BULGARIA MARKET OVERVIEW

H2 | 2019 2

RUSE H2 2019 |

PLEVEN VARNA MONTANA Retail Market Overview | Colliers International | Colliers Overview Market Retail

PLOVDIV

BLAGOEVGRAD

Existing shopping centre

Shopping center under

Existing retail

Retail park under construction

FIG. 1: RETAIL SPACE IN 366 355 SHOPPING CENTRES PER 322 1,000 INHABITANTS IN 315 Western Europe average THE BIGGER CITIES 261 252 CEE average 252 238 192

114

Soa Varna Stara Veliko Burgas Ruse Bulgaria Zagora Tarnovo

2016 2017 2018 2019

Source: Colliers International H2 2019 | Bulgaria 33 Retail Market Overview | Colliers International Main high streets in the four biggest biggest the four in Main high streets stable cities in Bulgaria preserved annual on an levels occupancy basis. the with the retailer is Pepco openings of store highest number half of 2019 with the second in 23 stores. for the new brands Some of during the Bulgarian market Miniso, are: period the reported Tezenis, Madame Coco, Nespresso, del Sarto, Brums, Bottega Avva, Ceylon and Lapin . • • •

The total supply of modern total supply The space* in Bulgaria was retail 796,000 the end of 2019, sqm at the to due 3% growth, registering in Varna. opening of Delta Planet centers space in shopping Retail Varna capita for 1,000 per to 247 sqm from increased 366 Bulgaria - sqm, and for to 114 sqm. (Fig. 1) modernization and Development the *** in retail of existing of construction continued; country in cities with began new projects such inhabitants, than 80,000 less as Shumen and . • • • BULGARIA 4

OBELYA NADEZHDA

Retail

H2 2019 | Bulgaria Park Jumbo LYULIN Plaza Mega Mall

Retail Market Overview | Colliers International | Colliers Overview Market Retail Mall of CENTER Sofia Serdika Center Park Center

LOZENETZ DRUZHBA Bulgaria Mall Paradise The Mall Center

BOYANA MLADOST Sofia DRAGALEVTSI Outlet Grand Center Kanyon SIMEONOVO Sofia Ring Existing shopping centre Mall

Shopping center under construction

Existing retail park

Retail park under construction

FIG. 2: PRIME RENTAL RATES** IN SOFIA (EURO/ 55 55 49 SQM / MONTH) 45 42 39 39 39 34 35

2015 2016 2017 2018 2019

Shopping centre High street

Souce: Colliers International H2 2019 | Bulgaria 55 Retail Market Overview | Colliers International 760 2019 34, Souce: Colliers International Souce: Colliers 100 2018 15, There was a slight increase in was a slight increase There on Sofia high tenants’ movement Vacancy to 6%. 3% from streets of maintained stable levels rates 8%. in Sofia - The main high street to register Vitosha blvd. continued more of occupancy, high level the past six months. than 99% for an recorded movement Tenants’ 5%. and reached of 4% increase unchanged remained Prime rents** shopping sqm for per - 39 euro sqm on per euro and 55 centres Vitosha blvd. (Fig. 2) • • • 2017 34,600 2016 29,500 160 Modern shopping centre stock* centre Modern shopping from retained its levels in Sofia year, namely the half of the first 390,660 sqm. the reconstructed The absorption of areas vacant hypermarket the half of the second in continued in 12,880 sqm and resulted year the whole leased space, while for sqm was 34,760 this indicator 2019 to compared of 130%, (an increase 2018). (Fig. 3) the main categories defined Four in centres demand in shopping half of 2019: Fashion the second (40%), Shoes and bags (12%), food and fast Café, restaurants (9%). (10%) and Sportswear 2015 26, • • •

RETAIL SPACE SPACE RETAIL

SOFIA FIG. 3: ABSORPTION IN SOFIA ABSORPTION IN SOFIA (SQM) 6

G Center Plovdiv H2 2019 | Bulgaria

EAST

CENTER

Grand Retail Market Overview | Colliers International | Colliers Overview Market Retail Trade Center Mall Plovdiv Plovdiv Plaza

Mall Markovo Tepe

Retail WEST Park Yug Retail Park Plovdiv

Retail Park Raikov

SOUTH Existing shopping centre

Shopping center under construction

Existing retail park

Retail park under construction

FIG. 4: PRIME RENTAL RATES** IN PLOVDIV 26 (EURO/ SQM / MONTH) 25 25 25 25 23 23 22 20 20

2015 2016 2017 2018 2019

Shopping centre High street

Souce: Colliers International H2 2019 | Bulgaria 77 Retail Market Overview | Colliers International 2019 2,800 Souce: Colliers International Souce: Colliers Tenants’ movement on high streets high streets on movement Tenants’ from slight decrease a registered to 5% year-on-year. 8% of 25 held levels Prime rents** centres shopping sqm for per euro high sqm for per and 23 euro (Fig. 4) street. in Retail opened New stores Lilly, in 2019: Pepco, Park Yug and Booktrading SoPharmacy, PizzAmerigo. • • • 2018 23,200 160 1, 2017 The supply of modern retail space* of modern retail The supply half of the second in in Plovdiv sqm. 87,500 2019 remained the in rate occupancy The average exceeded centers shopping three the for 85%. The absorbed space 2,800 sqm. (Fig. 5) was whole year was centers Demand in shopping the categories determined by and Café, (39%) Fashion (33%). food and fast restaurants • • •

RETAIL SPACE SPACE RETAIL

PLOVDIV FIG. 5: ABSORPTION IN ABSORPTION IN (SQM) PLOVDIV 8

VAZRAZHDANE H2 2019 | Bulgaria Delta Planet POBEDA

Retail Palah Park Center LEVSKI

Retail Market Overview | Colliers International | Colliers Overview Market Retail Varna Varna Mall

