The strong competition between the existing commercial centers in Bucharest encourages the developers of retail spaces to start projects in the big and medium cities of Romania, or to expand their presence in those locations, although in the Capital there is still room for new commercial projects, shows a real estate consulting company.
The total modern retail stock in Romania, which includes both retail parks and shopping centers, reached approximately 3.7 million square meters in the first half of 2019, and will be delivered approximately 130,600 square meters by the end of the year, is mentioned in the analysis "Romania MarketView H1", carried out by CBRE.
Most of the retail stock is spread nationally, Bucharest having a share of 31% of the total.
Shopping centers, the most common retail format in Romania, occupy 61% of the total area analyzed.
In the first half of 2019, approximately 67,000 square meters of retail were added to the total commercial stock, due to the most ambitious project delivered in the second quarter, the expansion of Iulius Town, developed in Timisoara, is mentioned in the analysis. Some extensions of the high-performing shopping centers, already in full operation, as well as a new small retail park, delivered to Drobeta Turnu Severin, are in the top of the new deliveries on the market, according to CBRE.
The head of the Department of Analysis and Transactions of CBRE Romania, Carmen Ravon, believes that there is still room for expansion of retail developers in Bucharest.
"Developers are still focusing on secondary and tertiary cities, a trend highlighted since last year, which we also observed in the first half of 2019, when the expansion of the Veranda Mall (about 6,000 square meters) was the only project delivered in the capital.The strong competition between the commercial centers existing in Bucharest encourages the retail developers to expand their investments in the regional cities, through the development of small projects, but with potential for expansion. However, there is still room for new retail projects in Bucharest, "said the representative of CBRE Romania.
The prime rents (main location, rented area of 100 square meters) remained stable, at the level of 80 euros/sqm/month in shopping centers, respectively 55 euros /sqm/month at street locations and 8 - 15 euros/sqm/month in retail parks. For the stabilized shopping centers, CBRE estimates a slight increase in rents depending on the desire to expand of the retailers. The retail density of Bucharest (square meters / 1,000 inhabitants) reached the level of 548 sqm at the middle of 2019, while at the national level it reached 190 sqm. The big regional cities, such as Cluj-Napoca, Iasi, Timisoara and Constanta register the following values: 488 sqm, 420 sqm, 603 sqm and 582 sqm, while Oradea is the regional city with the highest retail density, respectively 657 sqm / 1,000 inhabitants.
In the second half of 2019, modern retail deliveries are expected to double in value compared to the first half, with approximately 130,600 square meters being expected on the market.
Most of the spaces (97%) will be located outside Bucharest, following the tendency of investors to focus on regional cities, notes CBRE. In addition, 37% of the planned projects are represented by shopping centers, and the rest are retail parks, both small and large.
International developers NEPI and Prime Kapital / MAS Real Estate, focused on the retail segment, dominate the market for large investments, with 73% of the total area planned for 2019. The Festival Centrum project in Sibiu, with the 42,200 sqm, developed by NEPI, is expected to be delivered in the fourth quarter of 2019, while Prime Kapital / MAS Real Estate is also preparing the opening of two retail parks, one in Balotesti and another in Zalau.
Also, by the end of the year, it is estimated that the Electroputere Parc extension in Craiova will open its doors for the inhabitants of the south of the country. Given that the modern retail stock is expected to reach about 3.8 million square meters by the end of 2019, CBRE experts estimate that the level of prime rents will remain stable, similar to the first half.
Considering the retail projects under construction and planned, in 2020 approximately 214,000 square meters of modern retail spaces are expected for delivery. Two large shopping centers are planned for Brasov and Targoviste, both under construction and to be inaugurated in the first part of 2020.
AGERPRES / (AS - author: George Coman; publisher: Andreea Marinescu, online editor: Adrian Dadarlat)