The total stock of modern retail spaces exceeded 4.1 million sqm in Romania

CBRE, the global and national leader in commercial real estate services and investments, announces that the total stock of modern retail spaces in Romania reached 4.11 million sqm in the first quarter of 2023. According to the latest report “Romania Retail Market Snapshot”, the total volume of modern retail spaces increased by 22,000 sqm in the first three months of the year, after an investment of 9 million euros in two retail parks.

Although retail parks attract an increasing volume of investment, shopping malls continue to dominate the sector. Currently, the market is configured in a proportion of 62% of commercial centers such as malls, and only 38% of retail parks.

“The demand for retail space continues to grow, so new projects are being developed. But we are seeing a reconfiguration of the market and a reorientation of developers toward smaller retail projects that have proven to be successful, from two points of view: investing in small and medium-sized cities on the retail side is profitable given the lack of competition and increased purchasing power, and at the same time the investment value is much lower than in a mall. We expect the advance of the total stock of modern premises to be a  considerable one this year, with several major centers expected to be completed”, stated Carmen Ravon, Head of Retail Occupier CEE, CBRE.

Approximately 300 million euros have been invested in the construction of new modern spaces, intended for shopping, malls, or retail parks, from the beginning of 2022 until the first quarter of 2023. In addition, the prospects for investors are positive, in the conditions in which the yield level rose by 0.25%, in the first quarter of the year, compared to the same period of 2022, up to 7.5%.

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At the same time, the rent value for shopping centers and for locations on the main commercial arteries of the cities was at an average similar to the first quarter of last year, with 75 euros/sqm./month, respectively 50 euros/sqm./month in the case of the second category.

• What’s next for the retail market

A volume of 320,000 sqm of retail spaces is expected to be delivered by the end of the year, both in the main regional centers and secondary cities. Of these, no less than 74% of the areas under construction are retail parks, while only 26% are intended for large shopping centers.

The fashion industry continues to represent, along with the food sector, the main development engine of retail spaces, the most active tenants being from these sectors. CBRE’s data shows, however, that while restaurant areas within large shopping centers are adapting to new consumer demands and becoming more efficient, in retail parks food areas are becoming the main point of attraction.

“As retail spaces are developing, we see an improvement in the consumer experience. The restaurant areas are being rethought thus offering the clients more facilities for relaxing and spending free time in a pleasant environment. At the same time, brands attach much greater importance to sustainability, and ESG criteria, as well as the e-commerce part, are more present in companies’ strategies and plans”, added Carmen Ravon, Head of Retail Occupier CEE, CBRE.

Retailers continue to invest in the expansion of businesses, and the efficiency of commercial spaces, the fulfillment of ESG criteria, which have an increasing impact on the entire activity of businesses, but also the adaptation to e-commerce, is becoming indispensable in the companies’ strategies scaling.