The total stock of modern retail spaces in Romania reached 4.11 million sqm in the first quarter of 2023 following the delivery of two new retail parks with a combined leasable area of 22,000, according to a report by CBRE.
Although retail parks attract an increasing volume of investment, shopping malls continue to dominate the sector. Currently, the market is split between commercial centers such as malls that have a share of 62%, while retail parks have 38% of the sector.
All in all, around €300 million has been invested in the construction of new modern spaces, intended for shopping, malls, or retail parks, from the beginning of 2022 until Q1 2023.
„The demand for retail space continues to grow, so new projects are being developed. But we are seeing a reconfiguration of the market and a reorientation of developers toward smaller retail projects that have proven to be successful, from two points of view: investing in small and medium-sized cities on the retail side is profitable given the lack of competition and increased purchasing power, and at the same time the investment value is much lower than in a mall. We expect the advance of the total stock of modern premises to be a considerable one this year, with several major centers expected to be completed”, stated Carmen Ravon, Head of Retail Occupier CEE, CBRE.
CBRE data further shows that around 320,000 sqm of new retail spaces are expected to be delivered by the end of the year, both in the main regional centers and secondary cities. Of these, no less than 74% of the areas under construction are retail parks, while only 26% are intended for large shopping centers.
The fashion industry continues to represent, along with the food sector, the main development engine of retail spaces, the most active tenants being from these sectors.
Yields for retail projects gained 0.25% in Q1 2023 to 7.5% compared to the same period of last year, while monthly average rents were flat at €75 per sqm for prime commercial spaces, and €50 per sqm for second-tier projects.
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