Romanian Retail Market Stabilizes, Existing Shopping Centers Have The Edge - JLL

05.03.2011 By Andrei Circhelan

The Romanian retail market continues to show signs of stabilization in the first quarter this year, as developers and retailers are seeking new opportunities for development, real estate consultants Jones Lang LaSalle said in a report.

"No significant new project was delivered on the market in Q1 2011. The only exception is the extension of Promenada Mall in Braila which is mainly focused on entertainment, with an approximate GLA of 7,000 sqm," JLL report showed.

It added that--while 15 retail openings have been announced for delivery in 2011--only 9 openings represent a more realistic projection.

"The largest and most notable projects to be delivered in 2011 include: Maritimo Shopping Center in Constanta, Palas in Iasi, Colosseum Retail Park and Baneasa Shopping City's extension in Bucharest," the company noted.

By comparison, in the first quarter of 2010 more than 100,000 square meters were delivered to the market, namely Sun Plaza in Bucharest (80,000 sqm) and Atrium Center in Arad (30,000 sqm).

Demand continued to focus on existing shopping centers, as well as on large projects, whose launch date is somewhat uncertain.

The retail market gained momentum by the opening of the first three H&M stores in Romania. "Luxury brands are also assessing the market, with Burberry announcing the opening in 2011 of their flagship store on Calea Victoriei," the document reads.

Rents have also stabilized, at EUR65-75 per sqm per month in shopping centers. High street rents remained unchanged as well, at EUR60-70 per sqm per month.

"Fit-out contributions, stepped rents or even initial turnover-only rent periods are still a key driver in the leasing process of less dominant shopping centers and are especially achieved by international retailers which act as anchor tenants for both existing and under construction retail schemes," JLL report noted.

The company's analysts forecast that, even though 2011 should see a higher number of projects launched, the amount of shopping centers active locally is still below European standards, which means existing units will have a competitive edge.

Keywords:
RETAIL MARKET
, SURVEY
, JLL

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