BULGARIA RETAIL MARKET OVERVIEW

H2 | 2018 2

FIG. 1: RETAIL SPACE IN SHOPPING CENTRES PER 2016 2017 2018 1,000 INHABITANTS IN 400 THE BIGGER CITIES 355 350 316 320 AVERAGE EUROPE 300 H2 2018 | 254 247 261 250 250 239 200 189 150 109 100 50 0 Retail Market Overview | Colliers International | Colliers Overview Market Retail

Soa Ruse Varna Total Bulgaria

FIG. 2: PRIME RENTAL Soa 39 39 35 34 RATES2 IN SHOPPING CENTRES (EURO/ SQM/ MONTH) Plovdiv 25 26 25 25

Varna 25 27 26 26

Burgas 25 25 24 21

2018 2017 2016 2015

FIG. 3: PRIME RENTAL Soa 55 49 45 42 RATES2 ON HIGH STREETS (EURO/ SQM/ MONTH)

Plovdiv 23 22 20 20

Varna 21 20 18 19

Burgas 22 21 19 19

2018 2017 2016 2015

Source: Colliers International H2 2018 | Bulgaria 3 Retail Market Overview | Colliers International the occupancy reached over 90%. over reached the occupancy the shopping In comparison, kept a in centres of 5%. rate vacancy The modernization and parks retail of existing expansion opened Waikiki LC continued. in Jumbo Plaza and will soon and Pepco. CCC be joined by their chains maintained Food terms of new leading position in the last six openings during store months of 2018. The most active Lidl Billa (4 stores), were operators (1). (3) and Fantastico (3), T Market Billa leased a significant number mall locations in Sofia, of shopping Carrefour. by occupied previously to 254 sqm for Plovdiv, while in the while in Plovdiv, to 254 sqm for unchanged – capital it remained 316 sqm. (Fig.1) a recorded in Sofia High streets rates vacancy in drop marginal 8% to from 6% while the top a cities registered regional three base. This on annual 1 % growth 6% Plovdiv, was 3% for indicator and 8% Burgas. Varna for synchronized trends High street malls – those of shopping with occupancy high stable rents, tenant turnover and levels low locations. the better for • • •

Modern retail space demand in Modern retail of stable levels the capital marked the absorption – 5,670 sqm during of 2018, and half second the whole year. sqm for 15,100 to due This was mainly tenants of existing replacements and openings of new ones. shopping Competition between with owners malls continued, building and layout in investing to enhance improvements and maintain a interest customer positioning. market competitive the country in centres Shopping of levels moderate registered was absorption. The indicator basis. sqm on an annual 30,760 projects the well–established For The total supply of modern total supply The the second in centres* shopping at half of 2018 remained but increased 400,660 sqm in Sofia level. sqm at country to 771,860 the new to was due The growth Plovdiv opening in centre shopping sqm GLA. Plaza – 35,000 – Plovdiv started parks*** A few retail the period during operations (G Centre in Plovdiv three – Retail Park Raikov, Retail Plovdiv, – South) and one Park Plovdiv (Billa Park). in Kostinbrod space “leasable retail The ratio 1,000 per centres in shopping the year–end inhabitants” at Bulgaria, to 109 sqm for increased

