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Resort hotels facing piecemeal disposal

The owners of some hotels on the Bulgarian Black Sea coast are revamping them into holiday home properties as concerns mount about the outlook for domestic real estate investments. The trend is especially evident in coastal resort Golden Sands, said local realtors. At the moment, there are apartment listings at the Berlin Golden Beach hotel in the resort while the former Siren hotel is replaced by an apartment complex. The Golden Anchor hotel in the same resort is about to experience a likewise transformation. There is no shortage of examples in the Sunny Beach resort either, said Dobromir Ganev, manager of the Foros real estate agency. Market watchers said hotel properties in mountain resorts like Bansko are also facing redevelopment into vacation home complexes. The trend is blamed on resort overconstruction, intense competition on the tourism market, the longer recoupment of hotel investments and the tighter business loan market. The residential segment seems the obvious choice for hotel owners that want to get out of their property as the local real estate market absorbed the biggest share of foreign direct investment in 2007 with 37% or 2.158 bln euro. This trend emerges as a slowdown on the real estate market becomes an ever more distinct possibility on the backdrop of the global credit crisis. Analysts expect a shift away from investment in vacation and hotel properties and onto infrastructure, retail and logistics.