Grand Mall

WEST SV. IVAN RILSKI

HRISTO BOTEV

Existing shopping centre

Shopping center under construction PRISTANISTEN Existing retail park KOMPLEKS

Retail park under construction

FIG. 6: PRIME RENTAL RATES** IN VARNA 27 26 26 (EURO/ SQM / MONTH) 25 24

21 20 20 19 18

2015 2016 2017 2018 2019

Shopping centre High street

Souce: Colliers International H2 2019 | Bulgaria 99 Retail Market Overview | Colliers International 400 2019 33, Souce: Colliers International Souce: Colliers Tenants’ movement on high streets high streets on movement Tenants’ 2%; of slight decrease a registered vacant space doubled of the share to 12%. 6% from centers in shopping Prime rents** a slight recorded and on high street at 24 euro and stood reduction sqm, per sqm and 20 euro per (Fig. 6) respectively. • • 2018 2,550 320 4, 2017 Modern shopping centre supply* in supply* centre Modern shopping the opening with expanded Varna of Delta Planet and reached 123,000 sqm. the for rate occupancy The average the city in centers shopping three 85%. The inauguration surpassed the to of Delta Planet contributed space retail of absorbed high levels 7) sqm. (Fig. - 33,400 was centres Demand in shopping the categories by defined mainly and Entertainment (42%) Fashion (17%). • • •

RETAIL SPACE SPACE RETAIL

VARNA FIG. 7: ABSORPTION IN ABSORPTION IN (SQM) VARNA 10

Burgas Plaza PETKO R. SLAVEIKOV H2 2019 | Bulgaria

ZORNITZA BLACK SEA Retail Market Overview | Colliers International | Colliers Overview Market Retail

Galleria Burgas

LAZUR

CENTRE Existing shopping centre Shopping center under construction

Existing retail park

Retail park under construction

FIG. 8: PRIME RENTAL RATES** IN BURGAS (EURO/ SQM / MONTH) 25 25 25 24 22 22 21 21 19 19

2015 2016 2017 2018 2019

Shopping centre High street

Souce: Colliers International H2 2019 | Bulgaria 1111 Retail Market Overview | Colliers International 2019 3,340 Souce: Colliers International Souce: Colliers Tenants’ movement on high streets high streets on movement Tenants’ 8% from increase an registered the available with together to 13%, to 10%. 8% space from centers in shopping Prime rents** maintained at and high street 25 per 22 euro sqm and per euro (Fig. 8) sqm, respectively. • • 680 2018 2, 120 2017 2, The supply of modern retail space* of modern retail The supply stable - remained in Burgas 65,000 sqm. of occupancy level The average than malls was more in shopping space for 75%. Absorbed retail sqm. (Fig. 9) 2019 was 3,340 centers Demand in both shopping the categories by was driven and Café, (37%) Fashion (11%). food and fast restaurants • • •

RETAIL SPACE SPACE RETAIL

BURGAS FIG. 9: ABSORPTION IN ABSORPTION IN (SQM) BURGAS 12

MODERN SHOPPING CENTERS IN

H2 2019 | Bulgaria SOFIA SENTIMENT SURVEY

In the autumn of 2019, Colliers • In 2019, consumers spent the most International and GfK, conducted the on Fashion, Electronics and Home third study of attitudes towards modern accessories. Retail Market Overview | Colliers International | Colliers Overview Market Retail shopping centers in Sofia. Owners of • In terms of current shopping shopping centers, retailers and visitors trends, almost 80% of the survey shared their points of view. The study participants ordered monthly showed reasons for choosing one purchases online, and about half shopping center over another, favorite of them preferred to receive their brands by product category, how much items in physical stores. and what consumers spend on, how they spend their free time, attitude • Respondents also adopted some towards online shopping, attitude “green” shopping practices. The towards “sustainability activities”, the most commonly used ones are most preferred events and promotions. stopping to use plastic bags and returning clothes for recycling. The key findings of the study were:

• Food replaced Fashion from the top position and became the category with the highest weight defining tenant mix in shopping centre in 2019. (Fig. 10)

FIG. 10: MOST OFTEN Food 86 % PURCHASED Fashion 85 % CATEGORIES IN Gifts SHOPPING CENTRE 82 % Books 73 %

Services / Banks 73 % Sports equipment and accessories 71 % Shoes, bags, suitcases 67 %

Cinema ticket 63 %

Electronics 63 %

Children fashion and toys 61 %

Perfumes and cosmetics 56 %

Optics 54 %

Souce: Colliers International H2 2019 | Bulgaria 1313 Retail Market Overview | Colliers International In the first half of 2020 these half of 2020 the first In tenant their will projects diversify the in mix with new brands Sportswear categories Fashion, their thus and increasing Food, attractiveness. the German of stores The first chain KIK will open by discount mid-2020. retailers The main challenges for the will be the year throughout and shortage of qualified personnel environment competitive the highly on a small-scale market. • •

The market will maintain the will maintain The market years recent momentum gained in of sustainable economic as a result and stable consumption. growth participants the market Most of pace of the moderate up will keep stores more opening development, are new retailers the country; in to to Bulgaria. expected expand explore Demand will increasingly locations in cities with population of parks retail where 70,000-100,000, to be built. expected are Definitions: sqm. 10,000 above centres shopping covers * The overview of a 100 sqm a new lease for to be achievable estimated rent top open-market the average - ** Prime rent service charges excluding the best location, and specification in the highest quality unit of (net internal area) tenant incentives. taxes and not reflecting and sqm 2,000 covering units three with at least as a purpose-built development Park is defined *** A Retail with ample free environment park management and a car with centralized floorspace, of lettable more or parking. • • • FORECAST 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]

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