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DEMAND SUPPLY H2 2018 | Bulgaria 4 Retail Market Overview | Colliers International RENTAL LEVELS FORECAST • • • • • parking. or more oflettable floorspace, withcentralized managementand a car parkenvironment withamplefree *** ARetail Parkisdefinedasapurpose–built development withatleast three units covering 2,000 sqm and taxes andnotreflecting tenant incentives. (net internalarea) unitof the highest quality andspecification in thebestlocation, excluding servicecharges ** Primerent – the average top open–market rent estimated to beachievable for anewleaseof100sqm * Theoverview covers shopping centres above 10,000 sqm. Definitions: local andinternationalbrands their footprint in the bigger cities, are usually missing. Inaddition to where modernshopping centres cities under 100,000 inhabitants, as aretail format, especially in Retail grow parkswill inpopularity end of2019. Varna befinalized EAD)will by the in mall the city (owned by Mall TherepositioningMall). of the first to openinVarna (DeltaPlanet A newshopping centre isexpected continue in the first halfof2019. shopping centres isanticipated to Investmentinterest towards Paradise Center andBulgariaMall. hypermarket areas inTheMall, of the absorption this trendis the reconstructions. Oneexample of mix optimizationandbuilding likelypositioning, lead totenant to continue will malls to bemarket The primary focus ofshopping (Fig. 2&3) stable in the second halfof2018. and the regional citiesremained centres andhighstreets inSofia Prime rental rates** inshopping • • • streets isunlikely. rates inshopping centres andhigh Significant changeinprime rental potential tenants. to increaseand feelwill itsappeal of 2019. create Thiswill anewlook is duefor completion in the spring reconstruction ofGraf Ignatiev Str. from the highdemandlevel. The strong retailer interest, evident High streets continue will to attract smaller cities. and retail formats ingeneral in the the development ofretail parks furthershops, whichwill enhance expectedopen theirflagship to segment (KiKandPepco) are New brands in the low–priced parks. investment interest toward retail triggerThis tendencywill parks asexpansion opportunity. accessories sectors consider will from the fashion, shoesandhome its concepttoevolve intoaCOMMUNITY CENTER. its architecture towards amodern,state-of-the artbuilding Since 2018theshoppingcenter of Varna Mall hasbeenchanging: THE PLACE PEOPLE WANT TO BE. To rent space you will want tobe The place where promote wellbeing andlifestyle activities. A community venue full of services,new shopsandofficesinorder to to be, where peoplemeet,eat,relax, work, rest, play…andshop… Varna Mall will offer tothecitizensandguestsof Varna thecoolestplace architecture, overall atmosphere andtenantmix. The new conceptof which will entirely modernize theshoppingcenter intermsof designand In 2018 Varna Mall startedalarge-scale repositioning andrenovation process which includesaKaufland hypermarket. and private transportation. Itispartof anestablishedshoppingzoneof thecity, features anexcellent location,space, visibility andaccessibilitybybothpublic centers andentertainmentdestinationsin Varna cityandtheregion. The project Varna Mall was openedin2008andisknown asoneof themostpopular shopping [email protected] +35929769

The place where you will want to be

Since 2018 the shopping center of Varna Mall has been changing: its architecture towards a modern, state-of-the art building its concept to evolve into a COMMUNITY CENTER. THE PLACE PEOPLE WANT TO BE.

Varna Mall was opened in 2008 and is known as one of the most popular shopping centers and entertainment destinations in Varna city and the region. The project features an excellent location, space, visibility and accessibility by both public and private transportation. It is part of an established shopping zone of the city, which includes a Kaufland hypermarket.

In 2018 Varna Mall started a large-scale repositioning and renovation process which will entirely modernize the shopping center in terms of design and architecture, overall atmosphere and tenant mix. The new concept of Varna Mall will offer to the citizens and guests of Varna the coolest place to be, where people meet, eat, relax, work, rest, play…and shop… A community venue full of services, new shops and offices in order to promote wellbeing and lifestyle activities.

To rent space [email protected] +359 2 976 9 976 The place where you will want to be

FACTS & FIGURES GLA – 31,000 sqm

TBA - 65,470 sqm

5 floors retail, entertainment & office

3 underground levels

600 parking spaces

Overpass with hypermarket Kaufland, having 5,000 sqm sales area and 300 own parking spaces

Catchment area – above 475,000 residents

More than 2 mln tourists every year (Varna)

Registered traffic at the shopping center cross road of 20 mln cars per year

Exclusive Agent Colliers International European Trade Center, Build. B, VII 115K Tsarigradsko Shose Blvd. 1784 Sofia, Bulgaria Mobile: +359 2 976 9 976 FOR MORE INFORMATION

Dimitrinka Rakovska Adriana Toncheva Manager | Retail Services Senior Market Researcher phone: +359 2 976 9 976 phone: +359 2 976 9 976 [email protected] [email protected]

Colliers International | Sofia European Trade Center 115K Tsarigradsko Shose Blvd. Build. B, 7th floor | 1784 Sofia The information contained herein has been obtained from sources deemed reliable. While every phone: +359 2 976 9 976 reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to colliers.com acting on any of the material contained in this report. Copyright © 2019 Colliers International. Colliers International | Bulgaria