High street retail rents to sink further, Moore Real Estate Services predicts

High street retail rents have fallen by between 30 and 60 percent since 2008, a study conducted by More Real Estate Services has found. On shopping streets Magheru Boulevard and Calea Victoriei rents are down by 60 percent while vacancy rates have grown from 5 to 25 percent. The real estate company estimates rents will slide by a further 5-15 percent this year. The smallest drop was registered in secondary areas or where infrastructure has been improved and the status of the area has consequently changed, as in the case of Lipscani. “There is a limited stock of excellent properties. These are the ones that have registered the smallest drop in rental value and the lowest vacancy rate. The vacancy rate grew by 5-6 percent in 2008 to 15 percent, and in some areas it even reaches 25 percent,” the report states.

According to the study, further rent adjustments of 5 to 15 percent are expected. “In previous years, retailers looking for the good traffic and exposure offered by Magheru Boulevard were accepting offers in areas surrounding Piata Romana, taking into consideration the lack of available space or the high rents demanded on the main boulevard. Considering the general economic context and the present availability of locations that were considered out of reach during the real estate boom, potential tenants have preferred locations with similar exposure, in large commercial developments such as malls or commercial gallerias,” the study adds.