Spooked by market saturation and strong competition from rival projects, some investors may abandon their initial plans for the development of retail and amusement centers in Bulgaria, warns real estate consulting company MBL in a near-term report on the outlook for the local retail space market.
Bulgaria currently brings up the rear in Europe in terms of retail space per 1,000 population but the existing pipeline of projects suggests some cities may soon overshoot the European average.
Almost all mall developments are scheduled to open within a similar timeframe which could be beneficial to tenants in terms of the rent rates they will be able to negotiate, said MBL.
The forecast for Sofia is for 517,000 sq m of leasable retail space to be placed on the market through 2011.
Only 144,000 sq m of that total have been delivered with the remaining 373,000 sq m under development or construction.
A total of 202.000 sq m of retail space will be added in Varna over the next couple of years.
The retail space inventory in Plovdiv is seen at 164,000 sq m with 87,000 sq m already under construction.
Retail space per 1,000 population, currently at a nationwide average of 15 sq m, is expected to reach 650 sq m in Varna over the next 3-4 years, 500-510 sq m in Plovdiv and Stara Zagora and 400 sq m in Sofia.
MBL estimates that retail space inventory per 1,000 population will increase to 150 sq m nationwide and to 420-430 sq m in the bigger cities.
Therefore some mall developments in cities like Plovdiv, Stara Zagora and especially Varna may turn out to be unprofitable, warns MBL.
International consulting company Jones Lang LeSalle recently reported that the European average of existing retail space per 1,000 population was 170-180 sq m |
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