Retail parks continue to propel modern retail in Bulgaria. This trend, which took shape over the past couple of years, remains steadfast at the start of 2024. Four new facilities brought about 15,000 sqm of modern retail space to the market since January, according to the most recent report of commercial real estate consulting firm Cushman&Wakefield Forton.

“The retail park segment in Bulgaria is still relatively new when compared to peers in Central and East Europe. This is also one of the reasons for the dynamic development that we observe. But, the purely quantitative expansion aside, I believe that we will soon also see a qualitative growth with the implementation of new concepts not unlike the ones established on advanced European markets,” comments Georgi Muhovski, deputy manager Retail Space at Cushman & Wakefield Forton.

According to Muhovski, while the typical tenant mix in Bulgaria includes mostly traditional retailers focused on fashion, shoes, furniture, and electronics, in advanced European markets the mix also adds movie theatres, coworking spaces, restaurants, and lodging facilities.

RETAIL PARK STOCK AMOUNTS TO 536,000 SQM AT THE END OF MARCH, COMPARED TO SOME 831,000 SQM IN SHOPPING MALLS

The four new facilities which launched operations since the start of the year, did so just partially, and would bring an additional 18,000 sqm to the market within the next nine months, according to the consulting firm. At the end of March, 2024, the total retail park stock in Bulgaria amounts to 536,000 sqm.

The overall volume of new modern retail openings in the quarter weakened significantly to about 20,000 sqm from 58,000 sqm in Q4 2023. Near 75% of this space was set up in retail parks.

NEW BRANDS WITH AMBITIOUS EXPANSION PLANS ENTER THE MARKET

Furniture, toys, and fashion discounters swooped nearly half of the total volume. There were several notable new market entries – the British sports-fashion retailer JD Sports, the Romanian optics chain Lensa, and a new franchise holder of Burger King with an ambitious expansion plan.

Looking forward, the retail park segment is expected to significantly pick up the pace in the second quarter. Up to three new facilities are scheduled to start operations, on top of additional business starts from facilities partially opened in Q1.

Asking rents in Sofia shopping malls reached 39 euros/sqm in the first quarter. Asking rents at retail parks also moved up a notch to 11.5 euros/sqm. In this segment, the prospects for the rest of the year appear to be flat.