In terms of modern retail space, Bulgaria is still relatively under-supplied with an average shopping mall ratio of 15 sq m a 1000 capita.
In Sofia this ratio is 60 sq m against 1 000 inhabitants, which is still relatively low. By comparison, the average ratio for Europe is 182 sq m a 1 000 inhabitants and the corresponding figures for Bucharest and Belgrade are 71 sq m and 37 sq m, accordingly.
However, the segment is growing fast; in the second half of 2007 seven new shopping malls broke ground. Scheduled deliveries are expected to increase the retail inventory in Bulgaria by more than 100 per cent in 2008, according to Colliers H1 2008 Retail Market Overview. The mid-term (2008-2010) pipeline of projects is also significant with second-tier towns catching up with major cities.
If all commercial projects come into fruition, in 2010 the average leasable retail space ratio will peak at 185 sq m a 1 000 capita in Sofia, 183 sq m/1 000 in Plovdiv, 345 sq m/1 000 capita in Varna and 219 sq m/1 000 in Veliko Turnovo.
Figures show that the growing number of shopping complexes might seriously aggravate the market situation in Varna and Veliko Turnovo.
When it comes to retail projects, it is not only the size of the catchment area that matters, there is a number of other factors to be considered, such as: retail space productivity (the ratio between the amount of retail turnover/leasable area), the turnover/monthly rent ratio, household purchasing power, etc, says Manol Goygadjiev, manager retail space in MBL consultants. He explains that until recently, investors in large commercial centres were granted loans, amounting to 80 per cent of the project's value. Currently, they can rely on no more than 50 per cent bank finance. Squeezed lending might suspend or downscale some of the projects, he notes.
As far as prices, no significant changes are registered in shopping mall rents, and they command ranges of 30-60 euro a sq m. Nevertheless, inferior shopping mall schemes are expected to experience difficulties achieving full occupancy at those levels.
High street locations continue to enjoy good demand and retain past rental levels between 50-130 euro a sq m per month in Sofia.
