“Retailers are more demanding than ever in regards to the targeted locations for their expansion plans, mainly looking at prime retail destinations. In this context, the new wave of shopping center developments should attract further new retailers in Romania, while also encouraging the existing players to continue expanding their local footprints,” stated Dana Radoveneanu.
Developers delivered 11 retail projects in 2023, totaling approximately 215,000 square meters, a record level of the last seven years, with retail parks holding a 60% share, with cities such Bucharest, Craiova, Alba Iulia, Arad, Giurgiu, Vaslui benefiting from such investments. Investment plans for the next five years are also consistent, given that more than 500,000 sqm of retail spaces are currently under construction or in different planning stages, in line with data from Cushman & Wakefield Echinox.
Developers will add new retail schemes or major extensions mainly outside Bucharest in cities such Cluj-Napoca, Iasi, Sibiu, Pitesti, Bacau or Galati, with Prime Kapital, NEPI Rockcastle and Iulius Group having the strongest pipeline on the short and medium term.
The retail market registered consistent new deliveries in Q4/2023, with projects of 144,000 sqm GLA (gross leasable area) being completed. The total retail stock across Romania reached 4.45 million sqm at the end of 2023, of which 54% representing shopping centers, 40% retail parks and 6% retail galleries.
Promenada Craiova, an 80,000 sqm GLA project owned by NEPI Rockcastle and Dedeman (53,000 sqm in a shopping center and 27,000 sqm in a retail park and a Dedeman store) was the largest retail scheme delivered both in Q4/2023 and also in 2023 overall. Moreover, this project is also the largest retail investment carried out in Romania since 2010 in terms of size. Other projects finalized in the same quarter were AFI Arad, a 29,000 sqm unit developed by AFI Europe, and Cosmopolis Plaza of 16,300 sqm GLA located in the Cosmopolis residential project in Bucharest.
Cushman & Wakefield Echinox Retail Agency brokered 26 leasing transactions in 2023, with an area of approximately 30,000 sqm, in Bucharest and in Romania’s main cities, for clients such as Somproduct, Mobexpert, Noriel, Jimmy Key or Wittchen.
Prime shopping center rental rents in Bucharest stabilized in Q4/2023 to a level of EUR80-85/sqm/month, while the corresponding figures in secondary cities – Cluj-Napoca, Timisoara, Iasi and Constanta – remained flat, ranging between EUR50 and EUR65/sqm/month. The same situation is seen in tertiary locations which recorded rental rates of EUR30 to EUR35/sqm/month.