Grim outlook for Bucharest malls: high vacancy rates and poor salesPublish date: 10-03-2010
Shopping centers in Bucharest have a total retail floorspace of 500,000 sqm, and with a development pipeline figure of around 3 million sqm across the country, the vacancy rate is very likely to climb and tenants sales figure to fall short of expectations, according to a research by RegioPlan Consulting, an independent trade consulting and market research company. Shopping centers in Romania have a total retail space of around 2 million sqm spread across 100 malls. In total, the opening of the shopping centers announced for this year could add another 3 million sqm to the existing provision.
Bucharest in particular, faces additional challenges. With a gross leasable area larger than 500,000 sqm coupled with the completion other large shopping centers in a very short period, it's no wonder vacancy rates will grow and tenants sales will go bust, said Hanna Bomba-Wilhelmi , CEO of RegioPlan Consulting.
In Romania, shopping center boom began in 2005, and in just four years, the country experienced record development levels, with 90% of the existent stock being completed. The market peaked in 2008 when 20 projects across the country were delivered. For the time being, the country has a gross leasable area of 2 million sqm spread across around 100 shopping centers.
The largest centers in Bucharest are: Sun Plaza (80,000 sqm GLA), AFI Palace Cotroceni (76,000 sqm GLA), Iris Shopping Center (51,000 sqm GLA), Unirea Shopping Center (44,000 sqm) and Plaza Romania (38,000 sqm GLA).With 10 openings in 2009 in Romania, the completion levels slowed down markedly. Currently, 80 shopping centers are in the pipeline, the majority of developers preferring locations outside Bucharest.
Last year, 160 shopping centers were completed in Central and Eastern Europe, but despite the poor access to funds and low expansion rate of large retailers, nearly 1,000 shopping centers are scheduled for CEE region.
The financial crisis has put a number of projects on hold, but developers didnt scrap their plans. Many of them are taking a wait-and-see approach, but they also have to take into account that gold-digging period in Eastern Europe came to an end, and not all projects will still benefit of funding any longer, Bomba-Wilhelmi stressed.RegioPlan Consulting is a shopping-center data provider for Eastern Europe and Austria. With over 15-year experience, the company carried out over 2,500 analyses in 24 Eastern European countries.
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