figure 31.3. Current office accommodation. Prestige (survey findings) ______________________________ 40
Figure 32.3. Current office accommodation. Importance of entrance hall finishes (survey findings) _______ 40
Figure 33.3. Current ofice accommodation. Type of Ventilation (survey findings) _____________________ 41
Figure 34.3. Current office accommodation. Ventilation (survey findings) ___________________________ 41
Figure 35.3. Current office accommodation. Space heating systems (survey findings) __________________ 41
Figure 36.3. Current office accommodation. Level of natural light in offices (survey findings) ___________ 42
Figure 37.3. Infrastructure for IT – current and future needs (survey findings) ________________________ 43
Figure 38.3. Factors for relocation. Flexible office layot (survey findings) ___________________________ 45
Figure 39.3. Factors for relocation. Business restructuring (survey findings) __________________________ 45
Figure 40.3. Factors for relocation. Business expansion (survey findings) ____________________________ 45
Figure 41.3. Factors for relocation. Company’s image (survey findings) _____________________________ 46
Figure 42.3. factors for relocation. End of lease (survey findings) __________________________________ 46
Figure 43.3. Factors for relocation. Length of lease (survey findings) ________________________________ 47
Figure 44.3. Factors for relocation. Rent free period (survey findings) ______________________________ 47
Figure 45.3. Factors for relocation. Rent level (survey findings) ___________________________________ 48
Figure 46.3. Factors for relocation. Current state of business (survey findings) ________________________ 48
Figure 47.3. Factors for relocation. Cash inducement (survey findings) ______________________________ 48
Figure 48.3. Factors for relocation. Service charge (survey findings) ________________________________ 49
OCCUPIER NEEDS FOR OFFICES vii
Figure 49.3. Factors for relocation. Break options (survey findings) _________________________________ 49
Figure 50.3. Factors for relocation. Length of lease break options (survey findings) ____________________ 49
Figure 51.3. Future office requirements. Activities over the last three years (survey findings) _____________ 50
Figure 52.3. Future office requirements. Type of office (survey findings) ____________________________ 50
Figure 53.3. Future office requirements. Hot-desking (survey findings) ______________________________ 51
Figure 54.3. Future office requirements. Tele-working (survey findings) _____________________________ 51
Figure 55.3. Future office requirements. Touchdown (survey findings) ______________________________ 52
Figure 56.3. Future office requirements. Hotelling (survey findings) ________________________________ 52
Figure 57.3. Future office requirements. New working practices and space requirements (survey findings) __ 53
Figure 58.3. Future office requirements. Current use of computers (survey findings) ____________________ 53
Figure 59.3. Future office requirements. Adoption of the new working practices (survey findings) _________ 54

OCCUPIER NEEDS FOR OFFICES viii
Introduction
The main insight from the research concerns the importance of bringing together
ideas and theories from different perspectives. The literature on societal and
organizational change generally neglects practical outcomes such as the demand
for new building forms and the impact of the existing built environment and
institutional market structures on adjustment processes. Much of the property
literature is about valuation models or lease and ignores wider social, urban and
economic change. These aspects need to be brought together. That is the main
reason to explore the future impact of office development on the urban development
within larger framework. Therefore, for the purpose of the present research, an
assessment of the following factors has been proposed:
a.) Flexibility of business units and readiness to deal with changing
lease structures and new economic environments.
b.) Market perceptions to change
Is it possible for the property market to act as a barrier to change? The correctly
price differences in lease contracts, the added uncertainty that a more volatile
economic environment brings should be considered as main factors. These factors
have impacts for development appraisal, for funding and financing, investment and
property portfolio performance. Therefore they lead to supply-side restrictions.
Inappropriate pricing models usually make it difficult to assess claims made about
the impacts of policy and legislative changes on the property market. The
development of more adequate pricing and valuation models capable of handling
the greater diversity of leasing forms, then, must be a priority. With those in place,
supply side restrictions will most probably dissipate. There are major institutional
constraints to change as professional practice standards, legal precedence and the
educational background of practitioners. There is a danger that the gulf between
theoretical developments and actual practice will widen further if this process of
communication does not take place. The process of change could become more
problematic due to inertia, resistance, and conservatism – and uncertain
quantitative skills.

OCCUPIER NEEDS FOR OFFICES ix
Aims of the Dissertation
The aim of the dissertation is to conduct a research, which has to explore occupier
needs in the emerging commercial office market in Sofia, Bulgaria and their impact
on urban regeneration processes and spatial restructuring of the city centre.
The backbone of the study is an occupier focused marketing research, which would
be sensitive in detecting and predicting the consequences of wider cultural,
technical and commercial shifts against which property development is not insured.
The conduct of a detailed market research and the interpretation of the data could
be grouped around the following objectives:
 To obtain a picture of the Office Market in the city centre of Sofia and
discuss the inter-relation of the factors and features distinguishing the
office property in the city center,
 To explore the possible reflection of changing occupational demand upon
the development process and regeneration schemes of the city centre
Within these broad aims, the specific objectives are:

 To identify changing aspects of business organization and practice and to
determine their impact upon occupational demand;
 To explore how changing occupier needs and attitudes may be translated into
ownership and lease form requirements;
 To identify sites and areas within the city centre, which have the potential to meet
the needs of future office developments.

OCCUPIER NEEDS FOR OFFICES 1
1. THEORY, BACKGROUND, SITUATION, LITERATURE
1.1. Literature Review
The main objective of the literature review is to summarize the main trends in:
1. Historical office development. The office as archetype

2. Changes in organization affecting the office and demand for office space
3. Suggestions on the better functioning of offices
1.1.1. Historical office development
According to Raymond & Cunliffe (1997), offices in relation to the type of the
organization were monasteries, palaces, palazzos, markets, confessionals, tents,
factories, landscapes. Old historical city centres are proud of showing a great
amount of the listed types.
The model of the monastery implies common procedures and common language. It
supports an enclosed, secretive, wealthy and powerful organization. Individual
workers move between static buildings.
Palaces are recognized as scenery for demonstration of the organization’s great
wealth and power and a prerequisite for promoting corporate image. The whole
organization moves from place to place.
The Italian Renaissance palazzo refers to the impressive places of business, which
resemble homes. This archetype is usually associated with banking, land-owning
and trading.

Sheltered arcades and galleries were the prototype of the contemporary stock
exchanges where the IT has broken the mould and the trading floor has become a
virtual one.
Confessionals are known as professional offices and usually seek an image of
knowledge, integrity, stability and privacy. They are small town houses and shelter
the modest space needed for the small firm of the doctor, lawyer or independent
consultant and their clerks.
Tents are associated with mobile, lightly staffed and lightly furnished offices, always
close to the customer. They have the best communications of their time.
The office as factory is highly rational, tailored closely to the current theories of the
organization and human behavior.
The office as landscape presented for the first time in the 1960s, is the German
version of the factory model. Here the architecture is a consequence of the
management approach in the organization and its main components are wide, open
spaces, informally arranged furniture, plants and screens defining modesty-sized
workgroups.
IT and telecommunications offered the visions for the future office as: laboratory,
college, club, hotel, and shopping centre, control centre, oasis, village street.
The model of a laboratory reflects the move towards project teams in office work.
The main principle is to have well-serviced workspaces that are large enough to
give flexibility of use, but small enough to provide the intimacy needed for a
committed workgroup.
The college is the archetype of the ‘learning organization’ and is is recognized as a
place for pushing outward the boundaries of knowledge – both for the individual and
society. It provides a great variety of workspaces: lecture and seminar rooms,
laboratories and workshops, libraries and laces for quiet study; common rooms,
dining halls and bars for social interaction; shady trees, squash courts and running
tracks.
The same is for the office as club but with more of an emphasis on interaction and
transience and less on solitary learning. This model turns to be rather attractive for
the virtual organization thus ensuring the stability and strong image of the place
countering the intangibility of the organization.

The personal sleeping spaces and function rooms rented by the hotel have become
personal workspaces and meeting rooms. The office as hotel depends on a high
quality of facilities and services.
The models discussed so far are useful for opening up thinking about the
workplace; they are suitable test for the relationship between way of work and place
of work.
Each model contains elements that may suit a particular organization and its
culture. But the major factor influencing the archetype is the production in terms of
product or service, and therefore the business functions that occur in offices. (see
fig.1.1.)
Figure 1.1. Businesses and their function, (Raymond and Gunlife, 1997)
Business functions are
usually recognized as
direct (the prime and
usually the profit making
ones) and indirect (those
enabling the organization
itself to perform well) –
secondary or subservient
(fig. . ). Some companies
operate in one branch
only, thus being dedicated
to one main function,
wears the indirect
functions normally all exist
to some degree. Each
function contributes to the
profit-making and good
performance. Each
function is a strategic
pattern of needs, which
reflects the kind of spaces

and how they fit together, the furniture, the atmosphere and the image that they
project.
Fitting an organization into a building implies approaching the problem from two
directions simultaneously: How much space
does a certain number of people needs,
and how many people can the building
hold. Zoning, stacking and circulation
design is central to the feel of an office.
Usually office buildings (Raymond and
Cunliffe, 1997; Ellwood, 1976) are likely to
contain several kinds of grids, shown on fig.
2.1.: structure, shell, services, settings,
planning. The physical layout is a reflection
of the relationships between groups and
departments, coordinated and related to the
patterns of workflow and space criteria.
Furthermore, different settings are required
for different daily activities within the
organization. (see 3.1.)
Figure 2.1. Grids in offices (Ellwood, 1976)
Figure 3.1. . Settings for daily activities showing how different settings may be required in the course of the
day. (Raymond and Gunliffe, 1997)

Figure 4.1. Organizational scenarios,
(Raymond and Gunliffe, 1997)

1.1.2. Changes in organization affecting the demand
for office space
The era of radical corporate structures,

emerging markets and new technologies, will
most probably turn upside down the accepted
norms of what work is, and how it is
undertaken. The new wave management
theory has a significant impact upon office
development. Sometimes accommodation
described as ‘flexible’ is a means of a company
to achieve the objectives of their business plan.
Recently the cause and effect have been
blurred and often confused, therefore some
authors (Harris, year unknown; Raymond and
Cunliffe, 1997) support the idea of recognizing
the diversity of management structures and
work processes and the possibility to devise a
wide range of workplace solutions that would
be able to respond to different demands.
The new practices of tele-working, hot-desking, touchdown and hotelling have been
considered as valuable evidence that new technology is liberating organizational
learning and work from their traditional locations. The boundaries between
yesterday’s activities (the factory, the university, and the office) are being replaced
by networked, flexible connections to sources of information. People are
increasingly using knowledge when they want it and not just where it is
institutionalized, all they now need is to plug in. This facilitates the transition from
large corporate operations based on hierarchy to teams and networks, and the
emergence of local workplaces scattered throughout the city (country, even the
globe), complemented with concentrations of formal and informal meeting places.

(see fig. 4.1.)
The new IT’s have witnessed that organizations now participate in the process of
cyberspace formation. The line between what is real, and what is virtual there
continues to be blurred. New types of communications, forms of interaction (both
interpersonal and mediated) take place within these firms. The main characteristic of
the organization - common territorial location, seems to have vanished. The change
from the moral to the technical influences the context of work. The transition from
the industrial age towards the information age often seems to be a matter of
polarities – it is either giving up the old or embracing the new, or adding the new to
the old. Post Modern society do enjoy the boundless nature of the new
communication media, thus enchanting virtual communities and their sprawl into a
community that ‘is hyperrealistic, that is, more real that the notion that it is copying’
(Baudrillard, 1994, p. unknown). However the concept of what is real and what is
not is increasingly being redefined and blurred. The main implications of the issues
discussed so far are that one may argue whether physical interactions are still
necessary. But what we should now realize and admit is that individuals of the
postmodern world are part of not one, but many communities. Most of them have
already found a new sense of place.
The future impact of technology on the offices according to Harris (source: Internet)
could be summarized as follows: (1) The simplistic notion that new technologies
(especially IT) only destroy jobs, ignores the creative role that It could play in
generation of new activities, and (2) The changes are due mainly to urban
economics rather than to the influence of IT.
1.1.3. Suggestions on the better functioning of the office
A linkage between change and facility management are knowledge and flexibility.
Knowledge implies the notion that offices should be places where people can learn
together, where the ‘learning organization’ is more than just the sum of individuals.
Flexibility means readiness to respond to new influences, amend old practices,
follow shifts, form teams, bring in consultants, or simply an availability of places

waiting to accommodate whatever change is happening now or tomorrow). (

Ramond and Cunliffe, 1997)
Does physical environment contribute to job satisfaction? Is this process conscious?
Open and informal work patterns pose the question of compatibility of individual
needs for personalization and privacy as well as the need of defensible space at
work.The effectiveness of the organization is significantly increased when its
structure is mirrored in the design of the workplaces. “Despite the lack of direct,
empirical evidence, it is difficult to deny the potential importance of the physical
working environment for an organization’s effectiveness. The workplace apparently
can influence individual satisfaction and performance; it also seems to have a role in
the communication and in the formation of groups. These in terms may contribute to
organizational effectiveness.” (Sunstrom, 1986, p. unknown)
Harris summarizes the 80 years of change in the office market as follows (see
fig.5.2.):
WORKPLACE SYSTEMS
Pre-War Production line Pre-War Simple lighting and heating
Labor intensive Natural ventilation
Task oriented Mechanical typewriters
Hierarchical
1950s Data processing 1950s Mainframe
Departmental Data processing units
Corporate Electronic typewriters
1980s High specification 1980s The workstation
Extended hours Building management systems
Large, open area floors PCs and networks
More cellular space Fax and teleconference
Beyond 2000 Mixed use of buildings Beyond 2000 Individual environmental control
Core/periphery Integrated Building Management
Downsized Systems
Hotelling Natural ventilation/lighting
Flexi-time IT conference
CULTURE FINANCE
Pre-War Small scale Pre-War Owner occupied
Uniformity Long leaseholds
Task oriented Large estates
1950s Multi-layered 1950s 25 year lease, FRI
Corporate identity Mortgage finance
Large scale Debentures
1980s Delivering 1980s Non-recourse
Outsourcing Off balance sheet
Individualistic Debt finance
Meeting space Mezzanine finance
Beyond 2000. Flexi-time Beyond 2000 Securitization
Flexi-place Management
Group areas Flexibility
Employee welfare Occupational licenses
Networking Multi-occupied buildings
Figure 5.2. Eighty years of change (Harris)

