“2009 will be a very challenging year for retailers. Many of them have already submitted bank guarantees and deposits for spaces which they do not intend to occupy until 2010 and 2011, following which a great amount of cash has been halted. All these cash-flow difficulties will also prompt retailers to reconsider their contracts for the locations that are already open,” said Oana Iliescu, head of the retail department of DTZ Echinox.
For strong international retailers, Romania remains a popular market, even though sales have fallen in the last two quarters. According to DTZ Echinox, international retailers will continue with their expansion plans in Romania, but with a more selective attitude, putting more pressure on developers to obtain commercial conditions in order to minimize the investment risks.
When it comes to securing a good spot, real estate specialists said that the retailers will still look at commercial centers delivering premium locations with good traffic, backed-up by financing and with ongoing construction stages.
The study also found that for the first time, tenants are showing a clear mistrust of projects which do not provide proof of financing and have not started construction. Of all the projects announced for delivery in 2009, less than half will be launched on time, according to the company.
As for future transactions, the agency's consultants do not expect to see a major buzz by year-end, nor do they believe that changes are likely at the beginning of the next year, as the duration of the wait-and-see period will depend on the flexibility of developers. So far, the investors' interest has homed in exclusively on completed projects, especially offices or mixed developments sited in prime locations and providing guaranteed revenues over the long term, according to Mihaela Sandu, consultant within the investment department of DTZ Echinox.