The volume of newly opened retail outlets in Bulgaria hit 45,000 sqm in the second quarter of 2024, down 19% from the same period last year. This indicates some degree of market saturation and slowdown in newly opened stores. About 23% of the new establishments were in shopping malls and the rest were in retail parks. These are some of the key findings in the most recent report of commercial real estate consulting firm Cushman&Wakefield Forton.

“Typically, retailers are quite active unveiling new stores in the Spring. The fact that this year newly opened space is less compared to last suggests moderation and caution. The explanation for this is complex. First, there are fewer completed retail facilities. Second, the market has reached some degree of saturation and retailers conduct more in-depth analyses before committing to launch new outlets. Finally, political uncertainty is a factor on the minds of international players which prompts them to redirect capital towards more stable markets,” comments Georgi Muhovski, deputy manager Retail Space at Cushman & Wakefield Forton.

DIY, discount fashion, electronics, fashion, and furniture were the types of retail concepts which took up most space. No new retail brands entered the market in the April to June period.

RETAIL PARKS NOW MAKE UP 41% OF TOTAL RETAIL STOCK

Development activity, specifically the completion of new facilities, decelerated slightly also due to the gradual saturation of the market, says the consulting firm. A total of 30,000 sqm of new retail space were added to the total stock by the end of the second quarter. As a result, the stock reached 1.4 million sqm., of which some 41% were in retail parks. In fact, all completed space in the quarter was in retail parks as these become a key feature of the market.

The completed space in the quarter included a single fully operational retail park, that in Velingrad (10,550 sqm). The rest of the space was in facilities partially finished earlier or still under construction.

Looking forward, retail development activity appears stable. The total amount of space under construction amounts to 155,000 sqm. Retail parks make up about two thirds of this space. There are also at least eight retail park projects with additional 90,000 sqm in various stages of planning – two of which were announced during the quarter (one in the northwest and one in the northeast of the country).

SHOPPING MALL RENTS EDGE UP TO 40 EUR/SQM

Asking rents in Sofia shopping centers edged up to 40 euros/sqm in the second quarter, a slight increase from the prior period. Meanwhile, prime yields slipped to 7.75%. From the current standpoint, further upward movement in prices and yields in the rest of the year appear unlikely. The asking rent for retail parks in Sofia remained flat at 11.5 euros/sqm with no upward potential.