If we have to adopt this retrospective for the purposes of this survey, we will
interpret these changing workplace demands as follows: office environment has
been changing from fixed-time, fixed-space, single purpose, single status,
departments, individual, private information, variable cost, central control and
exchange value into flexi time, flexi-space, multi-function, task-related, groups,
teams, shared knowledge, fixed cost, individual cost and use value. This changing
environment requires that all the actors involved in designing, delivering and
management (facilities, personnel and system) of workplaces should recognize the
complexity of demand for space and respond to it.
Analysis (Guy, Harris, Ramond & Cunliffe) suggest several logics of innovation,
each relating to a different form of environmental value, and emanating from a
distinct (though related) source of environmental concern, with its own history and
constituency of supporters.
These five ‘logics’ may be termed ‘community’, ‘comfort’, ‘aesthetic’, ‘smart’, and
‘ecological’. The community logic emphasizes socially cohesive design; the comfort
logic encourages design promoting good health; the aesthetic logic advocates
designs expressing a closer relationship to nature; the smart logic prioritizes design
maximizing the efficient use of resources and the ecological logic supports designs
that minimize environmental impact.
1.2. Property and Rent. Maturity of Property Markets
Both institutional and private investors recognize property as an investment

medium, the relative attractiveness of which can be evaluated against other asset
classes. In particular property provides a means of reducing or spreading risk by
diversifying the asset base of a portfolio either directly or indirectly into real estate.
Normally this is into different sectors of the commercial property market though
diversification benefits may also be achieved by investing internationally. The
removal of barriers to capital movement and increasing information flow has
promoted real estate as an international investment asset. IT developments and
liberalism in financial markets over the last decade have made it easier and more
attractive to diversify internationally with global investment strategies frequently
seeking to target countries in different phases of the economic cycle. In this respect
the increasing attention given to the political and economic integration of Europe
has stimulated a growing interest in the potential of property investment markets
within central European cities (Berry and McGreal, 1995).
Property investment is concerned with the commitment of capital to secure future
benefits, which may be in the form of capital gain, income flow or a combination of
both. Since the 1970s there has been major growth worldwide in investment in real
property, based on the belief that property within a multi asset portfolio will provide
security of capital and income in an uncertain economic environment and also
produce relatively attractive returns (Adair et al, 1995). Indeed the primary reason
for including property as an investment asset is to achieve balance in the portfolio,
the traditional view being that property is a long term low-risk investment with
potential for diversification (Rydin et al, 1990).
The provision of information networks and the availability of market information are
considered to be essential attributes of maturity. However given the considerable
degree of diversity in market practice within Europe, a greater awareness of the
respective strengths and weakness on matters relating to planning, legal, tenure,
taxation and valuation procedures is required (Berry and McGreal, 1995; Adair et al,
1996).
The ability of cities to accommodate a full range of use and investment objectives
and to tailor property rights to specific individual requirements is recognized as an
indicator for property market maturity. (Keogh and Darcy, 1994) A mature market
most often facilitates trade in property interests, adjust the stock of existing interests
over time in order to equate with the changing needs of user and investor
requirements and to facilitate the development process. Another characteristic of
property market maturity is the existence of a sophisticated property profession with
its associated institutions and networks, which at that stage of the investigation,
have not been recognized in Bulgaria by the public, though they officially and legally
do exist. Here comes the question of openness, reflecting the availability of market
information, which as any kind of information in Bulgaria is insufficient. Practice
shows that market information encourages national and international participant

behavior; allows a free flow of capital between locations; and facilitates the creation
of portfolios diversified geographically and by asset class. (Berry and McGreal,
1995; Adair et al, 1996)
1.3. Property and Location
Property cannot be defined as a commodity only. Building and its production could
be seen upon as property with its ‘emphasis upon location and all its qualitative
implications render each property unique, in the sense that the links to a specific
environmental and social setting (…). All property has therefore a monopolistic
connotation, leading to the emphasis in selling property not only with reference to
the building but also to the area with which it is associated’ (Luithlen, 1993, p.42)
The need to balance returns against risk has promoted the development of
diversification strategies. However in structuring a portfolio, McNamara (1993)
argues that institutions are not entirely free agents in terms of their investments and
are restricted in their ability to take risks.
Linked to the effects of global change on city economies is the ability to develop the
institutional capacity to capture economic flows (Brotchie et al, 1995; Healey et al,
1995). The economic success of global centres of agglomeration is strongly
dependent on the ability to offer institutionalizing processes to support the economic
life of firms and markets. In addition, it is dependent upon the ability to attract flows
of investment and entrepreneurship; and to offer a variety of external economies of
scope and scale to existing and potential business. (Amin and Thrift, 1994) With
global cities becoming repositories for the concentration of economic power and
investment flows, the challenge will be in overcoming the inevitable gap in
prosperity between cities in western and central Europe. Whereas the more affluent
cities will be able to improve their service provision and infrastructure base, the less
affluent cities in central Europe are faced with an aging infrastructure, poor
environmental conditions, sub-standard stock, inflexibility in local decision-making
and limitations in facilitating the property development and investment processes
(Wegener, 1995).
The noticeable differences in location patterns at national and city level are due to
different location requirements of the different activities (that is the reason to put a
question about the industry sector in which the occupier operates). The survey also
will be grounded on the basic assumption of the location theory (Balchin at al).
The location theory states that agglomeration economies have the potential to
produce competitiveness, higher productivity and higher incomes. Or as Castells
explains it: ‘the business centre is the abstract space constituted by the networks of
exchange of capital flows and decisions (…) Because the space of flows needs
nodal points to organize its exchange, business centres and their ancillary functions
constitute the localities of the space of flows. Such localities do not exist by
themselves but by connection to similar localities organized in a network that forms
the actual unit of management, innovation and power’ (1993, p. 252). The survey
would try to test the hypothesis that no matter of the current practice of out-of town
business parks and decentralization of office clusters in the city centers in the West
European countries and the United States, the current needs of commercial office
sector in Sofia are still concentrated in the city center. Thus the research will seek to
define the relationship between the two components of the agglomeration
economies: internal (significant in large urban areas) and external (based on
localization and urbanization).
The survey would seek also to investigate the relationships between the locational
factors and operational ones. The frame of the study will follow closely the case
study of Dent and White(1997), who have examined the perceptions of existing
occupiers and made an effort to determine whether current property provision is
meeting need and also to aid understanding of potential future requirements. The
data, which supported their survey, was gathered as part of comprehensive study of
the Birmingham office market. The objective of the study was ‘to gain a better
understanding and appreciation of occupier needs and preferences in terms of the
type and location of commercial office accommodation’. (Dent and White, source:
Internet) The study also included analysis of occupiers’ responses to determine
future demands and trends of such accommodation.

Increasing locational flexibility results from developments in informatics. At a macro

scale firms are less tied to national and regional markets or to central cities in the
urban hierarchy. At a micro level, however, individual workers can work from home -
or anywhere - linked to their base by telephone, fax, modem, e-mail or video-
conferencing. Information technology changes consumer preferences (particularly
for ephemeral niche products) and provides greater flexibility of production
technologies.
The ability to develop the institutional capacity to capture economic flows is linked to
the effects of global change on city economies (Brotchie et al, 1995; Healey et al,
1995, Lizieri, 1997). Amin and Thrift (1994, cited in Lizieri, 1997) argue that the
economic success of global centres of agglomeration is strongly dependent on the
ability to offer institutionalizing processes to support the economic life of firms and
markets; to attract flows of investment and entrepreneurship; and to offer a variety
of external economies of scope and scale to existing and potential business. The
concentration of economic power and investment flows offers the challenge in
overcoming the inevitable gap in prosperity between cities in western and
central/eastern Europe. In Eastern Europe, and in particular in Bulgaria, local
markets still lack the depth and liquidity for large scale investment due to the
absence of a broad base of local institutions committed to long-term investment.
Specific characteristics of post-communist cities and their different profile from
western European counterparts pose major challenges regarding their integration
into the global international economy thus allowing them to demand grants from
International and World organizations. The particular geographical situation of
Bulgaria – on a crossroad from East to West, motivates its entrance to the
competition within the urban hierarchy in Europe and the further possible
implications for the attraction of both investors and end-users.

1.4. Property and Urban Development
The actors in the development process require a clear understanding of how

property markets emerge, mature and perform over time. The degree of maturity of
property markets may range from a relatively simple form in which the real estate
sector is poorly developed to a sophisticated state where the property profession
operates in markets, which reflect complex requirements for use and investment. In
influencing the degree of maturity there is broad agreement that urban dynamics
and real estate market activities are strongly influenced by economic structures
(Jones Lang Wootton, 1992, cited in W, P…). The immature stage of economic
development and urbanization is characterized with the most identifiable real estate
activity - construction. The range and complexity of market activities increase when
economic, cultural and technological interactions become more sophisticated and
the service sector expands to facilitate financial processes.
Hypothetically, one could assume that there is an interaction between economic
development, urbanization, urban form and real estate product. But in reality, there
is not necessarily a simple, direct relationship between the stage of urban
development and the advancement of real estate markets. Indeed the history of the
socialist city, characterized by an absence of a land market, fixed prices and
nationalized businesses, suggests the opposite. In order to understand urban
change, one should understand the constraints imposed by the operation of the
property market. At the same time there are equally valid arguments that to
understand how and why the property market process in individual cities has
evolved it is necessary to understand the pressures for economic change .
1.5. Property and Research Methodologies
At a strategic level Worzala and Bernasek (1996) consider that the value of most
real estate is derived from local market conditions with local constraints determining
the supply, the demand and the value of property. While investment in property is
frequently based upon transactions involving the existing stock rather than new
projects, the latter creates the image of a vibrant city equipped for the needs of
modern business activity. However market choice can be limited due to institutional
constraints including planning policy and procedures with a city’s planning system
capable of portraying positive or negative images to potential investors ranging from
flexibility to bureaucratic inefficiency. Cities require planning systems, which are
responsive to market conditions and capable of delivery under changing demand,
and supply-side pressures reflected by market performance indicators and
influenced by factors such as lease arrangements, liquidity, transparency and tenant
demand. Within central European countries the impetus arising from deregulation
and privatization has stimulated the emergence of real estate markets, their rapid
development and internationalization.
Mapping the changing context of office development requires a more qualitative

approach to property research. The accuracy and availability of econometric data
tell little about the shifting priorities of occupiers. (Guy and Harris, 1997) Instead of
focusing on the production and recycling of property market statistics, the
contemporary trends in the researches concerning property markets are
concentrated on possibilities to locate ‘the cultural shifts characterizing changing
perceptions of risk among the occupiers’. (ibid., p.130)
Waldrop’s work on non-linear systems (1992) puts the dilemma whether the
prediction and forecasting should be the goal of research or not. Forecasting gives
guidelines and apparent truths about how the market is driven, therefore data,
analysis and their interpretation should not be underestimate. But one should also
explore how the market might, under given particular circumstances, operate.
According to Harris (source: Internet), a trend has been observed during the past
few years: an increased use of predictive modeling techniques in order to make
property more compatible to other investment operations. The simple linear
relationships of econometric forecasting are appropriate for relatively static markets
where the classical assumptions of economics about the behavior of the rational
individual, and aggregate behavior of individuals seek to arrive at equilibrium.
Therefore the linear forecasting methodology, and the last 30 years’ distancing from
demand in the sector, has led to mismatch between the stock supplied by
developers/investors and the space and its qualities required by occupiers.
Further more Cadman and Catalano (1983, p.x.) have suggested that ‘ if we
find no time for reflection we run the risk of being content to be swept along by
current events without a proper sense of direction. We run the risk of doing no more
than reacting to events and as a consequence failing to foresee both problems and
opportunities’. Thus putting the global framework would assure better management
of scale and form of development.
1.6. Situation
Sofia, the only city in Bulgaria with a million populations, is by tradition

administrative and industrial city, whose economy has been developing since the
end of the 19th century up to now. Though there are historical evidences that the city
dates back from 29th year BC. (UNDP Human Development Report, Sofia), the
contemporary city has been borne in the past 100 – 120 years. During the decades
following the World War II there was a rapid expansion of the service sector and
office development due to the increased rates of industrialization and urbanization.
New industrial, commercial, financial, construction has been created which favored
the enlargement of markets and the concentration of representative offices in Sofia.
Before 1989 the planned economy reflected the development of the city centre by
shaping the headquarters of the government and local administration, the buildings
of the different ministries, representative offices of leading industrial producers. The
planning authorities took decisive role in the process of upgrading of substantial
accommodation – especially multifunctional buildings, bank offices and nationalized
private houses built during the period between World War I and World War II and
earlier. This period could be distinguished with centralized capital assets, no
oversupply of office space and low demand for rented offices. Only few business
sectors, as lawyers and legal services for example, practically needed and were
allowed to own or rent private or semi-private offices.

