HOPING FOR A HOLE IN ONE
Will the golf sector fail on the final frontier to property success?
The world's most popular game is not football, as widely presumed, but golf. Although Bulgaria is definitely a football country, ongoing developments predict that golf courses will soon outnumber football pitches. In 2000, the opening of the first golf course in Ihtiman sounded like a joke. Nobody understood why a country where most people had trouble paying their electricity bills could possibly utilise one. Now, it's estimated that by 2020, there will be forty sites. A Google search for “Golf in Bulgaria” displays more than 400,000 results, consisting mostly of properties in and near the budding resorts.
Th e good news is that golf resorts appeared after the peak of the holiday property building boom. Therefore, developers had the chance to learn by example that the “build fast, sell soon, ignore quality” strategy rarely leads to good sales. Bulgarian golf developments are designed as holiday villages with integrated courses. Th e golf villas, apartments and hotels themselves are of supreme quality and are probably the only property segment that truly befits the definition of luxury property. Strong competition pushes developers to be inventive and to look for ways to rise above the norm by relying on high quality materials, modern and stylish architecture and picturesque locations. Many developers have hired prominent players to design their resorts. Gary Player – a legend in his own time and designer of more than 200 golf courses worldwide, designed the courses at Black Sea Rama and Thracian Cliff s, both located at the northern Black Sea. Another development in the same region, Lighthouse Golf Resort, bears the signature of Ian Woosnam, one of the “Big Five” generation of European golfers. In addition, low building density is usual for the majority of projects.
However, quality costs money, meaning holiday homes golf resorts are the priciest niche in Bulgaria. Prices per sq m of golf residences start where those for winter or summer resorts finish; about 1,500 euros rising to 3,000 euros. These prices are startlingly high for a country where you could buy property on your credit card just a few years ago. However, in Spain, where the golf craze began a mere 15 years ago, prices for golf properties are double.
Golf developers have been doing their best to avoid the pitfalls of poor quality that results from the so called fast profit projects. Th e question now is, if they have learnt from the bitter Bulgarian experience of generating oversupply, as in Sunny Beach. Judging by the number of announced projects during the last two years, oversupply is a viable possibility if developers fail to promote Bulgaria as a golf destination. Currently, there are three functioning courses and an additional 27 in varying stages of development. Th ere is no information about the completion dates of 18 of them. Five will open this year and four more by 2011. According to Jack Nicklaus, another legendary player and designer of the Ibar club in Dolna Banya, Bulgaria has the capacity for 200 courses. He did, nevertheless, warn that the country won't become a real golf destination without at least fi ft y. Whether golf properties will turn out to be another oversupply segment or the next ace up the sleeve of Bulgaria's real estate now comes down to crucial marketing and advertising.
It is also imperative that Bulgaria succeeds in avoiding certain ecological issues. Golf courses are promoted as ecology friendly developments, but the truth is that they are just as dangerous to the protected territories as any other development. Constructing a golf course changes the landscape no less than a new ski slope. Golf courses can be especially problematic in countries or regions suffering from water shortage. A sad example is in California, where there are 1,075 courses and Spain, where there is also an abundance. Likewise, Bulgaria is among the countries with insuffi cient drinking water. Reports from environmental organisations have already alerted the authorities that certain golf developments are endangering species and habitats under special protection. Th is information is hardly new to the government, since golf growth has been closely monitored by governmental institutions and municipalities from the onset. Th is monitoring, however, is not from ecology movements, but from businesses with aims of joint ventures with private developers.
Shabla's municipal council has recently granted land for the development of three golf courses. Construction has not started yet, as authorities are presently working out project details. Th e municipal council has already approved their contribution on 250 acres of land in the city for one of the courses. Th e city will control 35 percent stakes in the joint ventures with the private developers. Altogether, there are six golf projects with municipal participation, although this has not received negative responses from society or the media as yet. However, when Prime Minister Sergey Stanishev announced that a state holding company, “Golf Development”, was going to be established, many citizens started asking what their government taxes were being used for. Th e aim of “Golf Development” was to construct and run golf resorts, including courses, service buildings and holiday complexes. Opponents argued that the suggested holding was just a perfidious way to privatise state land, as is common with such state holding companies. To prevent a public scandal, the “Golf Development” project was cancelled.
Golf appears to be a really promising sector, especially since the Government and local municipalities are eager to invest. So far, it has been successfully avoiding the traps that the other holiday sub-segments have fallen in. If it manages to jump over the last two hurdles – ecology and marketing, golf may well be the best thing that has ever happened to the Bulgarian property market.
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