Food & beverages, entertainment to become the new anchors of retail centers

There are two new changes happening on the retail market. This is the second consecutive year without a new project in Bucharest and the anchor of a retail project is no longer the hypermarket, but the F&B (food and beverages) and entertainment areas.

According to real estate consultant JLL, the total stock of modern retail space reached approximately 3.1 million sqm, resulting in a density of 151 sqm/1,000 inhabitants and more than 1.1 million sqm are built in Bucharest.

About 17,000 sqm of modern spaces were built in Romania this year – none of them in Bucharest. Cluj, Timisoara, Iasi, Sibiu and Constanta are the main beneficiaries of dominant projects outside Bucharest.

This year’s deliveries were exclusively extensions to existing projects. Another 155,000 sqm were announced for delivery by the end of the year: Shopping City Satu Mare, Iulius Mall Timisoara extension and Era Park Iasi are the most important investments.

”We estimate a vacancy level of 7-8 percent for Bucharest, with a higher percentage recorded in the shopping centers in the south of the capital, while in well-performing and stable malls or in commercial galleries, the vacancies are below 3 percent,” said Corina Stamate, center manager at JLL.

The rent in the best performing retail centers is around EUR 65 – 75 sqm/month, but depending on the center and location level, there are 15-20 percent drops compared to the rents per sqm of the retail performance schemes.

Market changes

The Romanian retail market has entered a maturity phase, given that the development of shopping centers planned for 2018-2019 is mainly represented by the extensions of existing schemes.

All of the area announced for delivery is located in cities of over 100,000 inhabitants, 63 percent targeting the big cities and Bucharest.

Romania continues to be one of the main destinations in Europe for international retailers, with an important potential to grow and improve purchasing power.

It is interesting that technology and digitalization have become ubiquitous, so the structure of the industry is in a continuous process of transformation, but the virtual world has not affected traditional trade – on the contrary, these concepts have been reciprocal.

There is an important change though. Now, when actual purchases and shares can take place anytime and anywhere, the consumer needs a motivation to visit stores and shopping centers.

And the response of mall owners was changing the global food & beverages (F&B) sector, which has steadily increasing due to the rise in online commerce, the two aspects being directly interconnected.

The dedicated F&B space has grown from 5 percent of the malls to 10-15 percent in Europe, a figure that continues to grow.

In Romania, this increased attention towards the F&B sector is also readily recognizable, and the percentages begin to move to 8-10 percent, practically turning them into the new anchors of the mall, taking the place of hypermarkets, usually the strongest tenants in such properties.

Now, a multitude of restaurants and entertainment operators (cinema, games, etc.) tend to take their place in all powerfull malls.

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