If we have to summarize, City structure under socialism reflected the process of

rapid urbanization, central planning, central provision of services, public transport,
ready access to work, leisure and other sources on equal basis.
At the beginning of the transition period, after 1989, the necessary restructuring of
economy could be mainly represented as a restructuring of property rights. The
transformation from the socialist city to the post-socialist city has been facilitated by
commercial property development, which in turn has substantially contributed to the
reorganization of land use within the city. Demand for property in particular office
space has generated development in central city and some inner city locations
promoting economic revitalization with consequential effects upon land use
patterns.
The property market was quickly established at the beginning of the transition
following the commencement of privatization programmes and policies concerning
the liberalization of prices. Within the framework of closing big state enterprises and
selling government property a large amount of state offices and institutions also
closed, and their buildings were free and ready to enter the competition of rented
office space. Rent deregulation acted as stimuli to the market. Furthermore
liberalization of international trade opened up the property market to foreign demand
for real estate. Market growth, however has not produced tension with demand for
commercial space concentrated in central Sofia where many buildings, the
streetscape and overall character of the historical centre is protected. As the
availability of vacant plots for new construction is low, the acquisition and
refurbishment of existing buildings for commercial usage has been a key
characteristic.
The historical core of Sofia contains a considerable share of the total city office
stock. Currently, almost half of the floor space in the historical core is in non-
residential use with the process of residential decline having accelerated in the past
ten years.
Now, according to Human Development Report for Sofia Municipality (UNDP, 1997)
there are 77874 business units, 990 of them are from the public sector, and the rest
are private. The main shares in the structure of the registered companies have the
commercial activities (60%), manufacturing (10%), construction (6,5%), transport

and communications (16.5%), finance and insurance (1.7%). Its service sector has
been and still is above the national average - the share of the service sector
employment is 34%. Sofia is the host of the central offices of The Bulgarian National
Bank, The Bulgarian Saving Fund, 35 Commercial Banks (7 government, 20 private,
7 international and 1 of the Municipality), 8 Foreign Banks. 123 financial mediators
and brokers as well as 50 life insurance and 54 insurance companies have been
registered.

Summary on Section One
Section one deal with theoretical concepts on office accommodation. Archetypes

and connotations to offices, office buildings and complexes vary in history from
ancient times up to the era of IT and communications. Different historical modes of
office accommodation serve definite business functions, organizational and cultural
needs. It has been historically tested that most of the changes in demand for office
space are due to changes functional needs. As a result, new working practices
have been emerging and establishing. Changing working practices, culture,
environment and style evoke demand for office space, which is more complex than
ever. This in terms generates complex relationships between actors involved in the
office development process.
Property investment still seems to be a significant investment asset while operating
within mature property market – it provides security of capital, ensures income when
the economic situation tends to be uncertain and produces attractive returns.
Office as property is not a commodity only. Recently offices have been increasingly
associated with location, which best reflects the effects of economies of scale.
Locational flexibility is due to changing patterns of work, use of technology,
organizational and institutional structures.
Urban dynamics and real estate markets are strongly influenced by economic
structures. The relationship between the stage of urban development and the
advancement of real estate markets is not only simple and direct. This is the reason
for cities to require planning systems responsive to the market conditions and
capable of delivery under changing demand. Having in mind the dynamics of
property markets, one should agree that office development needs a more
qualitative approach to property research.
Property market has been quickly established in Bulgaria at the very beginning of
the transition. Liberalization of prices, selling of government property, the
commencement of privatization and liberalization of international trade have still not
produced tension with demand for office space in Sofia city center. But a disturbing
decline of residential activities, low rate of availability of vacant plots and significant
amount of buildings subjected to or in need for refurbishment and renovation.

2. METHODOLOGY OF THE RESEARCH
2.1. General Methodology
The process of globalization of Economy and especially the aspirations of all East
European countries European Union membership has been assumed as broader
context of this research.
Bulgaria now has to act as ‘host to inward investment from transnational companies
looking for low-cost production bases close to expanding local markets’ ( Hall, 1993,
p.885) as well as workforce which appears to be well educated , to follow the path
of peripheral nation of the present EC.
According to literature (Hall, 1993,) these economies suffer serious shortages of
commercial office and retail space , which will need to be remedied
 The so called “transition economy” (typical for East European countries)
with its incomplete societies and emerging property markets, which would
hardly follow any rule or relationship
 The increased uncertainty of post-modern times (a recent example could
be the last war in The Balkan peninsula, which postfactum affected all
sectors of economic life no matter what the previous predictions and
forecasted outcomes were at the beginning of 1999.
Having in mind the mentioned above, the present survey would seek to
extract basic relationships and current features distinguishing the office property
sector in the city centre of Sofia. Hoesli at al (1997) have used cluster analytical
techniques to examine dimensions of diversification in UK commercial property
markets at a larger scale - regional levels. In urban social science, cluster analysis
has been used to explore urban structure at city level. (Hoesli et al, 1997; Green
and Owen, 1990) Clustering techniques have been also utilized in real estate
research (Smith and Kroll, 1989; Mac Gregor, 1995). Although the fact that cluster
analysis techniques are descriptive and exploratory tools, the final results would
possibly lead to results that would be consistent with models of real estate market
behavior. Such a research would help to improve the asset allocation process as

well as to make clearer the link between property performance. In this survey cluster
analysis would be applied in order to identify general relationships between the
locational, infrastructure, and operational factors and the potential of the sites in a
framework of preliminary defined constraints (such as information available,
selection of sites in a preliminary defined territorial boundary, selection of targeted
occupier in the process of primary data collection – described in details in the
chapter where methodology is explained)
2.2. Special Methodology
Under investigation was the application of the theoretical model stating that
successful strategy for change includes two relatively separate phases:
(1) Facility management
(2) Change
The main purpose is to test the hypothesis that the occupiers of office space
approach change implementation the other way around. First, they deal with
structure (both in national economy, corporate structure and lifestyles) and then
they try to change policies, practices, attitudes and values. To test the hypothesis,
four groups of factors dealing with occupies’ perceptions, attitudes experience and
expectations of change have been formulated.
The data needed for grouping of factors had to include:
 The organization’s current office accommodation
 The organization’s current occupancy
 The organization’s future office requirements
 Information on the organization
The ideal data sources, which could guarantee reliability and validity of the obtained
information, were:
1. A questionnaire survey
2. Periodicals concerning Real estate;
3. Interviews with brokers and employees at Real Estate agencies
4. Documents from other organizations:

 National Statistical Institute

 UNDP
5. Publications, articles and other materials reflecting mass media and public
reaction to the latest National urban competition for the city centre of Sofia
6. On-site observations.
The purpose of this research was to identify patterns of use of the commercial
property stock and the readiness of companies to cope with change regarding
property as an asset: both operational and financial.
CHANGE according to the literature (Raymond & Cunliffe, 1997, Berry & McGreal,
1995) could be discussed in terms of:
 The industrial and information age, which changes the way all people work
 The old and the new, adding the new to the old
 Difference in rates of change in the physical environment. This means that the
structure of organization, markets and business structures are now changing
faster than buildings can.
 Change is separating work from place or fusing workplace and home but it still
needs a physical setting – the office. People (individuals with unique
characteristics and personality) should be constantly co-ordinated with the
physical work place and styles of organizational management.
 Attitudes towards property has been changed through years – the office is
viewed as an asset rather than an expense
 From fixed linear measure and a progression from Monday to Friday with nights
for rest working time has been changing into global, parallel, overlapping, flexi-
time. People are increasingly coming and going as suits their tasks
These changes should affect the structure of firms and the nature of work. In a shift
away from vertical integration and the pursuit of scale economies, firms have
concentrated on core business, flattened the corporate hierarchy, downsized, and
out-sourced products and services.

If one has to summarize, property markets as a ‘complex system in which the

overall pattern of activity cannot be described by adding together its constituent
parts. Numerous relationships are constantly interacting and realigning themselves
and the behavior of the whole system is contingent upon changes in the external
environment. Since there can be no absolute measurement of the system, the
overall objective of research should be not in the use of reductionalist tools but on
synthesis and explanation’ (p.39, Harris, source unknown)
2.3. Description of the Tools Used for the Research
2.3.1. Survey Methods
The survey methods include questionnaires by e-mails, post and personal

interviews. An attempt to boost the response rates was made by offering to send
them back the results from the survey.
The postal questionnaire (including e-mail) is: 1.) Less costly, but we have to
increase the size of the sample in order to make the results more reliable, 2.) Allows
the information to be gathered reasonably quickly, and 3.) There is no interviewer to
affect the respondent’s answers. The most serious problem is the difficulty in
obtaining a reasonable response rate. According to literature 20% is quite good for
a postal questionnaire. (Banckoft and O’Sullivan, 1993). For the present research
the response rate was 16%. The problem in this case is the possibility that non-
response may be indicative of a certain attitude, which may lead to biased results
from the questionnaires that are returned. A covering letter was attached to the
questionnaire in which the reason for the survey was described and the anonymity
was assured.
In order to ensure a balanced work, the research would seek various
methods for collecting information and data analysis. Therefore, besides the
questionnaire, some personal observations, and secondary data (published
materials relevant to the topic) would be included in the sections where data are
analyzed and conclusions made.

2.3.2. General structure of the questionnaire
A basis of the study will be to undertake a questionnaire survey of a targeted

audience to examine the following prime areas:
1. The organization’s current office accommodation
This section explores details as size, style and rent of office space. It also
concentrates on the satisfaction and dissatisfaction with factors (appearance,
transport, car parking, location and heating, lighting and IT) that are considered
important for the organization’s business activity
2. The organization’s current occupancy
The section deals with issues related to the nature of occupation. The final objective
is to determine the organization’s perception of their occupancy (long term or short
term options)
3. The organization’s future office requirements
The objective is to identify whether the organization is likely to be in the market for
accommodation in the near future as well as to determine what are the main criteria,
which are considered significant.
4. Information on the organization - its market, staffing and organization’s view on
the effects of information technology on their staffing needs and space
requirements. The section as a whole is addressed towards drawing out
implications of the potential structural changes.
2.3.3. Questions Formulation. Measures for operational, physical, regulatory and symbolic
aspects of occupancy
In formulating the questions the main criteria used was to obtain possibly hottest
view of the attitudes and perceptions of occupiers. The thematically related
questions are ranged at different places in the questionnaire in order to avoid any
mutual influences in answering them. The majority of the questions offer multiple-
choice answers and few of them are dichotomous. No open-ended questions have
been used, for the convenience of the respondents.

Following Raymond and Cunliffe’s (1997) framework and Dent’s (1997) rationale for
survey construction, the questions of the present survey could fall into four groups
each clarifying different aspects of occupation.
OPERATIONAL PHYSICAL ASPECTS REGULATORY SYMBOLIC ASPECTS

ASPECTS ASPECTS
What happens What space it takes up What laws and codes of What its symbolic
Who makes it happen What environmental good practice govern it significance in the
When and how often it conditions it needs What procedures of the organization is
happens What support or organization affect it How it should contribute
What its characteristics enclosure it needs What customs of the to the organization’s
are What main services it workforce influence it external image
In what different way it needs What status it should
can happen What furniture and confer on the worker
What results from it equipment it needs
What other activities it What are its physical
needs to be near to, or effects
separated from, and
how important these
relations are
How valuable it is to the
organization
Whether it still needs to
happen
Figure 6.2.a. Groups of occupational aspects according to Raymond & Cunliffe, (1997)
Operational aspects, physical aspects, regulatory aspects and symbolic aspects of
occupation are influenced by the physical and psychological needs. The former are
closely related to solo, collective, group and congenial activities as well as to
socializing. Definition of needs of an activity involves clear understanding and
discovering of the occupational aspects.
PHYSICAL NEEDS PSYCHOLOGICAL

NEEDS
Space Interaction
Light and view Proximity
Air and temperature Stimulation
Acoustics Peace
Furniture and equipment Privacy
Ergonomic comfort Confidentiality
Security
Territoriality
Status and image
Figure 7.2.b. Needs governing activities and modes at workplace. Raymond & Cunliffeare, (1997)
Following the general framework of the questionnaire (described in 2.3.2.) groups

of questions related to needs and operational, regulatory, physical and symbolic

aspects have been introduced in each section of the questionnaire. (For more
details about the question content, see ‘Sample questionnaires’, attached at the end
of the research)
Thus special questions have been formulated. Some of the measures indicate
attitude towards more than one of the aspects discussed so far. For example,
external and internal appearance of building are measures for the symbolic aspects,
whereas, location, car parking, on-site security, reception facilities and infrastructure
for IT systems could indicate perceptions to operational aspects, regulatory aspects
and symbolic. Natural lighting, heating and ventilation could be discussed not only in
physical aspects closely related to physical and psychological needs, but also to
symbolic aspects to some extend.
The section “About your company’ is addressed mainly to gather data about the
operational aspects of the accommodation. Meanwhile the questions on the
technology utilization and attitude towards the new working practices of hot-desking,
tele-working, touchdown and hotelling give direct information about physical aspects
of occupation, the consequences of which are the prime purpose of this research.
Physical aspects have been directly observed also by means of some questions
from the sections “About your occupancy details’ and ‘About your current office
accommodation’. The questions about size of office, space occupied (in sq.m.), rent
band, ownership, kind of building provide information on the fitting-out process
which give hints about the ambitions, budget and actual standards within which the
interviewed companies operate. Some of the possibilities have been illustrated by
Raymond and Cunliffe (1997)(see fig. )

