BULGARIA RETAIL MARKET OVERVIEW H2 | 2018 2 FIG. 1: RETAIL SPACE IN SHOPPING CENTRES PER 2016 2017 2018 1,000 INHABITANTS IN 400 | Bulgaria 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 Burgas Pleven Plovdiv Gabrovo Stara Zagora Veliko Tarnovo 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 3 Retail Market Overview | Colliers International | Colliers Overview Market Retail H2 2018 SUPPLY | Bulgaria • The total supply of modern to 254 sqm for Plovdiv, while in the shopping centres* in the second capital it remained unchanged – half of 2018 remained at 316 sqm. (Fig.1) 400,660 sqm in Sofia but increased • High streets in Sofia recorded a to 771,860 sqm at country level. marginal drop in vacancy rates The growth was due to the new from 8% to 6% while the top shopping centre opening in Plovdiv three regional cities registered a – Plovdiv Plaza – 35,000 sqm GLA. 1 % growth on annual base. This • A few retail parks*** started indicator was 3% for Plovdiv, 6% operations during the period for Varna and 8% Burgas. – three in Plovdiv (G Centre High street trends synchronized Plovdiv, Retail Park Raikov, Retail with those of shopping malls – Park Plovdiv – South) and one stable rents, high occupancy in Kostinbrod (Billa Park). levels and low tenant turnover for the better locations. • The ratio “leasable retail space in shopping centres per 1,000 inhabitants” at the year–end increased to 109 sqm for Bulgaria, DEMAND • Modern retail space demand in the occupancy reached over 90%. the capital marked stable levels of In comparison, the shopping absorption – 5,670 sqm during the centres in Sofia kept a second half of 2018, and vacancy rate of 5%. 15,100 sqm for the whole year. • The modernization and This was mainly due to expansion of existing retail parks replacements of existing tenants continued. LC Waikiki opened and openings of new ones. in Jumbo Plaza and will soon Competition between shopping be joined by CCC and Pepco. malls continued, with owners investing in building and layout • Food chains maintained their improvements to enhance leading position in terms of new customer interest and maintain a store openings during the last six competitive market positioning. months of 2018. The most active operators were Billa (4 stores), Lidl • Shopping centres in the country (3), T Market (3) and Fantastico (1). registered moderate levels of Billa leased a significant number absorption. The indicator was of shopping mall locations in Sofia, 30,760 sqm on an annual basis. previously occupied by Carrefour. For the well–established projects 4 The place where you will want to be | Bulgaria RENTAL LEVELS H2 2018 • Prime rental rates** in shopping centres and high streets in Sofia and the regional cities remained stable in the second half of 2018. (Fig. 2 & 3) Retail Market Overview | Colliers International | Colliers Overview Market Retail FORECAST • The primary focus of shopping from the fashion, shoes and home malls will continue to be market accessories sectors will consider positioning, likely to lead to tenant parks as expansion opportunity. mix optimization and building This tendency will trigger reconstructions. One example of investment interest toward retail this trend is the absorption of the parks. hypermarket areas in The Mall, • New brands in the low–priced Since 2018 the shopping center of Varna Mall has been changing: Paradise Center and Bulgaria Mall. segment (KiK and Pepco) are • Investment interest towards expected to open their flagship its architecture towards a modern, state-of-the art building shopping centres is anticipated to shops, which will further enhance continue in the first half of 2019. the development of retail parks its concept to evolve into a COMMUNITY CENTER. • A new shopping centre is expected and retail formats in general in the THE PLACE PEOPLE WANT TO BE. to open in Varna (Delta Planet smaller cities. Mall). The repositioning of the first • High streets will continue to attract mall in the city (owned by Mall strong retailer interest, evident Varna EAD) will be finalized by the from the high demand level. The end of 2019. reconstruction of Graf Ignatiev Str. Varna Mall was opened in 2008 and is known as one of the most popular shopping • Retail parks will grow in popularity is due for completion in the spring centers and entertainment destinations in Varna city and the region. The project as a retail format, especially in of 2019. This will create a new look features an excellent location, space, visibility and accessibility by both public cities under 100,000 inhabitants, and feel and will increase its appeal and private transportation. It is part of an established shopping zone of the city, where modern shopping centres to potential tenants. which includes a Kaufland hypermarket. are usually missing. In addition to • Significant change in prime rental their footprint in the bigger cities, rates in shopping centres and high In 2018 Varna Mall started a large-scale repositioning and renovation process local and international brands streets is unlikely. 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 Definitions: promote wellbeing and lifestyle activities. * The overview covers shopping centres above 10,000 sqm. ** Prime rent – the average top open–market rent estimated to be achievable for a new lease of a 100 sqm (net internal area) unit of the highest quality and specification in the best location, excluding service charges and taxes and not reflecting tenant incentives. *** A Retail Park is defined as a purpose–built development with at least three units covering 2,000 sqm or more of lettable floorspace, with centralized management and a car park environment with ample free parking. To rent space [email protected] +359 2 976 9 976 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.