ECONOMY: growth accelerates

In 2024, Bulgaria’s economy showed accelerated growth each quarter, ranking among the EU’s top 10 most dynamic economies. This was driven by domestic consumption and investments, while external trade faced challenges due to weak international demand.

By year-end, the economic environment remained positive. Inflation fell below EU and Eurozone averages, and unemployment hit a record low. Consumer optimism was high, with business leaders in manufacturing and construction showing increased confidence, while the services and retail sectors remained stable.

SUPPLY & DEMAND: large construction volume

In Q4, supply of retail space picked up from the previous three months to just over 18,000 sqm. This volume reflected the completion of two retail parks in Plovdiv and Pleven, the extension of an existing facility in Veliko Tarnovo, and partial completions in Vidin, Ruse, and Dobrich. As a result, the annual total reached 73,000 sqm, down 59% from 2023.

At the end of 2024 the total retail stock in the country amounted to 1.39 mln. sqm. Shopping centre stock was unchanged at 811,000 sqm, while retail park stock climbed 13% y/y to 577,000 sqm. Importantly, development activity is very strong. The construction of some 163,000 sqm of retail space is currently under way, while further 230,000 sqm are in planning.

In Q4 demand was relatively strong. Some 85 new stores were opened in shopping centres and retail parks, compared to 89 the year before. In terms of actual space, new openings amounted to 35,000 sqm, virtually evenly split between malls and parks. Key event in the quarter was the market entry of two new international retail brands – HalfPrice and Foot Locker – setting up flagship stores in shopping malls in Sofia and Burgas.

PRICING: edging higher

During the quarter, the vacancy rate across shopping malls and retail parks was in low single digits across the country. This lifted prime rents in Sofia to 43 euros/sqm in shopping malls and 12.5 euros/sqm in retail parks, with an upward outlook for the next six months. Meanwhile. prime yields slipped to 7.5% in mall and park facilities, with stabilization expected ahead.