Many companies are waiting to enter Romania, but cannot seem to find the right space. It is not about halls, warehouses or offices, but about a piece of commercial property so that they could open a representative store. Bucharest is currently lacking quality commercial spaces, but things are bound to change soon. The total shopping centre and gallery space is to triple in less than two years’ time. So what will the outcome of this be?
One mall (Bucharest Mall), even though small compared with those in Europe, a former department store converted into a shopping gallery – Unirea Shopping Centre and several small shopping galleries. #leadend#This is all the quality commercial space available in Bucharest now. Two new hypermarkets – Carrefour Orhideea and Cora Granitul are set to open this year and each of them will come with its own shopping gallery. In addition, one more mall, Plaza Romania, 50% larger than Bucharest Mall and two hypermarkets (Cora and Carrefour) along with their respective shopping galleries will be dedicated next year. Furthermore, a number of extensive projects, such as the retail park at Carrefour Militari, the Militari Shopping Center and the mall at Casa Radio (Radio House) should be completed by yearend.
All in all, if things go according to plan, 175,000 sqm – twice more than the currently supply, will be put out on the market.
The short supply and the very high demand allow commercial property owners to get the prices they want most of the times. Things will not radically change any time soon, either. Even though supply will simply explode, rents will maintain in the short run, analysts say.
“Rents will not go down for as long as a critical mass is not attained but instead be adjusted a little bit,” Mircea Cleciu, Neocasa real estate agency general manager said. In other words, one Mall and a handful of shopping galleries are not enough for a city the size of Bucharest.
“Rents in the already existing shopping centres will stay put over the next few years, because of the contracts concluded for long term. The new centres, however, will charge somewhat lower rents to attract tenants, but the gap will not be that wide – less than 10%,” real estate company Colliers International’s Monica Barbu feels.
The tenants see eye to eye with the analysts at least on short-term prospects. “New and spectacular developments might occur in the medium run and lead to a sharp decline in the rents in Bucharest, ” Marius Ghenea, Flanco general manager believes. He says the new types of developments such as hypermarkets, cash & carry stores or integrated shopping centres (mall, department store or shopping gallery) might make part of the traditional retail space redundant, so that rents will be significantly cut to retain tenants.