Figure 8.2.c. Possibilities for office space, Raymond and Cunliffe, 1997
Special attention has been paid to location (question 7./) – an important

characteristic which gives direct answers to questions related to urban regeneration
and identification of suitable sites for future office developments. Factors as
competitors, customers/clients, public car parking, professional areas, motorway
systems, public transport shops and restaurants have been measured from the
point of the psychological needs – proximity and interaction (for convenience
restricted to proximity in the questionnaire structure).
Some of the questions are repeated in the different sections in order to test the
difference of occupiers’ current and future needs. Some of the questions in the
section ‘Future office requirements’ are based on hypothetical situations.
2.3.4. Sample Methods Used
Judgmental quota sample has been implemented for the survey. According
to Banckoft and O’Sullivan (1993, p.68) in judgement sampling ‘the sampler decides
in advance on the factors that will determine whether or not a member of the
population is included in the sample’. (The final choice of respondents is left to the

interviewers). The variables are limited – up to three in number over the selection of
respondents. The controls attempt to ensure that representative categories of
respondents are interviewed. In the marketing research industry, quota sampling is
by far the most commonly employed form of sampling. Quota samples are unique
because they are not probability samples; not everyone has an equal chance of
being selected. (Simkin and Ferrel, 1994, p. 173) Therefore sampling error cannot
be measured statistically. A shortcoming in this case is that not every office
occupant has a known chance of selection in the sample. This method is most often
used in explanatory studies, in which hypothesis are being developed. From a
theoretical point of view the non-randomness of quota sampling is a great weakness
(Banckoft and O’Sullivan, 1993, p.73) as samples drawn in this way are open to a
great risk of becoming distorted. Some experts even argue that the inevitable bias
renders this method of sampling useless. (Banckoft and O’Sullivan, ibid.) However,
one should point out that many market researchers, who actually have to conduct
surveys defend the method on the ground of simplicity, cheapness, speed and the
fact that there is no need for a fixed sampling frame and therefore no problems arise
by non-response. Finally but not last a significant advantage of the quota sampling
in this research is the maintenance of the correct proportions of different subgroups
(industry sector representatives). Thus the first variable has been defined and
balanced. The noticeable differences in location patterns at national and city level
are due to different location requirements of the different activities (that is another
reason to put a question about the industry sector in which the occupier operates).
Location has been assumed as second variable. For the establishment of a flexible
sample frame, we used Yellow pages (as officially no such sampling frame is
available). Thus the third variable is the evidence that company has been listed in
this handbook and therefore is a legitimate.
It should be stressed that the research is focused not only at larger occupiers. The
views of small businesses and activity in the secondary and tertiary property
markets are well represented too. The flexible specialized literature envisages small
firms and start-up firms being innovators in business practice. Empirical evidence for
this is, at best, mixed.

2.3.5. Selection of Targeted Occupiers
The targeted occupiers are selected as follows:

First the territorial boundary as a first variable has been defined. As the total number
of companies, operating in different industry sectors in Sofia is an impressive figure
(105020 towards 31.12.97 according to data from the National Statistic Institute),
the territorial boundaries of the study are reduced to the following areas:
1. The central part of Sofia (the hatched area in the appendix enclosed). This area
is historically determined and the only office area till 1945 (not to mention that,
according to Tashev and historical pieces of evidence) the whole city was within
this boundaries at the eve of the World War I) The past 10 years the sites in the
city centre have been recognized as one of the most prestigious and also
bearing the highest portions of the cumulative effects of the economies of scale.
The ambitious infrastructure projects (of the Sofia underground) have been now
directed here, and at the same time the old worn out housing stock and historical
buildings been used for offices which induces processes of gentrification. The
centre of Sofia has also seen in the last 10 years the demolition of office
buildings with a historical and cultural heritage value and their replacement with
new ones.
2. Specific streets (known as main access routs linking the centre to the airport and
following the highway to the South and West custom checkpoints of the country)
defined as main axis according to the master plan. The selected axes are
Tzarigradsko shosse blvd. and Slivnitza blvd. The routes are historically
determined too. These areas have been chosen because of the potential for
future development on green field at one hand and availability of office buildings
incorporated with technological parks of different scales at other hand. At that
stage of the survey the future occupiers mention them as bases for comparison
and indication whether their location is more likely desirable.
3. The railway station and the South Industrial area contain plenty of sites suitable
for office development and also offer possibilities for better logistic operations as
well as proximity to commercial and industrial activities.

2.3.6. Justification on the Selected Territorial Boundaries
The reasons for defining the city centre as a territorial boundary for the purpose of
the research, is a consequence of the collision of two important urban planning
factors: the historical heritage and the process of urbanization.
Figure 9.2.d. Location of central city zone within the territory of Sofia. (Own sketches)
History of urban renovation of Bulgarian cities after the World War II has witnessed
three main periods (Kovachev, 1999) each of them characterized with different
proportions of balance between the two factors mentioned above.

The 60s are known for radical changes typical for the modern perceptions for town
planning. They were inspired mainly by the principles of The Chart of Athens and as
a consequence many historical blocks and even urban fabrics have been destroyed.
A typical example from this period is the planning and construction of the
representative centre of Sofia, the so-called “Largo”.
The theory of functionalism and modernity was quite simple but applicable for
building at green field. It was a solution caused by industrialization and rapid
urbanization, therefore
administration and the economy as
convenient machinery for setting
directions but neglecting human
needs were the first to readily utilize
the principles of modernity. Identity
has been lost and depopulation of
the centres has been observed
(especially at nights and
weekends).
Figure 10.2. A typical office building from the 50s

During the 70s many single buildings or groups
of buildings of a cultural, historical and
architectural value have been preserved in the
urban regeneration schemes. The risk of
combining different scales and styles was great
and there are many examples for out of scale
buildings, which are not to be discussed in this
research.
Figure 11.2. A typical office building from the 70s

The 80s and 90s are the years of postmodern perceptions in Planning. Architectural
structures and urban fabrics have been preserved and incorporated with the
functions of the city centres. The pedestrian
axis and zones were planned during this
period. The most impressive and large-scale
revitalization of the Sofia City centre is the
“north-south” urban axis. Its main function is to
connect the Central railway station with The
National Palace of Culture, the South Park
gate and the hill of Lozenetz via Maria Louisa
blvd. and Vitosha blvd. Unfortunately at
present the square in front of the railway
station and the area nearby is without any
spatial and architectural frame.
Figure 12.2. A typical office building from the mid 90s

in the surrounding of residential buildings
not far from the National Palace of Culture
The past few years have been recognized for ambitious and resourceful
infrastructure projects as the Metropolitan project and the closing of the First ring
road. Urban regeneration and architectural renovation are closely connected and
dependent with the solutions of the functional, communication and traffic schemes.
In some projects the capital investments for infrastructure reach up to 50% of the
total amount of finance needed. (Kovachev, 1999).
Nevertheless the dynamism in the contradiction between the factors historical
heritage and the process of urbanization, all the alterations and interventions in the
different periods in the urban and architectural development of the city centre of
Sofia have been lined with the directives of the Musman plan dating back to 1935
(described by Tashev, 1972).

2.3.7. Possible Limitations of the Research
The following possible limitations of the study should not be underestimated:

 Availability of information - these data are still a ‘scarce’ resource in
Bulgaria
 As the total number of companies, operating in different industry sectors
in Sofia is an impressive figure (105020 towards 31.12.97 according to
data from the National Statistic Institute), the territorial boundaries of the
study are reduced to the following areas:
1 The central part of Sofia
2 Specific streets defined as main axis according to the master plan,
historically determined and in vicinity to areas with potential for future
development
3 The railway station and the South Industrial area
 The preparation of the companies’ list of addresses will be based on the
recent 1998/99 edition of “Yellow Pages - Sofia”. This means that only
companies that have demonstrated their existence and positions on the
market have been selected for the survey.

2.3.8. Respondents
Figure 8.2.a. indicates the exact location of the respondent. It has been observed
that most of the interviewed firms cluster at the southeast part of the city center and
around in close proximity to the first road ring and along few streets commercial,
prestigious and transport infrastructure importance.
Figure 13.2.a. Location of the respondents (own sketch)

For convenience of the data analyses and confirmability the full list of respondents
has been presented in Fig.9.2. The figure also illustrates the variables, described in
Section 2.3.4.
Figure 14.2.List of Respondents
N COMPANY ADDRESS INDUSTRY BRANCH WAY OF INTERVIEW

1 Post
2 Sales representative Post
3 Real Estate Agency Interview
4 Post
5 Post
6 Non-profit org. Interview
7 Engineering e-mail
8 Construction Interview
Sales reprezentative
9 Sales representative Interview
10 Gov. org. & Quango Interview
11 Interview
12 Architectural and Engineering Interview
13 Non-profit org. e-mail
14 Post
15 Interview
16 Interview
17 e-mail
18 Architectural and engineering e-mail
Construction
19 Gov. administration Observation
20 Interview
21 Internet provider Observation
22 Post
23 Observation
24 Interview
25 Observation
27 Observation
28 Local Authority administration Interview
29 Non-profit org. e-mail
30 Interview
31 Architectural and Engineering Observation
Consulting
32 Observation
33 Observation
34 Observation
35 Transportation and Logistics Interview
36 Interview

37 Non-profit org. Interview
38 Architectural and Engineering Observation
39 Government org. Interview
41 Photo services Interview
42 Personnel service concultancy Observation
43 Commerce e-mail
44 Sofia municipality company Observation
45 Advertizing Observation
Publishing
46 Retailing Post
47 Advertising e-mail
Computers and computer
consultancy
48 Manufacturing Observation
Retailing
49 Bank Observation
50 Translation of video and TV e-mail
materials
51 Privatization and Insurance fund Observation
Business and Management
consultancy
53 Non-profit org. Observation
54 Non-profit org. Observation
55 Post
57 Sales representative Observation
58 Manufacturing Interview
Retailing, Translation of video
and TV materials
59 Post and telecommunications e-mail
Computers and computer
consultancy
60 Manufacturing Interview
Retailing
The final results, connected to the first variable – industry sector

representative(discussed in section 2.3.4.) are presented in Fig.10.2.

Engineering
Engineering
Photography Photography
Representative office (councils) Representative office (councils)
Audio, video and cinema Audio, video and cinema
NGO and Quango NGO and Quango

Distributors, trade and
Gov. and local administration Gov. and local administration representative offices
Distributors, trade and representative offices
Advertising Advertising
Architectural and engineering
Architectural and engineering
Business and Management concultancy Business and Management

concultancy
Marketing research Marketing research
Accounting, book-keeping, audit Accounting, book-keeping, audit
Legal Legal
Computer consultancy Computer consultancy
Computing related activities Computing related activities
Real estate activities Real estate activities
Other financial intermediation Other financial intermediation

Insurance, privatization or
Insurance, privatization or pension funds
pension funds
Building society Building society
Bank Bank
Post & telecommunications Post & telecommunications
Transport Transport
Construction(contracting) Construction(contracting)
Publishing Publishing
Manufacturing
Manufacturing
Industry sector 0 2 4 6 8 10 12 14 16
Figure 15.2. Respondents’ industry sectors

Summary on Section Two
Globalization of economy and the place of Bulgarian economy as peripheral to the

EC activities have been agreed as a broader context of the research. Patterns of
use of office property stock and readiness of respondents to cope with operational
and financial change have been set as a preliminary objective. It was suggested
that the research should ground on a survey.
Postal, e-mail and face-to-face interviews and filling of questionnaires have been
conducted. In order to ensure balanced work and prevent from biases, the use and
analysis of secondary sources of information as well as personal on-site
observations.
The questionnaire survey of a targeted audience has been undertaken. Four prime
sections of the survey have been formulated. This section explores the
organization’s current office accommodation, the organization’s current occupancy,
the organization’s future office requirements and ask for information on the
organization.
The rationale of the survey construction has been based on four groups of factors,
each clarifying different aspects of occupation – operational, physical, regulatory
and symbolic. Questions, addressing these aspects have been distributed in the
mentioned so far survey sections. Some of the questions have been repeated in the
different sections in order to test differences between current occupation (facts) and
future office accommodation (hypothetical situation).
Judgmental quota sample is the sample method used. The variables have been
limited up to three and refer to the selection of respondents. The first variable – the
industry sector, in which the company operates, is responsive to maintenance of
correct proportion of industry sector representatives. Location within previously
defined territorial boundaries has been assumed as second variable. The third
variable tests the credibility and reliability of company’s legitimacy, and for the
purpose all questioned firms have been picked from Yellow Pages, 1998 Edition.

In support to the second variable, the First Ring Road has been assumed to serve
as a territorial boundary. The main access roads and the railway station in close
connection to the North industrial zone have been picked as alternative sites for
comparison.
The central city zone has been selected for the dynamism in the contradiction
between historical heritage preservation and urbanization process. History of Sofia
knows different stages of urban development and regeneration, each characterized
with different proportion of will for preservation and ambitious projects.
Though the development of the central city zone during the last century could be
evaluated as a sustainable one, this part of Sofia needs a thorough and deep
analysis of the needs, perception and attitudes of its occupiers.

