Commercial real estate firm Colliers International Retail has just published their overview of the Bulgarian retail real estate sector in 2007 to date. It confirms that retail continues to be the most dynamic commercial real estate sector in the country, with demand remaining high. Set against the economic background of close to 6% continuing GDP growth, unemployment continuing to decrease and real estate accounting for 27.5% of all foreign direct investment, three major shopping centres have broken ground so far this year and a large number of retail warehousing developments are in the pipeline. Colliers say that rental rates are remaining stable on average and yields are continuing to drop with every sale. Deals are being facilitated with a cash-on-cash return of around 7 to 7.5%.
Commercial real estate firm Colliers International Retail has just published their overview of the Bulgarian retail real estate sector in 2007 to date. It confirms that retail continues to be the most dynamic commercial real estate sector in the country, with demand remaining high. Set against the economic background of close to 6% continuing GDP growth, unemployment continuing to decrease and real estate accounting for 27.5% of all foreign direct investment, three major shopping centres have broken ground so far this year and a large number of retail warehousing developments are in the pipeline. Colliers say that rental rates are remaining stable on average and yields are continuing to drop with every sale. Deals are being facilitated with a cash-on-cash return of around 7 to 7.5%.
In terms of shopping centres and malls, while the gross lettable area of current inventory has not increased from the 105,500 m2 at the beginning of the year, the GLA of the active pipeline has increased by 138,500 m2 to 201,000 m2 under construction. Vacancy is very low in the high streets, which are traditionally the most desirable retail locations. The retail warehouse segment also experienced substantial pipeline growth in the first half of 2007, with German retail chain Kaufland remaining the most active player on the market. Austrian DIY chain are the new market entrants, and are following Kaufland’s example by constructing their first store in Plovdiv. It is said to be opening a second in Stara Zagora, with 13 more locations planned throughout the country.