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BULGARIA
Retail Market
Snapshot
Second Quarter | 2019

Market Indicators

Prime Rents: Headline rents slightly increased to €36/sq.m in

shopping centers and €54/sq.m in high streets

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

Supply: Shopping center stock is stable at 810,000 sqm

Demand: Improving retail sales and new sup

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)                54.0        648        72.7       8.0      4.2

Prime Retail Yields – March 2019

HIGH STREET SHOPS                  CURRENT   LAST    LAST      10 YEAR

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

Sofia (Vitosha Boulevard)             7.50          7.75      8.25      9.25     7.50

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 Bulgarian retail property market witnessed a dynamic

half-year with a new shopping center and a number of store

openings. Sofia and the big cities remained on the spotlight

offering variety of opportunities for occupiers’ expansion.

Occupier focus

The expansion of The Mall, one of the biggest shopping

centers in Sofia, was among the notable retail events in the

second quarter of 2019. The extension encompasses 12,000

sqm with about 40 new stores, utilizing the area vacated by

the Carrefour hypermarket. Similar restructuring is taking

place in Paradise Center and completion is expected by the

end of the year. These reorganizations resulted in strong

leasing activity in the second quarter of 2019 with a series of

new openings in the shopping centers in Sofia. A moderate

decrease of the vacancy rate was another effect with the

average rate falling from 9% to 7% with prospects for further

decline.

On the occupier side, the shopping centers’ restructurings

open the door for rapidly growing brands to add new locations.

The supermarket chain Billa, Danish home decor retailer

JYSK, shoes stores Humanic and the fashion brands Sinsay

and Reserved illustrated the trend with new openings in the

second quarter. Polish discount chain Pepco, which made its

Bulgarian debut in March, also opened new stores in Sofia,

Varna and Ruse over the period. In general, the market in

Sofia and the big cities remains driven mostly by restructuring

of operating shopping centers. After the openings of Delta

Planet Mall in Varna and Plovdiv Plaza, currently there are no

large retail schemes under construction.

Driven by tenant activity and the lack of new projects, headline

rents in Sofia continued to grow, reaching 36 euro/sqm in

shopping centers and 54 euro/sqm in high streets.

Investment focus

After the large shopping centers acquisitions in Sofia, now

secondary cities offer investment opportunities. Prime yields

in Sofia are stable at 7.25%.

Outlook

Shopping centers restructurings will further enhance leasing

activity in Sofia and the big cities. 

Shopping Basket