3. ANALYSIS OF THE OFFICE ACCOMMODATION IN THE

CITY CENTRE OF SOFIA AND POSSIBLE IMPLICATIONS FOR
FUTURE REGENERATION SCHEMES
The analysis of the main factors is organized as follows:

First a justification of the question discussed is represented, including the
widespread notions and hypothesis from related surveys and literature. Then a short
description of the situation in Sofia, based on the empirical data has been
presented.
3.1. The Organization’s Current Office Accommodation
Offices – what kind of place are they? Seven hours a day, 240 days a year;
approximately one fifth of human
15%
life is spent indoors – at work.
Do you occupy: Large office blocks in the city
Part of a floor
One whole floor centre, the edge of town, the
Two floors
13%
More than two floors renovated and converted
buildings in the core – they could
57%
be located everywhere and their
15% size1 varies. (see fig. 11.3., fig.
12.3.)
Figure 16.3. Current office accommodation. Occupation according to number of floors (survey findings)
At the other hand, office buildings provide the ‘invisible’ backdrop to everyday
business activities. Therefore the production and occupation of office space is
viewed as critical barometer of economic growth.

Figure 17.3.Current office accommodation. Size of offices (survey findings)
At present Rents hover
around $5 - $10 per square
10%
5%
Size of office meter per month or less (see
3% less than 250 m2
250 - 500 m2 fig. 19.3.), net of operating
500 - 750 m2
750 - 1500 m2 expenses, taxes, and usually,
22% 60% greater than 1500 m2
tenant improvements.
42 % of the occupiers require
their office in own self-
contained building and 85 %
of them would
Which of the
35% following
be prepared to share a floor
would be
or building with other tenants.
your preffered choice
41%
for your next office? 42 % of the offices have a
A new purpose built office
commissioner at their main
A refurbished building
reception desk.
A second-hand building
5% 19%
No preference
Figure 18.3.Preferred choice for next office (survey findings)

Figure 19.3.The representative office of “Italian furniture”
Following the classification of

Raymond and Cunliffe (1997)
several subgroups corresponding to
historical periods could be
distinguished when speaking of
refurbished buildings: post-war,
prewar, nineteenth century – office,
nineteenth century – domestic and
nineteenth century – domestic.

Figure 20.3.The head office of Dresdner bank
For the purpose of the research
these subgroups will fall into one
category, thus bearing in mind that
Sofia is comparatively new office
centre (since 1879, when it became
the capital of Bulgaria). The office
buildings in the city centre date back
from the following main periods
(according to Berbenliev) end of 19th
century and the beginning of the
20th century (see fig. 15.3.),
between the World War I and World
War II (see fig.16.3.), After the
World War II up to the 70s (see fig.
14.3.), from the 70s up to November
1989, The transition period (from
November 1989 to now) – see
fig.22.3. Refurbished buildings are
usually well built with good
Figure 21.3.The office of ‘Prestige Business” storey heights.
Figure 22.3.The office of The Bulgarian Union of Architects
Excluding refurbished office buildings
we may note that the floor plans are
inflexible, and some of them even
offer small spaces (especially when
the walls are load-bearing as in the
domestic ones).
A second hand building or apartment
has been recognized as the
alternative of an office space. (see for
statistics fig. 12.3. and for illustration fig15 – 17.3.) At the beginning of the transition
Developers reacted to growing demand for commercial space by refurbishing old

office, industrial and residential buildings along with the construction of new
projects.
During 1991-1992 transactions on Sofia's real estate market were mostly
refurbishment frequently not meeting required standards. Nevertheless, due to a
high scarcity of available commercial space, extremely high prices and rents were
achieved. A substantial portion of the office space that has been brought into the
market is refurbished property however it is highly probable that this may change as
the possibilities for reconstruction become
exhausted or tighter controls concerning the
transfer of residential buildings to commercial
use are implemented. Furthermore it is likely
that the nature of demand will shift requirements
to larger and flexible space, which cannot be
offered in old buildings. Nevertheless, the
market for refurbished historical buildings in the
city centre most probably will remain, because of
the high status implying location and prestige.
(two of the typical examples are illustrated on
fig.17-18.3)
Figure 23.3.A cultural heritage building used as a corporate house
for a world leading insurance company
8%
Market-leading
multinationals, banking and
14% In which rent band
39%
does your office fall? telecommunications began to
less than $5
$5 - $10
build and own their own
$10 - $20
greater than $20 facilities. Nearly 60% of the
stock is owner-occupied and a
39%
few of it are "built to suit"
facilities.
Figure 24.3. Current office accommodation. Rent band (survey findings)

Central locations will remain an attraction for the highest-level international activities
requiring face-to-face contact,
banking and financial
18
16 External appearance of building
16 institutions.
number of respondents
14 13 13 satisfaction with current

12
12 11
10
accommodation Location and the building itself
how importat it may be for you to move
10 9 9
from your current office
8 7 (see fig. 20.3.) (Construction
6
6 5 5
4
characteristics, layout, access)
2 1 1
satisfaction / importance
are main factors to define the
0
very
dissatisfied
4 very
satisfied /
core, which is intended to last
/ not at all very
important important as long as the building is
useful, perhaps 40 years or
more.
Figure 25.3. Current office accommodation. External appearance of building (survey findings)
Internal appearance (see for statistics

Internal appearance of building fig.21.3.) and layout are most often a
16 function of the kind of business and the its
14
14
context and aims, business and operational
12
12
needs sought to be achieved and satisfied.
10 9 9
8
8
(see for illustration fig 24.3.) It varies from
6
6 one company to the next and there is a
4
2
great difference between those who already
2
own one and those who consider new

0
very 3 5 very
dissatisfied satisfied corporate offices.
Figure 26.3.Current office accomodation. Internal appearance of building (survey findings)

The first group of the questioned, usually small

firms – sole proprietors (see fig. 23.3.) or
already established companies, whose
property has become an asset, fight with the
question how to get the best from what they
have. The second group seems to have greater
opportunities for implementing change – both in
work styles, operations, and even restructuring
of business. But whatever the circumstances,
the property solutions would derive from the
business plan and whether a business activities
do actually increase.
Figure 27.3.New office building surrounded by

existing and refurbished ones.
The survey shows that because of the stagnation, a few firms would chose to
change their office because of the increased activities and need for more space and
employees.
But with respect of potential changes both in
organizational and technological modes, those
involved in the design, delivery and
management of space should be prepared to
meet the following criteria: to reduce volume
and waste, to provide effective and efficient
healthy workplace, to support teamwork, to
promote communications, to give a flexible
layout, to support corporate culture, offer
opportunities for individual control and
amenity.
Figure 28.3.An entrance for offices in a residential building

Location characteristics, which had to be examined in the first part of the

questionnaire, were: proximity to
competitors(fig.25.3.), proximity to
customers/clients, proximity to
public car parking (fig.26.3.),
proximity to professional areas
(fig.27.3.), proximity to motorway
systems (fig 29.3.), proximity to
public transport (fig.30.3), prestige
(fig.31.3.), proximity to shops,
restaurants, etc (fig.28.3.).
Figure 29.3.An office of an air-ticket booking agency at the mezzanine of a residential building
Accessibility to markets and competitors (see fig.25.3.) is an important issue to be

discussed too. The inherited (before 1989) physical communications and
infrastructure, then reinforced by the government, are mainly in the central part and
Proximity to competitors along the highways known and referred in the
18 17 questionnaire as ‘main motorway systems’.
16
14
The new communications technologies are
13
12 not criteria for the investors and developers

10 9 9
8
decision upon location.
6
4
4
2
2 1
0
Not at all 2 3 4 5 6 Very
important important
Figure 30.3.Current accommodation. Proximity to competitors (survey findings)

Figure 31.3.Current accommodation. Proximity to public car parking (survey findings)
Proximity to public car parking Accessibility via public transport and car
20 19 parking (see fig26.3.) still remains one of the
18
16
most important. Though the historical central
14
parts of the city are overcrowded both with
12
10
8
9
8
pedestrians and cars, there are no restrictive
8 7
6
measures to private transport and parking and
4
4
at the same time there is insufficient space for
2 1
0 parking.
important important
Both employers and employees prefer to use own car and to park it in front of the
entrance of the office building.
Eating is the most formalized social activity. Companies located in the city centre
are seeing the business advantage to have their own, even if it costs money and
Proximity to professional areas
space. According to Raymond and Cunliffe
18
16
(1997) good subsidized food could promote
16 15
14
healthier eating habits and encourage staff to
12
relax and socialize with their colleagues and
10 9
8
8 usually leads to shorter lunch breaks. It also
6
expresses management’s attitude towards its
4 3 3
2 1
staff. Most used shops are delicatessen,
0
newsagent, hairdresser, and travel agent.
important important
Figure 32.3.Current office accommodation. Proximity to professional areas (survey findings)

Figure 33.3.Current office accommodation. Proximity to shops, restaurants, etc.(survey findings)
Proximity to shops, restaurants, etc.

For Sofia one would add perhaps bank office
25
and a small office for utility tax transfer. (see
21
20 fig. 28.3. for statistics). Furthermore, a
15
personal observation is that higher paid,
13
12
knowledge workers are now beginning to
10
8
negotiate for private offices or space during
5
2
the interview process
1
0
0
There should not be forgotten that there is not
important important
a single theory of location. The same is for
theories of rent.
Proximity to motorway systems
35
32
Developments in space are ‘part of the
30
general process of capital accumulation
25
based on social relations and their specific
20
16 forms at a particular point in time’. (Luithlen,
15
10
1993, p.43)
6
5 3
1
0 0
0
important important
Figure 34.3. Current office accommodation. Proximity to motorway systems (survey findings)
Figure 35.3. Current office accommodation. Proximity to public transport (survey findings)
Proximity to public transport
30
25
25
21
20
15
10
7
6
0 0 0
0
important important

‘Reception is where the company greets the world’ (Raymond and Cunliffe, 1997, p.
68) It is the first part of the company that most people see (see also fig. 32.3.). Its
Prestige
design, the transparence and reveal of the
18 17
style of work, the way of welcoming the
16 visitors – could be a prerequisite for a lasting
14
business relationship. Small offices usually
12 11
support entry-phones and larger ones – have

10
10 9
8
6 a security man, or receptionist. Stricter
6
4 3
security may involve gates, turnstiles, light
2
2
beam or doors – usually operated by some
0
Not at all
important
2 3 4 5 6 Very
important
type of card.
Figure 36.3. Current office accommodation. Prestige (survey findings)

Figure 37.3. Current office accommodation. Importance of entrance hall finishes (survey findings)
Offices are still subject to a variety of hazards

How important wouldquality of entrance hall finishes be to
16
you in chosing a new office?
15 15
– from bombs and fire to mice. Despite right
14 management policies, the fabric and systems
12
12
of the building have a decisive role to play.
10
Dealing with fire involves avoidance,
8
6 warning, escape, control, firefighting, and

6 5
4
4 recovery. Security risks could be divided into
2 theft from the premises and attack at them.
0
0 Proper control of the office perimeter1, easy
important important
informal surveillance and secure localized
storage makes management’s tasks easier.

Heating, cooling, ventilating and air-conditioning (HVAC) systems are responsible

for satisfying the demands for breathing and keeping our bodies at the right
Which of the follow ing do you use to ventilate temperature. Successful HVAC systems
your office
provide: comfort – fresh, clean and sufficient
45
40 amount of air, which means right proportions
35
30 of temperature and humidity and blocking and
25
20 removing pollutants; control – workers should
15
10 feel in personal control of their environment;
5
0 economy – meaning energy conservation both
Opening Electric Mechanical Air
w indow s desk fans ventilation conditioning
in terms of operating costs and social issues.
Figure 38.3. Current ofice accommodation. Type of Ventilation (survey findings)

People usually use ventilation as cheapest
Ventilation in office
way of getting fresh air by opening windows.

