Shopping mall space in Bulgaria doubles: Colliers

The stock of contemporary shopping mall space in Bulgaria doubled in the first six months of 2010 with the opening of five new shopping malls, reaching 452,000 m² in total, according to Colliers International’s retail market overview for the first half of 2010. At the same time, retailers are coming under pressure from growing competition and the decreasing propensity of consumers to spend.

The strong development of the retail market segment in Bulgaria has caused a change in retail vacancy levels. Whereas two of the key shopping malls in the capital - The Mall and Serdika Center - opened with more than 90% occupancy, vacancy levels at other shopping centres have increased moderately.

The opening of new shopping malls has also affected the performance of retailers on the leading high street locations. Due to lower rental rates, brands are concentrating their activities in the malls, pushing overall vacancy levels to 10% in Sofia. The report claims that demand for contemporary retail space is driven primarily by European and Turkish brands through regional franchisees.

Rental rates in shopping malls continued to fall in the first half of 2010 by 5% in Sofia and Varna respectively. In Plovdiv and Bourgas the average fall in rental rates came to 15% and 19% respectively. High-street locations saw an average decrease of 20% across all submarkets.

The big-box segment is marked by the continuing boom of the discounters, the active development of consumer electronics companies and the opening of the first big outlet centre in Bulgaria. Another format that is gaining momentum is the retail park, albeit at a slower pace compared to the shopping malls. Several schemes are currently under construction in Sofia and three projects are expected to be completed by the beginning of 2011.