Three shopping centers were completed in the first six months of 2016, with a total leasable area of 69,000 sqm: Shopping City Timisoara – phase II, Mercur Craiova and Satu Mare Shopping Plaza. Additionally, Coresi Shopping Resort in Brasov was extended with a leasable area of 14,000 sqm.
According to the study, the modern retail space density per 1,000 inhabitants in Romania is 164 sqm. Bucharest, with a retail stock of 1.12million sqm, currently has 595 sqm of modern retail space per 1,000 inhabitants.
At the same time, vacancy rate for dominant retail projects reaches 2%, for secondary retail projects – 8%, and for tertiary retail projects, 10-15%;
In the second half of 2016 approximately 148,000 sq. m of new retail spaces are scheduled for completion, 65% being located in Bucharest. Overall in 2016, the level of new supply is projected to be higher by 50% y-o-y,” said Bogdan Marcu, Partner – Retail Agency.
In the same period, prime rents in shopping centers in Bucharest range between EUR65 –75/sqm/month, while for secondary shopping centers, the headline rents for units of same size are between EUR25 –45/sqm/month.
Headline rents achieved for units of 100 sqm in dominant shopping centers outside Bucharest range on average between EUR22 –27/sqm/month. In cities such Cluj Napoca, Timisoara, Iasi or Constanta the prime headline rents are higher by 20% -30%. For tertiary cities the prime headline rents are between EUR16 –20/sqm/month.
In terms of demand, The VAT cut from 24% to 20% has had a positive impact on retail sales which reached 16.8% y-o-y growth in H1 2016. This performance was boosted mainly by food sales, which overall have increased by 23.5% y-o-y. Non-food sales recorded an increase of 15.1% y-o-y. Compared with the average for EU 28, Romania’s retail sales growth was six times higher.
Most of the food retailers have enlarged their networks. Profi continued to be the most active, with 44 supermarkets and proximity stores opened. On the hypermarket segment, only Kaufland expanded its local network by opening two stores in Bucharest. On the Cash & Carry segment, after four years with no openings being recorded, in H1 2016 Selgros announced a new store in Targu Mures with a sales area of 4,000 sq. m.
Carrefour concluded the acquisition of Billa supermarkets, transaction that increased the local network of the French retailer with 86 supermarkets. At the end of the first half of 2016 Carrefour is present in Romania with more than 270 stores of different types (hypermarkets, supermarkets and proximity stores).
Fashion retailers’ expansion strategies have been aimed mostly towards new projects. Throughout H1 2016 H&M has been the most active by opening 5 stores. Inditex, the largest fashion retailer in Romania has added 4 units to its local network reaching at the end of June 112 stores. Among active fashion retailers were also New Yorker, C&A, LC Waikiki, LPP, Kenvelo and Koton. New brands entered Romania throughout H1 2016, Bucharest remaining the core destination for opening a store.