Shopping mall rents to drop while market diversifies - study
Shopping mall retail space in Bulgaria is poised to increase by about 50 per cent compared to the current 281 000 sq m over the next 18 months, according to property consulting firm MBL, cited by Stroitelstvo Gradut weekly on January 14 2010.
"At the moment, there are projects amounting to 507 000 sq m under construction, 156 000 sq m of which are based in Sofia," a company statement said. MBL are partners of international consulting firm CB Richard Ellis. In April 2009, investment fund Heitman European Property Partners Fund III (HEPP III) appointed consultancy firm MBL, an associated partner of CB Richard Ellis in Bulgaria, to manage City Centre Sofia mall, which the fund purchased in 2008.
According to Stroitelstvo Gradut, about 1.2 million sq m of retail space are planned and awaiting construction, but for the moment those projects have been put on hold due to lack of financing and investment.
Of the existing 87 000 sq m of shopping mall space in Sofia, more than 99 per cent is occupied, but MBL says that the market is likely to undergo a "reshuffling" once Carrefour opens in Tsarigradsko Chausse. Additionally, Serdika Centre is poised to open later this year. For the moment, both Serdika Centre and Carrefour have declared "that they have rented out 80-90 per cent of their capacity".
Outside Sofia, shopping malls report that on average 93 per cent of available capacity is filled. In most shopping malls owners are forced to lower their prices and give discounts in other to keep tenants, Stroitelstvo reports. Statistics indicate that the going price in shopping malls in the capital is in the range of 24-25 euro a sq m whereas in the rest of the country the rate is 20 euro.
Rents in shopping malls in 2010 are likely to continue their decline, according to MBL, due to the influx of new retail space on the market. In terms of customers, however, 2010 will be a positive year because the local market will diversify further with the arrival, for the first time, of brands like Peek & Cloppenburg, Inditex-Zara, Humanic and GAP.
Text source: sofiaecho.com
Image: Reuters
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