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MARKET OVERVIEW H1 2018
July 2018 | Region Research & Forecast Report | Colliers International
SOFIA
RETAIL
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H1 2018 | Sofia Retail Market Overview | Colliers International
HIGHLIGHTS The high investment interest in shopping centres seen in 2017 continued through the first half of 2018 with the acquisition of Mall of Sofia by GTC. The market of modern shopping centres1 in the capital reached maturity, particularly evident from: Total stock remaining unchanged compared to the second half of 2017 – 400,660 sqm; Demand, still focused on established projects (average occupancy levels over 95%), significantly exceeding supply;
The international brands NYX, The Body Shop and Sinsay entered the Bulgarian market. The Sofia high streets’ tenant movements sustained at its previous levels. Vitosha Blvd. experienced a 10% growth in rental levels’2 due to a shortage of retail space supply. A complete reconstruction of “Graf Ignatiev” Str. was launched in May 2018, which is expected to strengthen the street’s appeal to potential tenants.
Retail space absorption at 9,450 sqm: a 48% decrease compared to the second half of 2017; 14% of the absorbed retail space resulted from the internal relocation of alreadyexisting shopping centre tenants; this solidified the 2017 trend of active tenant mix optimization aimed at increasing footfall.
SHOPPING CENTRE INDICATORS
1,266,295
400,660 sqm
Population
Supply
40,000 sqm
12%
Under construction
Vacancy
316 sqm
Retail space in shopping centres per 1000 inhabitants
10
Number of shopping centres
39
9,450 sqm
Prime rental rates2 (sqm/month)
Net absorption
14% Internal movement of tenants3
HIGH STREETS INDICATORS
8%
55
Prime rental rates2 (sqm/month)
Vacancy
5%
4%
4%
4%
<<< >>>
<<< >>>
<<< >>>
<<< >>>
<<< >>>
Health & beauty
Accessories & jewelry
Bookstore & stationery
Groceries
Shoes & bags
Electronics & technology
Other
>>>
5%
>>>
11%
>>>
22% >>>
26 %
>>>
CHANGES IN TENANT MIX
Fashion
Cafes, restaurants, fast food
Services
2%
8%
Retail Park Sredets T h e b i g g e s t r e ta i l pa r k i n S o f i a
Characteristics Address: 21, Istoria Slavianobalgarskaia Blvd. (behind Central Railway Station) Access: мunderground, bus, tram NOVI ISKAR Distance to Sofia Center: ~ 10 min. by car to Romania Land plot size: 78,650 sqm Rin gR oa MRAMOR GLA: 37,984 sqm d Catchment area: Banishora, SVETOVRACHENE Nadejda, Lev Tolstoi, Voenna Rampa, Orlandovci neighbourhoods KUBRATOVO NEGOVAN Parking lots: 1,160
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Retail Park Sredets
Slivnitsa Blvd
KREMIKOVTSI
CHEPINTSI
t en ng Ta rn the or
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LOKORSKO
ETC 4, 8, 10
CITY CENTER to Plovdiv, Burgas and Turkey
T e n a nts : Construction hypermarket Bauhaus
The only Bauhaus in Bulgaria The biggest DIY format in Bulgaria
Household goods chain JYSK Supermarket CBA Lighting products shop Eltron OOD Office Express art 93
Adva nta g e s : • • • • • •
Excellent location on a big boulevard Easy access via private and public transport Proximity to some of the biggest neighbourhoods in the Northwestern part of Sofia Area, which is not saturated with retailers Synergy between the tenants Spacious parking
Consultant: Investor: Colliers International Prime Leasing EOOD phone: +359 2 976 9 976 phone: +359 884 466 042 retail.bulgaria@colliers.com m.karabiberova@texim-am.bg
Copyright © 2018 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
ехнологии
мебели
“BIG-BOX” SEGMENT AND RETAIL PARKS 4 IN SOFIA ОБЕЛЯ
НАДЕЖДА
OBELYA
NADEZHDA
ЛЮЛИН
ВАСИЛ ЛЕВСКИ Retail Park Sredets
LYULIN
VASIL LEVSKI
ЦЕНТЪР
ОВЧА КУПЕЛ
Jumbo Plaza
ЛОЗЕНЕЦ
CENTER OVCHA KUPEL
ДРУЖБА
LOZENETZ
DRUZHBA
БОЯНА
LEGEND: • • • • • • • • •
Groceries Electronics & technologies Home accessories/Furniture DIY Sports equipment Children & maternity Entertainment Fast food Health & beauty
МЛАДОСТ
ДРАГАЛЕВЦИ BOYANA СИМЕОНОВО
DRAGALEVTSI
MLADOST
SIMEONOVO
рзо хранене
а
HIGHLIGHTS The food chains category led the big-box segment in Sofia in terms of expansions – Lidl opened 2 locations, T-market – 2 and Billa – 1. Hyper- and supermarkets’ pursuit of raising customer foot-fall and improving their shopping experience saw a strengthening of the trend of introducing new concepts or enhancing existing ones.
The development and modernization of retail parks continued at a stable pace. The Bulgarian supermarket chain CBA and the lighting centre Eltron opened new locations in Retail Park Sredets.
The tenant mix optimization is likely to lead to the reconstruction and reorganization of several shopping centres.
The interest in retail parks is foreseen to increase and the tenant mix to diversify into new categories other than Home accessories/furniture & DIY, including Fashion.
FORECAST
New concepts and operators are expected to enter the market. The share of the Entertainment & Leisure sector is likely to increase both in shopping malls and on the market in general.
No significant change in shopping centre and high street prime rental rates2 is forecasted.
1) The overview covers shopping centres above 10,000 sqm. 2) Prime rent - the average top open-market rent estimated to be achievable for a new lease of a 100 sqm (net internal area) unit of the highest quality and specification in the best location, excluding service charges and taxes and not reflecting tenant incentives. 3) Internal relocation of already existing tenants in the shopping centres. 4) Retail park is defined as a purpose-built development with at least three units covering 2,000 sqm or more of lettable floorspace, with centralized management and a car park environment with ample free parking.
H1 2018 | Sofia Retail Market Overview | Colliers International
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FOR MORE INFORMATION
Boryana Peneva Manager Retail Services +359 2 976 9 976 boryana.peneva@colliers.com
Kamelia Radova Market Researcher +359 2 976 9 976 kamelia.radova@colliers.com
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Copyright Š 2018 Colliers International.
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