Retail developers go for regional cities in Romania

 

The modern retail stock in Bucharest reached 1.22 million sqm at the end of 2016 and most comprises shopping centres (56%) and retail parks (33%), while commercial galleries cover the remaining 11%. Last year new supply reached 98,500 sqm, after the openings of Parklake Plaza and Veranda Shopping Center and the extension of Militari Shopping retail park. 

The general vacancy rate stands at 4%. While dominant shopping centres are fully occupied, particular projects located in 3rd, 4th and 5th districts inflate the vacancy rate. The average density of modern retail space reached 650 sqm / 1,000 inhabitants. The 1st District of Bucharest, which is also the wealthiest, has the highest density, with 961 sqm / 1,000 inhabitants, but also the highest occupancy rate (99%) and the highest headline rent, with €75 per sqm/month. The 6th District of Bucharest continues to have the largest retail stock, with 301,800 sqm, while the 3rd District advanced on the second position after the opening of Parklake Plaza, with 270,400 sqm. 

 

For 2017 no major retail project is scheduled for completion. The current pipeline is limited and consists of the extension of retail schemes such as AFI Palace Cotroceni and Promenada Mall. Starting 2018, however, the situation is likely to change, since currently in the northern part of the city some projects are in early stages of development.

 

 

At the end of 2016, the modern retail stock outside Bucharest reached 2.3 million sqm. Shopping centres account for app. 60%, while retail parks and commercial galleries represent 34% and 7%, respectively, from the total retail stock. A total of 140,000 sqm of modern retail spaces were delivered throughout 2016, divided between several projects. 

 

The largest project delivered was Shopping City Timisoara – phase II, with a total GLA of 41,000 sqm, followed by Shopping City Piatra Neamt, with 28,000 sqm GLA and Mercur Craiova, project with a rentable area of 15,000 sqm. Additionally, City Park Mall in Constanta and Coresi Shopping Resort in Brasov were extended with 21,000 sqm and 14,000 sqm. 

For 2017, approximately 130,000 sqm are expected to be delivered. The largest project announced is Ramnicu Valcea Mall, a project with a total GLA of 28,000 sqm. More than 60% from the total projects under construction or planned to be delivered in 2017 are shopping centres. 

 

Headline rents achieved for units of 100 sqm in prime shopping centers outside Bucharest range on average between € 22 – 27 per sqm/month. In primary cities such as Cluj Napoca, Timisoara, Iasi or Constanta the prime headline rents are higher by 20% - 30%. For tertiary cities the prime headline rents are between € 15 – 20 per sqm/month.