18
16
16
(See fig.33.3, fig.34.3, fig,32.3.). Sometimes,
14
however dust, traffic, noise or winds are
12
10
10 10
9
obstacles to natural ventilation. Air-
8 7 conditioning is essential in places where
6 5
temperature amplitudes are big through the
4 3
2 seasons. Deep buildings also need air-

0
very 3 5 very conditioning, especially atria and other public
dissatisfied satisfied
spaces in them.
Figure 39.3. Current office accommodation. Ventilation (survey findings)

Figure 40.3. Current office accommodation. Space heating systems (survey findings)
Space heating systems
Air circulation is important too – cooling and
16 15
freshening the air around people, air currents
14 13
12
purge the heat from the building fabric or gain
10 9 coolth from it if necessary.
8 8
8
6
As Guy and Shove (1994) and Guy and Harris
6
4
(1997) have noticed that buildings tend to
2 1
become ‘weather machines’ that provide a
0
very 3 5 very
stable, comfortable and ‘safely predictable
indoor climate that has become an

international standard’. In literature (Raymond and Cunliffe, 1997) there are plenty
of witnesses that through the 1970-s and 1980-s air-conditioned buildings were
associated with the top rental levels and blue-chip tenants. In order to reproduce
comparable rental levels, agents insisted on the inclusion of air-conditioning in
development schemes. The believes of the occupiers seem to have changed in the
1990-s: the separation of indoor and outdoor environment seems to be resource
consumable, health and welfare seem to be more important than comfort. In many
places around the world air-conditioning is still a sign privilege, further more as most
of the people want to be privileged, they tend to insist on air-conditioning even when
Level of natural lighting in office it is unnecessary.
16 15 People usually work in daylight (see 36.3.),
14
12
but for the part of the day it is usually
12
insufficient, and for some months of the year

10 9
8
8 8
it is too bright and hot. So, the theme of
6 5 lighting includes artificial light and sun
4 3
shading.
2
0
Different tasks require different amounts and
very 3 5 very
kinds of light.
Figure 41.3. Current office accommodation. Level of natural light in offices (survey findings)
Information technology (See fig.37.3 for statistics) usually implies the following
electronic systems for running the business, building management and the facilities
management. They share the objectiveness of operational efficiency, ease of
making change and energy efficiency to varying degrees. But indisputable common
matter that they share is cabling.
Cabling nowadays stuff walls, floors and furniture. Cordless technologies allow the
eliminating of some horizontal wiring and the improving the freedom both of the
workers and designer of interiors. The cordless systems have the following
advantages: they allow the use of old buildings that are difficult to rewire; increases
workers’ mobility, staff is no longer tied to their desks and personal communications
service give the telephone number to the person, not the place; tenants on short
leases do not have to invest in cabling systems; sometimes installation costs are
lower (According to Raymond and Cunliffe they are 10-15% lower, 1997); results in
fewer unanswered calls and therefore reduces return calls; mobile data transfer is
possible when PC-s are combined with notebook computers. Deficiencies should
not be underestimated: battery-recharging expenses on maintenance of generators,
slower speeds of transfers, questioned safety of radio microwaves.
Business systems cover different purposes – Voice: telephone, public
address, voice mail; Text: electronic mail, fax, telex, simple desktop publishing;
image: complex desktop publishing, computer aided design, audio-visual
presentation, video conferencing; data: data transfer, databases. The tendency here
is to leave wired up furniture in place, and to shift staff around.
Building management systems. The simplest ones include lighting and
HVAC, sometimes security and fire., the more complex ones do embrace the
following in addition: solar control,, demand prediction, access control, intruder
detection, lift monitoring and control. These systems should be robust, simple and
understandable, and provide clear feedback. ‘The truly intelligent system is clever
enough to allow humans to think they are in control of their individual environments.’
(Raymond and Cunliffe, 1997, p.165)
Facilities management systems benefit from the computerized building design and
operations – assembling and recording data during the design and fitting-out in a
way which would be useful to future operations, maintenance and adoption of
spaces.
40
36
Infrastructure for IT
35
satisfaction with current
30 accomodation
how important it may be for you
25 to move from your current office
how important it will be for you in
20 chosing a new office

16
15
15 13 13
12
11
10 9
10
7 7 7
5
5 3 4 3 3
2 1 satisfaction/importance to move/
0 0 importance to re-locate
0
very 3 5 very
Figure 42.3. Infrastructure for IT – current and future needs (survey findings)

Conclusion
We can draw a simple conclusion from the results in the first Phase of the
questionnaire, on which I believe agrees with intuition that staffs are becoming more
demanding of their work environment. In the late 1990s individuals worldwide, and
even in Sofia seems to want and search for more control in their lives where the
working environment is not an exception. What this means in functional terms is that
this most probably would result in increased cost per head to the occupier, or,
where the budget does not allow it – to higher occupational density and poor
environment.
If we have to summarize on 3.1., we should note that different elements of

buildings have different lifespans. Discussed elements so far were the shell, location
and the amenities of office buildings.
The shell, or in other words the structure, the core, the skin, is intended to last as
long as the building is useful – ranging from 25 – 50 years or more. Combined with
location this factor is decisive in the process of resource allocation and
management decisions.
Basic installations, building management systems and facilities management
systems will last 20 to 25 years.
Services at a small scale such as lighting fittings and electrical points usually
change with the scenery and must be capable of accommodating the shortest-term
requirements of the set.
3.2. The Organisation’s Current Occupancy and Basic Needs
Property development comprises contrasting commercial businesses each

sharing a stake in property but embodying profoundly different interests. These
differing interests are reflected in the contrasting organizational worlds property
actors inhabit and the different forms of ‘value’ that each organization seeks to
extract from the development process. Organizational settings make buildings look
very different when viewed from within.

Thinking of the current state of your businesshow importantit

In other words the design and
would be for you to move from your current office if more
flexible office layout is required development strategies of each organizational
12 11
actor has been shaped by these competing
10 10
10 ways of seeing organization and its culture. That
8
8 7 is the reason to view the property market as a
6 6
6
cultural entity, which is constantly being
4
refashioned by a host of related social, legal,
2
organizational, technological and economic

0
Not at all
important
2 3 4 5 6 Very
important
processes.
Figure 43.3. Factors for relocation. Flexible office layot (survey findings)
Figure 44.3. Factors for relocation. Business restructuring (survey findings)
Thinking of the current state of your businesshow

This changing development landscape
importantit would be for you to move from your
current office if your business is restructuring needs to be constructed, monitored and
14 13
constantly updated in order to provide a greater
12
12 11 understanding of the inter-linkages between the
10
8 8 actions of development professionals and the

8
6
organizational contexts which frame their
4
4 3 strategies.
2
The layout (see fig.38.3.) must provide
0
Not at all
important
2 3 4 5 6 Very
important for a wide range of functions: informal
exchange, formal areas for team/group work,
current office if your business is expanding
access to information technology and
19
company’s networks, flexibility to cope with
20
18
change in markets and shifts in the corporate
16 15
14
culture and organization. The layout of the
12
10
10 office environment id determined by the
8
6 5
4 4
building structure and service provision.
4 3
2 Therefore the decisive role here comes

0
Not at all
important
2 3 4 5 6 Very
important
to the designers, developers and managers
Figure 45.3. Factors for relocation. Business expansion (survey findings)

of workplaces who should thoroughly understand the operational needs in the

demand market thus responding to change without being driven simply by design or
technological determinism. That is the reason to include in the survey questions
Thinking of the current state of your businesshow about how companies are organized, in what
importantit would be for you to move from your current
office if your existing office is no longer suitable for
your company's image
branch do they operate and what would be
16
14
14 the criteria for choosing a new office.
12 11 Expanding of business activities (fig.40.3.),
10 9
8
restructuring of business (fig.39.3.), suitability
8
6
6 6
5
for company’s image, needs for flexible
4 planning for new IT (fig.37.3) – these are
2
factors that would determine the size, layout,
0
important important and need for differentiated spaces.
Figure 46.3. Factors for relocation. Company’s image (survey findings)

Figure 47.3. factors for relocation. End of lease (survey findings)
Demand for office space, is between 250 and

current office if your lease expires soon? 500 sq. m per office. A substantial portion of
25
21
the occupied stock represents short-term
20
accommodation. Length of leases is usually
15 up to 5 years (85 % of the asked companies)
10
10 10
versus 15 % for leases from 5 to 10 years.
6
5 94% of leases have a break option.
5
3 3
0
important important
Factors that had an impact on lease length included: the nature of the sub-market;
the quality of the building; local supply and demand; the needs of business; the
impact on valuation; investment and development viability.
Any occupier demand forecast in Bulgaria is of course highly dependent on the
macroeconomic situation in the country.

How important would length of lease be to you

in chosing a new office? Bulgaria's introduction of currency board
16 15
14
(1997) seemed to be a prerequisite for macro-
13
12
12
economic stability, but now it is not sure that it
10
has fueled enormous growth in the Sofia real
8
8
estate market. During the period 1996-98,
6
4
marked by the extensive rates of inflation it
3
2
2 1 was more profitable to rent and obtain short-
0
term financial results.
important important
Figure 48.3. Factors for relocation. Length of lease (survey findings)
Figure 49.3. Factors for relocation. Rent free period (survey findings)
How important would rent free period be to you

in chosing a new office?
Even when rent was at symbolic level, it turned
18
16 that it was better to get it than to maintain a big-
16
14 sized apartment in the city centre and to cover

12 12
all taxes for maintenance and amenities –

12
10
8 electricity, telephone, central heating and the

6
6 5
constant rise of their cost. (Todorov, 1996,
4 3 3
2
p.20) This situation of oversupply lead to a
0
situation that the occupiers began to seek
important important
betterment and options, e.g. they paid attention

to the entrances of the building, and of course to the size of the apartment which
would be occupied for office – offices of small size were welcomed because of the
lower maintenance cost but higher rent. (Velichkov, 1996, p.20)

How important would rent level be to you Occupational and lease features which the
20 19 survey examines are: rent level (fig,45.3.), a
18
16
rent free period (fig.44.3.), a cash inducement
14
to move (fig.47.3.), length of lease (fig.43.3),
12 11
10 availability of break options (fig.49.3.), service

8
8
6 5
6 charge for maintenance (fig.48.3.).
4
4 3
Firms may have a stable requirement for their
2
0 core workforce, but the shifting peripheral

important important
workforce requires a less rigid form of tenure.
Figure 50.3. Factors for relocation. Rent level (survey findings)

Figure 51.3. Factors for relocation. Current state of business (survey findings)
This should indicate the development of

current office if cheaper rents are available elsewhere shorter leases, growth in the serviced office
30
26 sector and possibly new tenure forms. Thus

25
one might expect to see a more diverse, less
20
standardised pattern of lease contracts. This
15 13
has major consequences for valuation
10
6
7
methodology. Standard valuation method rely
5 3
2 2
on comparable evidence and the ability to
0
Not at all
important
2 3 4 5 6 Very
important
make adjustments for differences in building
form, lease or tenant covenant.
Figure 52.3. Factors for relocation. Cash inducement (survey findings)
How important would a cash inducement to move be
to you
16 in chosing a new office? Standardization facilitates this process,
14
14
12
diversity makes it much more complex. The
12
greater uncertainty introduced by the plethora

10 9 9
8
of lease contracts, lease lengths, break
6 5 clauses, tenant incentives cause major
4
4 3
problems for traditional valuation techniques.
2
0
If valuation models give the wrong signals to
important important developers and investors, then the supply-

side response to changing demand may be inappropriate.

Equally, occupiers must recognize that uncertainty has a cost, which must be
How important would service charge be to you shared between users and suppliers. For
30
adjustment processes to be smooth, pricing
25 24
models are needed that can identify
20
appropriate rental levels and appraise
15
investment. Foreign investment has been
10
10
8 limited to providing development or acquisition
6
5
3
4
for owner-occupation The latter represents the
1
0 next stage of the process.

important important
Figure 53.3. Factors for relocation. Service charge (survey findings)

Figure 54.3. Factors for relocation. Break options (survey findings)
break options
20 Although investors are potentially
18
18
attracted by high yields, uncertainty about
16
14 13 political and economic development and

12
inadequate knowledge concerning local
10
8
8 planning procedures and the legal/institutional
6
6 5
4
4 background for real estate pose a high risk for
3
2 institutional investors.
0
important important
Figure 55.3. Factors for relocation. Length of lease break options (survey findings)
In how many years is your lease break option? Conclusion

14 13 Most of the occupiers battle between
12
meeting comfort and the need and
10
8
willingness to reduce cost through greater
6 5 energy efficiency and rent levels. Sofia,
4 3 3
especially its central part, still possesses the
2 1 1
0
characteristics of an emerging market in
5 years 1 year 6 yyemonths 3 months 1 month
4 months which there is the involvement of
international companies largely in the occupier rather than the investment market.

3.3. The Organisation’s Future Office Requirements
“It is used to be simple: writing was done with a pen on paper. Now it is also done with a
keyboard and a computer. Soon it will be spoken to the computer and converted into text
that way.” (Raymond & Cunliffe, p. 36)
The focus of this part of the research is hypothetically to test whether in the
era of radical corporate structures, emerging markets and new technologies, the
accepted norms of what work is, and how it is undertaken, will be turned upside
down.
Figure 56.3. Future office requirements. Activities over the last three years (survey findings)
3%
Has the activity Many authors talk about the
of your office
33% increased over demise of the office – Harris (year –
the last 3 years? unknown) argues that there has
yes
no never been a greater need. What are
64%
don't know
required are new settings to support
the knowledge worker’s creative well
being.
2%
The office is doomed in case
7%
51% the future real estate strategies are
only driven by the need to cut costs
The office is:
The sole office of your
company
and defend existing paradigms. The
The head office
40%
future of business real estate is to
A regional office
shift from its being merely a tradable
A support office
paper asset into an operational

asset to support performance.
Figure 57.3. Future office requirements. Type of office (survey findings)

Harris defines four basic business functions of offices: a place of work, a

systems infrastructure, a focus for cultural interchange and a financial opportunity.
Figure 58.3. Future office requirements. Hot-desking (survey findings)
7%
Although it is reducing costs and
Hot-desking contributing to changing work
yes
27% no
practices, hot-desking (fig.53.3.) is
don't know
suitable for certain types of work,
industry sectors and may vary
66%
between companies. Most often it is
observed that those who are asked
to hot-desk do need clearly defined and tightly managed jobs.
Speaking of workplace, one could assume that IT creates the ‘virtual office’. This
changes the nature of demand for space and at the same time the changed
requirements for building configuration dictated from the need for permanent office
organization or organization of main office where mobile teleworkers, home workers
only meet to coordinate. In this
23%
sense offices are still meeting
Tele-working
points for groups, rather than fixed
yes
46%
no workplaces for individuals. This last
don't know
will most probably affect internal
circulation spaces (see fig.54.3.for
31%
statistics).
Figure 59.3. Future office requirements. Tele-working (survey findings)
The process of shedding labor is said to have created a core-periphery structure in

the workforce. Core skilled workers, central to the firm’s activities, are employed on
full-time contracts.

