Most of the retail stock is represented by shopping malls – 60%, followed by retail parks – 25% and commercial galleries -15%.
Two shopping centers were completed in the first six months of 2015, having a total rentable area of 117,000 sqm: Mega Mall in Bucharest and Coresi SC in Brasov.
The modern retail space density per 1,000 inhabitants in Romania is 151 sqm while Bucharest, with a retail stock of 1 million sqm, currently has 537 sqm of modern retail space per 1,000 inhabitants, according to DTZ Echinox.
In the upcoming quarters, over 100,000 sq. m of modern retail spaces are scheduled for completion.
According to the report, the most active retail investor will remain NEPI, which is currently developing a new shopping center in Timisoara and is expanding certain shopping centers existing in its portfolio.
Considering that most of the Romanian cities with a population of over 100,000 inhabitants have been covered in terms of modern retail schemes, new development activity will be directed towards tertiary cities. As in other CEE countries (e.g. Poland), small retail parks might become developers’ preferred format.
At the same time, main FMCG retailers continued to enlarge their network, Profi being the most active with 40 supermarkets and proximity stores opened. On the hypermarket segment, Kaufland, Auchan and Carrefour expanded their local network with 1 unit each.
At the end of the first six months of 2015, Kaufland is operating 103 hypermarkets in Romania, Auchan’s local hypermarket chain has 33 units and Carrefour operates 28 hypermarkets
Fashion retailers’ expansion strategies have been aimed at existing projects with proven performances. Moreover, along with the opening of Mega Mall and Coresi SC, a series
of fashion retailers have enlarged their network.
Throughout the first six months of 2015, Inditex was the most active fashion retailer. The Spanish group opened 10 new units, reaching at the end of June a network of 108 stores. The second active fashion retailer was the Polish group LPP, with 6 new stores opened. At the end of the first six months of 2015, LPP was operating 21 stores in Romania.
The vacancy rate in dominant retail projects is below 4%, in secondary retail projects – 10-15%, and in tertiary retail projects – 20-25%.
According to DTZ, prime rental level has been stable in the last four years and this year is expected to remain in the same range. However, retail spaces of 100 sqm located on the ground floors of dominant shopping centers are becoming scarce. Bearing in mind that the number of new entries is increasing and that retailers, especially fashion brands, are reporting solid growth in sales, starting Q4 2015 an upward pressure on prime rental level is expected.
Prime rental levels have remained stable. Headline rents achieved for units of 100 sq. m in prime shopping centers in Bucharest range between EUR60 – 70/ 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 sq. m in dominant shopping centers outside Bucharest range on average between EUR20 – 25 / 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 EUR12 –18/ sqm/ month.