Collective Investment Opens Access to Premium Real Estate

Collective investment in real estate is gaining momentum on the Bulgarian market, opening the door to the premium property segment for a wider range of investors. The model allows a number of small and medium-sized investors to pool their capital and participate in projects that would traditionally require a significant financial resource.

The topic was discussed by Krasimir Krastev, Managing Director of Quart Fund, in the programme Business Start hosted by Roselina Petkova.

According to Krastev, the concept is essentially a form of real estate investment that enables a group of people to combine their resources and invest on equal terms. This gives them access to a much broader market than they would normally be able to reach individually.

The Road to the First Licence

Krastev explained that introducing this model in Bulgaria required a long process of aligning European regulations with local legislation.

He noted that the challenges were significant, as the European framework for real estate investment was not fully reflected in Bulgarian law. The company spent nearly two and a half years working alongside the Financial Supervision Commission to create a structure that would be safe, transparent and secure for investors. After almost three years, Quart Fund obtained the first licence of this kind in Bulgaria.

Interest in such platforms is increasing, with new market participants appearing almost every month. Krastev also pointed out that the period of very low deposit interest rates encouraged many people to look for alternative investment options, with real estate remaining one of the preferred assets.

How the Model Works

Collective investment is based on fractional ownership. Instead of purchasing an entire property, an investor can participate with a smaller amount corresponding to a share of the project.

“Our model is very simple. We divide the property into square metres and sell from one square metre upwards,” Krastev explained. “Our investors own securities that give them direct ownership over the respective fraction of the property.”

This structure allows investors to gain exposure to premium real estate without the need to acquire an entire asset independently.

The Premium Segment Remains Resilient

According to Krastev, the high-end property segment in Bulgaria continues to show strong resilience. Buyers in this segment are often less dependent on bank financing, while the supply of quality properties remains limited.

“The high segment is the one that, over the past 10 years and more, has not seen a slowdown in price growth,” he commented. “At the same time, properties in the high segment are still very limited, and demand significantly exceeds supply.”

To minimise risk, the company works with carefully selected properties and developers.

“We have chosen a framework of the top 10 developers in Bulgaria — those who build only in the best locations. We follow a long list of criteria when selecting projects,” Krastev added.

Transparency and a Secondary Market

Transparency is a key element of the model, both in terms of costs and profit distribution. When a project is sold, the proceeds are distributed proportionally among the investors.

“There are no hidden interest rates, no hidden fees, nothing extra,” Krastev said.

Another important feature is the opportunity for a secondary market, which could address one of the main challenges in real estate investment — low liquidity.

According to Krastev, the secondary market helps solve the second fundamental problem of investing in the premium segment. The first is the high entry price, which is reduced through fractional participation. The second is liquidity.

He also commented that a possible cooling of the market could create opportunities for long-term funds. With an investment horizon of two to three years, such funds may gain access to better projects at more attractive prices.

Investor Risk Profile

European regulations require an assessment of each investor’s risk profile. At Quart Fund, this evaluation is based on income, expenses and exposure to financial institutions.

“While the European regulation only requires us to warn investors if their risk profile is unsuitable, we allow ourselves to restrict them, because our interest is the interest of our investors,” Krastev said.

Collective real estate investment is gradually changing access to the premium property segment. By combining a lower entry threshold, a regulated framework, transparency and improved diversification opportunities, the model is creating a new path for investors seeking exposure to high-quality real estate assets.

The published article is a translation/revision of the original article or material of the relevant quoted media. According to the Copyright Act of the Republic of Bulgaria (art. 9), the copyright on the translation or revised text belongs to the person who did it without prejudice to the rights of the author of the original text.

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