The core workforce are said to be “empowered” in that decision making is devolved
downward and team-working takes the place of individual supervised tasks. The
peripheral workforce is employed on a more informal basis through sub-contracting,
self-employed, short-term contract and part-time basis, devolving risk away from the
firm onto the individual. More positively, out-sourcing provides the opportunity for
new firm start-up, development of
11%
niche products and services, while
Touchdown
part-time, self-employed and
18%
contract work may be tailored by
yes
no those unable to work on a full-time

don't know
basis away from the home. (see
71%
fig.55.3.)
Figure 60.3. Future office requirements. Touchdown (survey findings)
It is possible to identify four types of impact that such trends seem to have on
the property market: change in the overall quantity of space required, change in the
type of space required, change in
leasing arrangements and impacts
25%
31%
on valuation. Intensification of use
through office hotelling (fig. 56.3.)
Hotelling and hot-desking (fig.53.3.), the
yes growth of the “virtual office” and
no
don't know
home working point to reductions in
44% the aggregate demand for space.
Figure 61.3. Future office requirements. Hotelling (survey findings)

To w hat extend adoption of the practices of This aggregate change in

telew orking, hot-desking, touchdow n and hotelling
by your office w ill change requirem ents for space?
demand will vary spatially as
10% locational advantages ebb
22%
and flow. It is possible for
10%
More floor space
flexi-time and virtual working
between them to eliminate
3% Less floor space
the morning and evening
No change in floor
space surges of workers which will
Haven’t considered the reflect the design of main
implications
No response circulation routes and
55%
entrances.
Figure 62.3. Future office requirements. New working practices and space requirements (survey findings)
Figure 63.3. Future office requirements. Current use of computers (survey findings)
Information technology is
2%
likely to influence the
What percentage
28% specification of office space
of your workforce
have their own (fig.57.3.) but, as the rise
36% computer terminals?
and fall of the large
Less than 25%
floorplate-dealing floor
25-50%
50-75% shows, office requirement
More than 75%
change rapidly (fig.58.3.,
no response
17%
fig.59.3., fig.51.3.). This
17% implies that the key to office
specification is flexibility: the ability to change configuration. Teamworking
emphasizes that need. Outsourcing, delayering, downsizing and the focus on core
business might suggest that there will be a decline in demand for larger buildings
and an increase in demand for smaller buildings or parts of building. This in turn
may increase multiple occupation.

In how many years time do you forsee your

implementation of the new working practices?
25
tele-working
21
hot-desking
number of respomdents
20
touchdown
15 hotelling
15
11
10 9
8
6
5 4
2
0 time period
now and up to 1 year from 2 to 5 years
Figure 64.3. Future office requirements. Adoption of the new working practices (survey findings)
Hotelling (fig.56.3.) can be either little more than hot-desking for visiting employees
or it can be a full service where some of the employees have no their own space. It
is still a rare phenomenon for the city centre to find a property developer who would
offer offices as ‘hotels’ for multiple occupation, where services could be provided
under hourly, daily or monthly licenses. Undoubtedly hotelling offers benefits to the
organizations but it also offers few benefits for the individuals, which have not been
recognized yet.
But the processes are reversible and an interrelation between different factors
exists. As an example, consider the impact of home working on the home itself. If
workers are increasingly to work from the home, what does this mean for the design
of houses and for the size of houses required. Who will pay for the additional space
required? If this falls on the worker, what does this mean for the real wage level?
Literature on labour markets, social equality, residential development and new
working practices needs to be juxtaposed to shed light on this question.

The new working practices and IT affect only small proportions of a given firm or
sector’s workforce. The exploration of the case studies proves that office
intensification has been dominated by client focused business services suppliers, as
well as accounting, management consultancy, IT and computer software
developers. For other activities the traditional office as a people factory seems still
to remain a norm.
IT activities have also a visible impact on the retail sector, banking and financial
transactions as reducing the demand for space. On other hand these developments
create demand for extra source where data processing takes place.
Summarizing the property implications of IT, it seems that changing business 9
practice may reduce total aggregate demand for space as well the type and location
of the property required. Flexible work practices would most probably require more
flexible market structures and greater variety of provision.
As Hall, (1993, p.889) notes ‘in the US, the very widespread development of
the ‘Edge City’ or ‘Suburban Downtown’ phenomenon can be attributed in part to
improved telecommunication, associated with access to suburbanized labor forces
and lower office rents’. So far it appears that this kind of office centres is less
developed in Europe, with a few exceptions – Reading (outside London), the
London and Paris new towns, The E4 Arland corridor (outside Stockholm) and City
Nord (Hamburg). Here the relationship with transport technology plays a crucial role.
In US developments inevitably depend on the private car as a basic means of
commuting, whereas in Europe and especially in Bulgaria, the tradition is to group
them around public transport interchanges.
Here we should note something, which is not of less importance: despite
decreasing costs, telecommunications are never entirely free because of the
monopoly of The Bulgarian Telecommunications Company. Finally, but not last the
uneven development of infrastructure and amenities for using new IT within the
different parts of Sofia municipality, most of the firms prefer the central location of
their offices because of the best opportunity to obtain the mentioned above even at
the expense of higher cost and necessity to repair old and torn out infrastructures.
Conclusions
The changes in management have an impact on the use of property. The practice of
permanent work place seems to no longer be the only way of occupation. Hot-
desking and touchdown and hotelling have been increasingly becoming effective
and efficient ways of utilizing space without introducing the need neither for more
space, nor for less, as well as not foreseeing changes in the number of employees.
Sometimes the more sophisticated and widespread use of technology seem to pose
the notion that location no longer matters. To some extend it is true – the networks
may make the ‘virtual meeting’ possible, but as we noticed in the first stage of the
questionnaire, and as the geographers as well state it, similar businesses like being
near each other. Even competitors do want to be in close locational proximity. For
example teleconferencing, telecommuting and the information flow from the net may
have an important role to play but there are still synergetic benefits to be gained
from the physical proximity.
The impacts of technology are both centralizing and decentralizing. The increasing
level of automation enables most probably would reduce the amount of office jobs,
but IT also generates new activities and creates a need for renewed level of
concentration mainly in the banking and finance, advertising, marketing, etc.
In conclusion, 3.3. found out that the set and the scenery as elements of
office buildings are in close relationship with organizational needs.
Scenery, including the partitions, space groupings, furniture and furnishings is
related to the life of the tenent or to the particular stage of an organization’s
development, lasting perhaps 5-7 years or less. This is the easiest way both to
creation of atmosphere which would encourage better work, and image that would
show that better work is being done within the organization.
The set discussed in Section 3.3. relates to the constant rearrangements of office
scenery to meet changing short-term needs of the organization. The time scale is
sometimes measured in weeks.

Summary on Section Three
At the beginning of the transition developers operating in Sofia reacted the growing
demand for office space by refurbishing old offices, residential buildings along with
the construction on green field. Due to scarcity of available office space, extremely
high prices of rents have been achieved.
A close exploration of the data from the section “The organization’s current office
accommodation suggests that the nature of demand will most probably shift
requirements for larger and more flexible spaces, which cannot be offered in the old
buildings. On other hand, the demand for refurbished historical buildings will be
probably retained because of the locational characteristics and prestige offered by
these buildings. Central locations will retain the rate of attractiveness especially for
activities of international importance requiring face-to-face contacts.
Small firms usually fight with the question how to get the best from what they
already posses, while corporations and larger organizations have greater
opportunities for implementing change in work style, operations and business
restructuring. Findings from the survey indicate that a few firms would chose to
change their office due to the economic stagnation.
It seems that new technologies are not a criteria for the investors’ and developers’
decision upon location.
Spaces for socialization, car parking and easy access via public transport are
locational advantages, which the city center offers.
Security facilities range from entry phones to light beams and encoded cards.
Further more, control and security seem to make management tasks easier.
Speaking of HVAC systems, one should mention that no matter that health and
welfare seem to be more important than comfort, workers in Sofia still prefer to be
‘privileged’ thus insisting on air-conditioning facilities even when it is unnecessary.
Business systems, Building facilities and building management systems facilitate
operations and maintenance and adoption of spaces.

Staffs seem to become more demanding of their work environment. This would most
probably lead either to increased cost per head per occupier or would result in
higher occupational density and poor environment.
The analysis of organization’ current occupancy and basic needs finds that each
organization seeks to extract different forms of ‘Value’ from the office development
and occupancy. In most of the cases the layout is closely related to organization’s
functions. Flexible layout is most often required in order to meet operational needs.
Expanding of business activities, restructuring of business, suitability to company’s
image, needs for flexible planning for IT – these are the factors which determine the
size, layout, and need for differentiated spaces.
The section concludes that while there is evidence for change in the Bulgarian office
market due to changes in technologies and organizational alterations, the change is
not as dramatic as one could suggest. Firms are at very different stages in the
adoption of new work modes, leading to a gradual evolution rather than a revolution
in demand for space. As a result, change tends to be dominated by the economic
cycle. Macroeconomic indicators influence the uncertainty and variability of lease
contracts, lease lengths, break clauses and tenant incentive. At present, occupiers
are about to recognize that uncertainty has a cost, which must be shared between
users and suppliers.
The section ‘The organization’s future office accommodation’ starts the discussion
with stating the dilemma for demise of office versus the need of physical office as a
place, showcase, stage and symbol.
The new working practices change the nature of work and therefore the demand for
office space. At the same time requirements for building configuration are changed
too. For some industry branches offices are merely a place for work coordination.
New working practices and organizational changes tend to affect also the type of
space required, the leasing arrangements and valuation techniques.
Although businesses nowadays may be flexible and mobile, the office buildings still
cannot. The office still seems to reflects company’s wealth, its values and attitudes.
Visitors and workers still ascribe it to company’s tangible image. It provides the
stage on which the more static elements of the company perform for their
customers, staff and community. Even It and telecommunications in Bulgaria are still
bound to location because of the monopoly of their service provider. That is another
reason for firms and organizations to seek central locations – here they gain the
best opportunity to obtain easier but sometimes more expensive access to certain
services.

4. DISCUSSION
As stated in the previous sections (especially Section two, where methods and
techniques have been discussed), this investigation is a mix of both quantitative and
qualititative research. This is the reason to evaluate the outcomes in dual aspects.
This section deals with justification of the conclusions of the study in terms of
internal validity and credibility, external validity and transferability, reliability and
dependability, objectivity and confirmability.
4.1. Internal validity and credibility
The internal validity of the data received through the questionnaires could not be
calculated statistically, as the interviewed were selected by means of a judgment
quota sampling. The reasons for this sampling technique have been discussed
already in section two. Therefore the results from this marketing research are
relevant to the respondents’ perceptions and no further generalizations are
acceptable.
A useful implication from this survey could be the analysis of occupiers’ responses.
It could be discussed in several terms. First, the majority of responses is from those
organizations, interested in the results and perhaps utilizing them. Therefore they
seem to be interested in the processes that are to determine future demands and
trends of accommodation. Second, there are respondents, which do not want any
further information about the survey. Here they could be referred as facilitators of
transparence and information flow.
‘Since from this perspective, the purpose of qualitative research is to describe or

understand the phenomena of interest from the participant's eyes, the participants
are the only ones who can legitimately judge the credibility of the results.’ (Trochim,
1999). The fact that most of the respondents have shown interest in the results from
the survey suggests that they might be asked for feedback. As time and recourses
of the research were limited, it was not possible to mind the participants’ judgment.
But this possibility to check credibility is still open for the researcher in case of
further work on the problem.
4.2. External validity and transferability
Although some literature is available on demand-side analysis of the office

property market among various groups of researchers in different parts of the world,
there is no evidence for such a marketing research conducted in Bulgaria. Therefore
the present dissertation was focused on the establishment of acceptable
methodological framework, which would possibly direct to the establishment of a
broader property research agenda within a broader territorial boundaries, and even
as a part of a comparative research. Further more, the rationale, as stated in section
two, has been influenced by the British practice (Dent, 1997). No matter that the
economic contexts and physical context as built environment and locations are
known to be different, a perspective to compare and test attitudes towards
occupational and lease aspects still exists.
Another prospective brought from the findings of the research is to use the
methodology in order to compare the demand for office space in the Sofia city
center and this in the so-called ‘out-of-town’ locations. A conduction of similar
research, including a survey is also possible for different locations and similar
economic context on the territory of Bulgaria (for example for Plovdiv, Varna, etc.)
Because of the specific characteristics of office accommodation, the use of
the suggested framework – methods and techniques it is not recommendable for
investigating other types of accommodation (housing, commercial, retail).

