Envato Elements: elements-PPHTBNV.jpg

BULGARIA
Retail Market
Snapshot
First Quarter | 2019

Market Indicators

Prime Rents: Headline rents slightly increased to €34/sq.m in

shopping centers, stable at €50/sq.m in high streets

Prime Yields: Stable at 7.25% in Sofia, expected upward trend in the

short term

Supply: Shopping center stock reached 810,000 sqm after the

opening of a new scheme in Varna

Demand: Improving retail sales encourage tenants to expand 

Prime Retail Rents – March 2019

HIGH STREET SHOPS                         €                      US$    GROWTH %

                                                          SQ.M     SQ.M    SQ.FT       1YR    5YR

                                                            MTH        YR          YR          CAGR

Sofia (Vitosha Boulevard)                52.0        624        65.5       4.0      5.4

Prime Retail Yields – March 2019

HIGH STREET SHOPS                  CURRENT   LAST    LAST      10 YEAR

(FIGURES ARE NET, %)                   Q               Q          Y        HIGH    LOW

Sofia (Vitosha Boulevard)             7.75          8.00      8.25      9.25     7.75

SHOPPING CENTRES                  CURRENT   LAST    LAST      10 YEAR

(FIGURES ARE NET, %)                  Q               Q          Y        HIGH    LOW

Country prime                                7.75          7.25      7.25      10.50   7.25

 

With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in

any transaction, such as financing, these are very much a guide only to indicate the approximate trend and

direction of prime initial yield levels and should not be used as a comparable for any particular property or

transaction without regard to the specifics of the property.

Overview

The retail property market continues its strong performance in

2019, underpinned by consumption growth and occupiers’

expansion. In the first quarter, the secondary cities witnessed

new stock contributions with the openings of Delta Planet Mall

in Varna and a retail park in Plovdiv. On the occupiers’ side,

the period was marked by the market entry of the fashion

retailer Pepco.

Occupier focus

In line with the general European trend, the Bulgarian

shopping center market enters a more mature phase which

translates into slowdown of development activity. Sofia and

the secondary cities are relatively saturated with little room for

new schemes and isolated completions over the last years.

Along with this tendency, Delta Planet Mall was the single

opening in Varna since the end of 2010. The project added

37,000 sq.m of GLA to the city’s stock (122,000 sq.m),

pushing up Varna to the second position countrywide in terms

of supply and shopping center space density. The opening of

the mall with 88% leased area proves that the retail market

still keeps momentum. Plovdiv was another city on focus in

the first quarter with the opening of a third retail park for less

than a year. Retail park Plovdiv – South comprises 5,200 sq.m

GLA with the discount shops chain Pepco and Billa as

anchors. Pepco entered Bulgaria with first location in Plovdiv

and currently is expanding towards Sofia and the regional

cities.

In Sofia, there were no significant market shifts at the

beginning of 2019. The shopping centers remain focused on

improving their performance. Currently, the vacancy rate

gravitates around 9% but is expected to gradually decrease

with the re-opening of the areas, vacated by Carrefour, in the

coming months. Headline rents in shopping centers are

slightly increasing, reaching €34/ sq.m in the first quarter.

Investment focus

After the tide of shopping centers acquisitions in Sofia, now

investors’ attention shifts to well performing retail schemes in

the secondary cities. Prime yields in Sofia are stable at 7.25%.

Outlook

Retail parks in the regional cities are new development

opportunity, since many retailers are looking for expansion in

the country. 

Shopping Basket