Economy: services-driven expansion
Bulgaria’s economy continued to grow in Q4 2025 thanks to a strong services sector. Production indices for October and November show broad-based expansion. Output volumes increased at a pace faster than in the same period of last year in information and communications, real estate, professional, and administrative and support activities. Even if production was inconsistent in transport and hotels & restaurants, sales volumes in wholesale and retail grew at a healthy y/y rate.
Meanwhile, the industrial sector continued to struggle. Manufacturing and power supply contracted in October and November, and mining output was inconsistent. A single bright spot in the sector was construction, as production in buildings and civil engineering continued to rise.
A key development with wide economic implications in the fourth quarter was the turmoil stirred by the 2026 draft state budget. Higher tax, debt, and spending levels set in the document provoked mass protest and ultimately its withdrawal and the cabinet’s resignation. As a result, Bulgaria enters 2026 somewhat shaken but with high hopes for beneficial advancement in its first year in the Eurozone and positive change at the early elections in mid-April.
New supply highest in 2 years
New retail supply hit a 2-year high in the fourth quarter of 2025. Some 38,400 sq m of modern space was completed in this period, entirely in the retail park format. The result reflected the full launch of two small facilities in Kustendil and Lovech, the partial launch of two medium-sized parks in the outskirts of Kostinbrod and Plovdiv, the completion of what remained at Zita Park Kozlodui and Retail Park Svilengrad, as well as further expansion works at XoPark Sofia and Parkmaxx Plovdiv. For the full year, completed space amounted to 120,000 sqm at 14 locations.
The retail stock increased to 1.51 mln sq m, as of December 31, 2025. About 54% of this volume was in 26 shopping malls and the remaining 46% was spread across 67 retail parks. Retail saturation increased to 234 sqm per 1,000 people.
Development activity proceeds at a brisk pace. Construction works were ongoing at 14 retail park projects across 11 cities, at the end of Q4 2025. The volume of space in construction amounts to 140,000 sqm with at least 211,000 sqm more (12 retail park projects + 1 shopping mall) in various stages of planning. Retail park stock looks increasingly likely to exceed that in shopping malls by the end of 2026.
Demand: another excellent quarter and year under the belt
Solid demand was a key feature of the fourth quarter. A total of 79 store openings were recorded for 56,000 sq m, compared to 87 stores and 35,600 sqm a year ago. Openings in retail parks accounted for 49% of the store count and 80% of the store space. DIY stores accounted for 26% of total volume. Second came fashion (apparel) outlets with 15%, followed by grocers with 11%, fitness establishments with 8%, Shoes, bags & accessories stores with 7%, mixed retailers with 6% and others (26%). From a store count perspective, most active category was fashion (14 outlets), followed by food & beverage services (9), and health & beauty (9).
For the calendar year 2025, store openings were up 20% to 297 units and up 40% to 161,000 sq m. It was the second-best year since 2016.
Store activity in shopping malls was particularly strong in Sofia’s The Mall and Paradise Center, opening 5 outlets each. Meanwhile, Serdika Center, Galleria Burgas, Sofia Ring Mall and Plovdiv Plaza opened 3 new stores each. In the retail park format, XoPark Sofia topped the ranking with 7 new stores, followed by Zita Park Kozlodui with 6 and Retail Park Kostinbrod with 5 units.
The Italian retailer OVS was a key market entry in the fourth quarter. The company which has some 2,200 outlets worldwide, offering apparel for men, women, and children, as well as beauty and home decoration products, opened stores in The Mall, Mall of Sofia and Mall Markovo Tepe. The retailer entered Bulgaria directly by establishing a local subsidiary.
Mall rents creep up as parks remain flat
Available space in malls and parks was generally low across the country. In shopping malls in Sofia, the vacant space was practically unchanged at less than 9,000 sqm for a vacancy rate of 2.2%. In the entire retail park segment, available space narrowed to an estimated 11,000 sqm for a vacancy of 1.5%. Prime rents in shopping malls in Sofia inched up slightly to €47.00 /sq m, while rents in retail parks were flat at € 13.0 /sq m. Prime yields for malls and retail parks drifted sideways – 7.5% and 7.25% respectively.
Investment market: two dots on the radar
Several retail assets changed hands in the last quarter of 2025. The acquisition of Mall Plovdiv for an undisclosed sum grabbed the headlines. The facility was bought by TSH Investment, a joint venture between Trinity Capital and HUS Invest, which also owns Sofia’s Park Center shopping mall. The deal underwent regulatory scrutiny. Other notable transactions included two retail parks with a combined GLA of 18,500 sq m, each acquired by investors with experience in the hospitality segment. For the full year, the value of retail investments is estimated at almost 80 million euro, up from about 55 million euro the year before.
