“The gap between prime and secondary retail schemes remains significant. Dominant retail projects register a vacancy rate below 5% both in Bucharest and regional cities. For secondary retail schemes, the vacancy rate is situated between 25 and 30%. However, secondary schemes with no major competition have a vacancy rate below 10%. In the second half of the year, the vacancy rate will continue to decrease, considering that new projects that are going to be delivered in the second half of 2014 have an occupancy rate of approximately 90%,” the real estate consultancy firm said in its report.
There were no changes regarding the prime rental level during the first half, the report noted. Headline rents achieved for units of 100 square meters in prime shopping centers in Bucharest range between EUR60 and EUR70/sqm/month, while for secondary shopping centers the headline rents for units of same size is between EUR25 and EUR45/sqm/month.
Modern retail stock in Romania at the end of the first half was of 2.787 million sqm, with Bucharest accounting for 31% with 875,000 sqm. Shopping centers represent 60%, while retail parks and commercial galleries account for 25% and 15% of the total retail stock.
Romania’s modern retail space density per 1,000 inhabitants is of 138 sqm. Bucharest, the largest city in Romania in terms of modern retail stock currently has a retail space density of 465 sqm per 1,000 inhabitants, the report notes.
Of new retail space supply, only two shopping centers are set to open in 2014, Vulcan Value Centre in Bucharest, opened Thursday, and Targu Jiu Shopping City, to open in October. Both project were developed by South-African investment fund NEPI. Overall, the pipeline figure for 2014 is at the lowest level in 12 years.
Due for completion in 2015 are three retail projects with a total rentable area of 144,000 sqm, mostly concentrated in Bucharest with approximately 66%.The largest retail project due to be completed in 2015 is Mega Mall, developed by NEPI. When completed, it will be the largest retail project delivered in Romania since 2010. Another important project due to be delivered next year is Coresi Shopping Center developed by Immochan in Brasov.
In the first half, main FMCG retail players opened in total 70 units. Fashion retailers continued their expansion plans by keeping the rhythm at a steady pace.
International retailers are analyzing the conditions and characteristics of the local market and by the end of the year several new retailers are expected to enter Romania, DTZ noted.
New entries in the first half of the year were mainly focused on sports, fashion and cosmetics.