The ECONOMY exceeds expectations

There were several major economic developments in Q3 2025. The Council of the European Union formally approved Bulgaria’s accession to the euro area. Standard & Poor’s and Fitch upgraded the country’s long-term foreign currency credit rating. GDP data for Q2 exceeded expectations, and finally, the IMF, the World Bank and the EBRD all revised upward their Bulgaria forecasts, adding 50+ basis points on top of their previous GDP projections for 2025 and 2026.

Most economic indicators maintained their trajectories in Q3. Output in retail, services and construction grew y/y, while industry continued to suffer. Domestic consumption was again the key pillar of the economy, benefitting from a significant wage hike in the public sector in Q2. External demand was weak. Exports of goods dropped in low double digits, as did the preliminary numbers for FDI in July and August. Surveys showed that business climate was stable and economic sentiment remained positive.

SUPPLY: plenty of new space and more to come

New retail supply was plentiful in the third quarter. As much as 34,000 sqm of new modern space was completed in the period, up 24% q/q. This volume reflected the opening of Holiday Park Krasno Selo and partial introductions in other retail parks in Sofia, Svilengrad, Kozloduy and Rakovski.

Total retail stock edged up slightly to 1.47 mln sqm at the end of September. About 55% of this volume was in 26 shopping malls and the remaining 45% was spread across 63 retail parks. Retail saturation inched up to 228 sqm per 1,000 people.

Development activity remains intensive. Construction work was ongoing at 13 retail park projects across 11 cities, at the end of Q3 2025. The volume of space in construction amounts to 130,000 sqm with at least 240,000 sqm more (14 retail park projects + 1 shopping mall) are in various stages of planning. The stock in retail parks looks increasingly likely to hit 800,000 sq m by the end of 2026.

Demand: very strong store openings

Demand was very strong in the third quarter. A total of 86 store openings were recorded for over 39,000 sqm, up from 75 stores and 34,000 sqm in the previous quarter. Openings in retail parks accounted for 55% of the store count and 84% of the store space. Electronics & electrical appliances retailers took up the most space, a little over 8,000 sqm. Fashion (apparel) retailers came second with 6,289 sqm, followed by grocers with 4,652 sqm, shoes, bags & accessories retailers with 4,119 sqm, and mixed retailers (like KiK, Pepco, Tedi) with 3,368 sqm. From a store count perspective, most active were food and beverage operators with 17 outlets (3,182 sqm), followed by Fashion (apparel) retailers with 15 outlets and shoes, bags & accessories retailers with 10.

Store activity in shopping malls was particularly strong in Sofia’s The Mall, where as much as 9 outlets were opened. Second place was shared between Serdika Center, Mall Plovdiv and Paradise Center with four outlets each. In retail parks, Holiday Park Krasno Selo was undisputed leader with 26 stores, followed by XOPark Sofia with 9 and Retail Park Svilengrad with 5 units.

Worldbox was the notable retail brand that entered the market during the quarter. Its store offering includes proprietary, partner, and licensed brands in the categories of clothing, footwear, and accessories. The brand is part of the portfolio of the Polish retailer CCC, which is a leading player in Bulgaria. Worldbox will likely be positioned in the retail park segment. The brand launched operations in Bulgaria in XoPark Sofia and a second store is due to open in Retail Park Svilengrad latter this year.

Pricing: rents in malls creep up

Available space in malls and parks remained low across the country. In shopping malls in Sofia, the vacant space was just 9,000 sqm for a vacancy rate of 2.2%. In the entire retail park segment, available space was estimated at about 15,000 sqm for a vacancy of 2.3%. Prime rents in shopping malls in Sofia inched up slightly to €46.50 /sq m, while rents in retail parks stood unchanged at € 13.0 /sq m. Prime yields in malls and retail parks drifted sideways at 7.5% and 7.25% respectively.

Investment market: two dots on the radar

Retail was on the radar of commercial real estate investors in Q3 2025. Two buildings changed hands in the period. City Center Stara Zagora, a premise with some 23,000 sqm of space, was acquired by ES GI Solaris EAD, a firm related to Insa Oil, a leading petrol produces operating a network of 26 petrol stations. The deal is valued at about 6.5 million euro. The second property, a building on Plovdiv’s high street (2,300 sqm aboveground built-up area) housing an H&M store was bought for 5.7 million euro by Tehnopark 2012 AD.