4.3. Reliability and dependability
There is much work still to be done here, as this paper has been focused on a
restricted number of actors from the property market in the city centre of Sofia.
Reliance on the measures obtained must be tempered, because there were neither
control groups nor variety of measures (present and future) in assessing changes in
satisfaction and rating of factor’s importance. Because a high degree of variability
was found in the data, it would be beneficial to replicate the study on larger and
different occupiers.
It would also be interesting to measure satisfaction over several periods of time
instead of one real and one future hypothetical situation. But here another fact
should not be underestimated: it is impossible to observe and measure one and the
same thing twice in real life situations. Thus the idea of dependability emphasizes
the notion that the researcher should be conscious of the ever-changing context of
the research.
In this context, the reconstruction of “TZUM” is an outstanding example for the
changes that have been celebrated for the last year (1999) and which have affected
the way and duration the research, approached the study.
An outstanding example is the reconstruction of the biggest department store in
Bulgaria – the Central Department Store (popular in Bulgaria as “TZUM”) in Sofia.
The remedial works started in January 1999 and finished in March 2000. Office
space has peen organized on the 5th and 6th floors, including the main office or the
main shareholder of the building “Reagents Pacific group”. The office spaces range
from 100 to 800 sq.m. Additional interior changes and partitions are not restricted.
The monthly rent varies from 22$ to 28$ per sq.m (vat is not included). The offices
are provided with lighting, air-conditioning, and infrastructure for IT (including
Internet). Furniture and furnishings are not offered in the initial rent figures, but a
possibility to use consultants from “TZUM” for the interior design. “TZUM” is also
responsible for the support and maintenance of the information systems, as well as
for the maintenance and cleaning of the offices. Telephones and computer
networks are included in the standard pack, wears additional elements of the
business system and facility management are complementary charged. The minimal
lease period is 5 years. There is a supermarket in the basement, shops, fast food

restaurant, cafes and two bank offices on the 1st, 2nd and 3rd floor. The offices in
“TZUM” refer the European standard of office space (according to the Economist,
cited in Capital newspaper) in the central city zone.
“TZUM” has been picked as a case study for the scale of the building and diversity
of spaces offered for rent. Another reason for picking up this example is the short
time period of the reconstruction and modernization of the building.
4.4. Objectivity and confirmability
This study suggests that the framework and the results may have a favorable
impact on performance and satisfaction both in public and private sector agencies
as well for consultancy groups.
Confirmability refers to the degree to which the results could be confirmed or

corroborated by others. The results and comments taken from secondary sources
of information are not disputable, as the majority of them are published materials.
The filled and returned questionnaires and interviews based on the questionnaires
have been entered into a data bank. A questionnaire sample has been attached at
the end of the study description (see appendix). The rest of the questionnaires are
available on request.
The process of data collection is not insured from biases. As marked in section two,
(2.3.1.) non-response to the questionnaires may be indicative of a certain attitude.
The non-randomness of the quota sampling (the advantages and shotcomings of
which have been largely discussed in 2.3.4.) has also increased the risk of distortion
of the samples drawn.

Summary on Section Four
The results from the present research are relevant to the respondents’ perception.
The possibility to check credibility remains open for further work on the problem.
In terms of transferability, the research framework is applicable for similar studies on
demand in office sector in other Bulgarian cities or broader territorial boundaries for
Sofia. As the rationale for the survey construction has been influenced by British
practice, the proposed framework does not exclude a comparative research,
including European cities with comparable demographic and economic
characteristics.
Speaking of reliability, the results and variability of measures pose the need of
further replication of the study on larger and different occupiers.
In this investigation, dependability has been treated as dynamic change in context
between two definite situations over time.
The research claims for objectivity and usefulness of data, analysis ad conclusions
for private and government agencies, design teams and developers.
Nevertheless that the study claims for confirmability, some of the data remain
disputable and open to biases.

5. CONCLUSIONS
This research is to suggest that change is now occurring. Lease lengths have fallen
and it is unlikely that there will be a return to the very long term. More importantly, a
far greater variation in lease contracts both in length and in the terms and
inducements offered has been observed. New working practices do place
downward pressure on demand for business space, although this is gradual rather
than sudden. At the same time they influence the locational requirements and, in
particular, the internal configuration and specification of buildings. The final
conclusions and comments on the present investigation are grouped in five
sections: business reorganization, actors in the office development sector and the
specific role of planners and urban designers , the influence of IT and
telecommunications, office markets and change and implications for future office
development in the Central city zone.
5.1.Business reorganization
Business reorganization and the emerging of satellite information processing

centres (call centres and some kinds of representative offices for example) blur the
distinction between office and warehouse space, making sector boundaries fuzzy,
permitting substitution between user types. Core-periphery labour market
relationships are creating core-periphery operational property market requirements,
with demand for more flexible tenure arrangements for the peripheral needs.
Markets for office space, then, are changing but the process is evolutionary rather
than revolutionary.
The new wave management theory has been discussed in terms of its terminal
impact on the office. Accommodation described as ‘flexible’ is viewed as a means of
the companies to achieve the objectives of their business plan. Recently the cause

and effect have been blurred and often confused, therefore recognizing the diversity
of management structures and work processes and the possibility to devise a wide
range of workplace solutions able to respond to different demands becomes aim of
the day.
5.2.Actors in the office development sector
In order to extract ‘value’ in this new development landscape and processes of

building provision and use, actors have to re-think their design and development
strategies. Thus, if we have to summarize, for the role and responsibilities of the
different actors, we should note that:
 Architects are better able to offer highly efficient designs which evoke a sense of
place;
 Developers are seeking to cut development cost by trimming specifications and
providing alternatives to full environmental control;
 Occupiers are looking to exploit opportunities for procuring efficient, healthy
workplaces;
 Investors are attempting to identify market-friendly buildings which provide both
utility and flexibility;
 and agents are looking to understand and capitalize on new occupier trends.
Depending upon market conditions, some actors have more influence than others
do. In cases when demand exceeded supply a lease structure gives total security to
landlords; and a huge volume of available capital, materialized in a specification that
far outstripped typical user need and carried a high environmental impact.
Occupiers and architects have little power to influence this process. Finally, agents
sell their services as arbiters of the ‘market’, comparing letting rates and rental
values of newly available or recently let buildings. By their knowledge of the ‘latest
deal’ they are able to make introductions to potential occupiers or investors, so
shaping demand. Value is extracted not only via fees, but also through their control
of market processes and information. Major features include greater diversity of
lease forms and a blurring of distinctions between use classes. But it still seems that

institutional structures in the property market act as a constraint to change and

adjustment.
Here the specific role of planners and urban designers in the process of office
development should be briefly discussed.
The property business incorporates a range of business actors. Each one of them
seeks to extract different forms of ‘value’ from the development process. Therefore
design decisions are most often the result of continuous interactions between
competing development interests. The transition towards market economy, the
global economic crisis, the liberalization of the building initiative and the
democratization of the public relations in Bulgaria direct the responsibility of the
urban planners not at indicating (or creating) the ‘ideal’ spatial solutions of the
problems. They should take the challenge to act as mediators in the arduous
dialogue between all interest groups involved in the construction and improvement
of the environment. Finally, but not last the design specification brings together the
diverse strategies that crystallize in the material form of a building.
By examining office needs the research revealed a range of new development
priorities emerging from wider design concerns. The emergence of these design
priorities enables the development of design scripts revealed in the development
process, extending and embedding assumptions about desirable design.
In this context office buildings could not be viewed simply as technical structures,
the design quality of which could be related to an external definition of accepted
environmental standards only. The research suggests we can begin to locate
opportunities for environmental innovation and by identifying how new design
priorities take root in changing development practices.
5.3.Information technologies and demands for office space. Information infrastructure

within the urban structure
The results of the present research, and especially the study about the need and
desirability of IT in office space line with Graham’s (1997) debunked myths about
technological determinism, urban dissolution, universal access, simple substitution
of transport by telecommunications and local powerlessness.
Current and future urban changes seem to be a consequence of the technological

changes in complex. The process is non-linear and non cause-and-effect.
The myth of the urban dissolution says that ‘cities are liable to simply dissolve, as
new telecommunications technologies allow urban functions to decentralize in a
world where all information will be available in times and places to all people”.
(Graham, 1997, p.22) Cities and telecommunications tend to stand in a state of
reverse interaction, shaping each other in complex and diverse ways. Cities are still
the arenas that bring together the increasingly globalized economic, social, cultural
and institutional life within specific places, and the advances in IT merely help
further this process both by supporting new levels of complexity in linkages and
allowing cities to further extend and reach global markets.
The myth of universal access is disputable in terms that social access to new IT and
services “will somehow diffuse to be truly universal and equal” (ibid. p. 24). This
suggests the introduction of greater social fragmentation and polarization within
cities.
The myth of simple substitution of transport by telecommunications is based on the
assumption that “telecommunications offer clear, dematerialized solutions that will
offer simple substitution for the material ills of community and pollution in physical
spaces”. (p.25) Practice, however shows that transport and telecommunications
tend to grow together, being mutually reinforcing. Substituting for travel, IT can
actually generate or induce many demands for physical movement; and the
substitution of travel by teleworking, telecommuting, tele-shopping (or simply by
reducing travel) creates time for increased travel for other purposes (e.g. longer
leisure, shopping trips, etc.). Finally but not last IT contributes towards the increased
efficiency, safety and attractiveness of different transport needs.
Local powerlessness means that local social and political actors in contemporary
cities have little or no scope to shape telecommunications developments within
cities.

5.4.Office property markets and change
Is it possible for the property market to act as a barrier to change? The

correctly price differences in lease contracts, the added uncertainty that a more
volatile economic environment brings should be considered as main factors. These
factors have impacts for development appraisal, for funding and financing,
investment and property portfolio performance. Therefore they lead to supply-side
restrictions. Inappropriate pricing models usually make it difficult to assess claims
made about the impacts of policy and legislative changes on the property market.
The development of more adequate pricing and valuation models capable of
handling the greater diversity of leasing forms, then, must be a priority. With those in
place, supply side restrictions will most probably dissipate. There are major
institutional constraints to change as professional practice standards, legal
precedence and the educational background of practitioners. There is a danger that
the gulf between theoretical developments and actual practice will widen further if
this process of communication does not take place. The process of change could
become more problematic due to inertia, resistance, and conservatism – and
uncertain quantitative skills.
5.5.Implications to the urban problems of the Central city zone of Sofia
Business centers of cities are usually associated with the image, prestige and living
standards. It is suggested that the analysis and data of this investigation could give
several ideas in the preliminary stages and preinvestment studies.
First of all demand of sites for office development and especially their location could
be characterized as follows: the most desirable locations are at main shopping
streets, traffic junctions, places which ensure easy access, benefits from the
economies of scale, proximity to professional areas and to which prestige has been
ascribed. Though the research does not clime for validity and objectivity, one
should mention that the south-east and south-west parts of the city center are more
desirable for new office construction than the south ones. As for the refurbishment

and reconstruction – it seems that there are not specific trends. Major institutions –
government and corporate occupiers (financial institutions, trade offices, etc) have
already reserved the representative sites. In this sence, there is much to be done in
order to transform their landscape and surroundings into a multiple function spaces.
In conclusion one should note that urban problems could not be defined as
economic only; number of offices, office space, housing, urban landscape,
reclamation and environmental improvements have permanently to attract
investment; Infrastructure, business, relaxed planning requirements and bypassing
planning regulations should be the main aim in order to attract business. Activities in
offices are not separated from life. Further more, activities besides offices:
commercial, residential, hotels and conference centres, attractions are ‘adding
value’ to the offices. This could be either revitalization of dead time and dead space
– by traffic calming, evening and late night public transport, good street lighting,
security, child care, personal and community development participation; or making
an area more attractive for housing; or attracting additional investment for
development. It could be the mix of all mentioned above, thus putting in action all
the buzzwords of Urban Regeneration coined by Michael Hesetie: Partnership (a
key word for all initiatives of urban development and redevelopment which implies
people to be friendly, to avoid previous mistakes), Strategy (the overall direction of
project, a main tool at coordinating the main actors and statement of long-term
aims), Leadership (coordination, direction, inspiration), Management (introduction to
public policy, city challenge initiatives), Community (public participation from the
very beginning of the design process).

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OCCUPIER NEEDS FOR OFFICES i

Title: OCCUPIER NEEDS FOR OFFICES

Student: Milena Tasheva

Submitted for: MSc Urban Planning and Housing

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

The approach adopted for this study follows five stages:

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

Title: OCCUPIER NEEDS FOR OFFICES __________________________________ i

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

List of tables, pictures and figures

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

Aims of the Dissertation

Within these broad aims, the specific objectives are:

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

1. THEORY, BACKGROUND, SITUATION, LITERATURE

1.1. Literature Review

1. Historical office development. The office as archetype

1.1.1. Historical office development

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

Figure 2.1. Grids in offices (Ellwood, 1976)

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

Figure 4.1. Organizational scenarios,

(Raymond and Gunliffe, 1997)

The era of radical corporate structures,

globe), complemented with concentrations of formal and informal meeting places.

1.1.3. Suggestions on the better functioning of the office

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

waiting to accommodate whatever change is happening now or tomorrow). (

Figure 5.2. Eighty years of change (Harris)

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

1.2. Property and Rent. Maturity of Property Markets

Both institutional and private investors recognize property as an investment

shows that market information encourages national and international participant

1.3. Property and Location

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

Increasing locational flexibility results from developments in informatics. At a macro

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

1.4. Property and Urban Development

The actors in the development process require a clear understanding of how

1.5. Property and Research Methodologies

Mapping the changing context of office development requires a more qualitative

Sofia, the only city in Bulgaria with a million populations, is by tradition

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

If we have to summarize, City structure under socialism reflected the process of

commercial activities (60%), manufacturing (10%), construction (6,5%), transport

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

Summary on Section One

Section one deal with theoretical concepts on office accommodation. Archetypes

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

2. METHODOLOGY OF THE RESEARCH

2.1. General Methodology

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

2.2. Special Methodology

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

 National Statistical Institute

University of Lincolnshire and Humberside, IM3P - Urban Planning and Housing

If one has to summarize, property markets as a ‘complex system in which the