CBRE Romania: 2014 retail space deliveries to plummet to 10-year low

Some 56,000 sqm of new modern retail space will be delivered until the end of this year, marking the lowest level recorded since 2003, according to a recent CBRE report on the Romanian the retail market. The expected volume for 2014 is significantly below the last 10 years’ average which is 245,000 sqm/year.

Three main retail projects are to be completed by yearend, each below 30,000 sqm, according to CBRE. This includes Vulcan Value Centre (NEPI) located in Bucharest, Targu Jiu Shopping Centre and an extension of AFI Palace Ploiesti. When completed at the end of Q4 2014, these schemes will increase the stock up to approx. 2.85 million sqm.

By comparison, at the end of Q4 2013 the modern shopping centre stock reached 2.81 million sqm after the opening of five projects that account for 124,000 sq m. These openings comprised four shopping centers (Uvertura Mall Botosani, AFI Palace Ploiesti, Promenada Mall Bucharest and Galati Shopping City totaling 106,000 sq m) and one hypermarket-led scheme with a small gallery – Cora Constanta (total GLA of 18,000 sq m) – operational since July 2013.

Beyond 2014, a more significant volume of retail space is expected to be delivered as construction works have started for several major schemes – Mega Mall and ParkLake both located in the Eastern part of Bucharest, Immochan’s Ghencea Shopping Centre also in Bucharest and the first phase of Coresi Shopping City in Brasov. Their completions are expected in 2015 – 2016.

In 2013 demand for new retail space came from a new group of franchisees looking to diversify their local portfolio of brands in order to be present in top locations in Bucharest. “This particular new demand is boosted by the good performances registered by the dominant shopping centers and shopping galleries located mainly in Bucharest,” said to CBRE representatives.

The real estate services firm estimates that last year over 20 new retail brands were introduced locally in shopping centres (La Martina, Oliver Weber, Patrizia Pepe, BCBG Max Azria, Tchibo Store, Pretty Ballerinas, Suvari, H&M Home, Mim, Ethan Allen, Crabtree & Evelyn, Lego, Napapijri), hotel shopping galleries (Dolce&Gabbana) or high street stores (Anthony Morato, Ben Sherman, Roberto Bravo, Laduree). Most of these stores are being operated by franchisees. Another big name was the Greek toys retailer Jumbo that has opened its first two units in Romania in autumn 2013, in Timisoara respectively Bucharest.

Over the next period Bucharest will continue to attract the majority of new retailers entering the local market as at least two major schemes are expected to be delivered until 2016, said Luiza Moraru, head of retail CBRE Romania.

“The demand and the macroeconomic performances registered in 2013 coupled with positive expectations for 2014 and 2015 will lead to the strengthening of the prime shopping centers’ dominant position in Bucharest as well as in the province,” she added.

Simona Bazavan