The Retail Market in Bulgaria 2013 Colliers International
1. Macroeconomics 2. Retail Market Overview •
Shopping centers
•
High Street
•
Demand
•
Forecast
3. Potential projects for expansion in Bulgaria 4. Retail Team
2
Bulgaria in Numbers
KEY ECONOMIC INDICATORS 15,0
Population of 7.5 million
10,0
10 cities over 100,000 inhabitants
5,0 0,0 2007
2008
2009
2010
2011
2012 2013(f) 2014(f) 2015(f) 2016(f)
4 cities over 200,000 inhabitants
-5,0
Average monthly income – 415 EUR
-10,0 GDP, annual variation in % Consumption, annual variation in % Unemployment, annual variation in %
3
Bulgaria in Numbers
2009
2010
2011
2012
2013f
34,9
36,1
38,5
40,1
42,1
4 617,9
4 804,4
5 251,5
5 503,7
5 806,8
GDP (annual variation in %)
-5,5
0,4
1,7
0,5
1,4
Consumption (annual variation in %)
-7,5
0,0
-0,6
2,3
2,3
Unemployment (%)
7,6
9,5
10,4
12,4
11,3
Inflation (CPI, annual variation in %)
0,6
4,5
2,8
3,0
3,0
GDP (EUR billion) GDP per capita (EUR thousands)
Source: FOCUS ECONOMICS
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1. Macroeconomics 2. Retail Market Overview •
Shopping centers
•
High Street
•
Demand
•
Forecast
3. Potential projects for expansion in Bulgaria 4. Retail Team
5
Shopping Centers - Bulgaria Market Overview
The current stock of contemporary shopping centers in Bulgaria amounts to 643,000 sq. m. (GLA) out of 720,000 sq. m. total retail stock.
3 new shopping centers were opened in 2012 – Galeria Burgas, Bulgaria Mall in Sofia and the first level of City Mall Stara Zagora.
With a pipeline of 5 contemporary shopping centers under construction, the total stock in Bulgaria will reach 904,000 sq.m. by the end of 2014.
In 2013 and 2014 the correlation “total leasable retail space in shopping centers per 1,000 inhabitants” in Bulgaria will grow from 85 sq. m. to 120 sq. m.
H&M opened its first stores in the country in 2012, choosing the big shopping centers in Sofia and the main secondary cities.
Debenhams entered Bulgaria with a flagship of 2,800 sq. m. shop in December 2012.
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Shopping Centers - Sofia Market Overview
The capital city holds 325,000 sq. m. (GLA) out of the total contemporary shopping centers stock in the country.
By the end of 2014 the total contemporary stock of shopping centers in Sofia will reach 445,000 sq.m. GLA with the opening of four new schemes – Paradise Center, Sofia Ring Mall, Mega Mall Lulin and Carrefour Lulin.
The correlation “total leasable retail space in shopping centers per 1,000 inhabitants” in Sofia will increase from 252 sq. m. in 2013 to 345 sq.m. by the end of 2014.
The average vacancy rate in Sofia’s shopping centers, which at the end of 2012 gravitated around 5%, is expected to increase in 2013.
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Shopping Centers – Overview Retail Space in Shopping Centres per 1,000 inhabitants in the big cities 500 450 400
sqm
350 300 250 200
2012
150
2013-14 (f)
100 50 0 Sofia
Plovdiv
Varna
Stara Zagora
Burgas
Ruse
Total Bulgaria
Prime Rental Rates (EUR/ sq. m./ month) (100 sq. m., prime location) Location Shopping Centers *
Sofia
Plovdiv
Burgas
Varna
30
20
21
23
*Prime Rent represents 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 reflective tenant incentives
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1. Macroeconomics 2. Retail Market Overview •
Shopping centers
•
High Street
•
Demand
•
Forecast
3. Potential projects for expansion in Bulgaria 4. Retail Team
9
High Street - Market Overview
The main high street in Sofia – Vitosha Boulevard is expected to continue recouping its prestige among leading fashion retailers.
During the second half of 2012 the High Streets in Sofia and the major cities registered considerable increase in vacancy level and retail replacement dynamics.
Fashion retailers, cafes and restaurants continue to be the most active players on the High Street.
In contrast to shopping centers, the High Street rental rate showed a considerable descending trend in 2012. Prime Rental Rates (EUR/ sq. m./ month) (100 sq. m., prime location) Location High Streets *
Sofia
Plovdiv
Burgas
Varna
25
18
20
20 10
1. Macroeconomics 2. Retail Market Overview •
Shopping centers
•
High Street
•
Demand
•
Forecast
3. Potential projects for expansion in Bulgaria 4. Retail Team
11
Retail Demand
In 2012 H&M, Debenhams, Liu Jo, Fornarina, Napapijri and Emporio Armani opened their first flagship stores in Sofia.
In 2012, 27% of the vacant retail space in Sofia’s shopping centers was absorbed by new brands. H&M and Debenhams had the biggest contribution.
AmRest - the largest independent restaurant operator in Central and Eastern Europe - opened the first drive-thru KFC restaurants in Sofia.
In the hypermarket food retailers segment, Carrefour was the only one to enter as an anchor tenant in the new shopping centers that opened in 2012.
The DIY segment continued to be very dynamic – Bauhaus entered the market with a flagship store in Sofia. Baumax opened two new stores in Ruse and Varna and plan another opening in Sofia in 2013.
The French sports giant – Decathlon, announced the opening of its first store in Sofia, close to IKEA and Sofia Ring Mall.
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Key Fashion Players on the Bulgarian Market over 200 fashion operators Max Mara
INDITEX ZARA Pull&Bear Stradivarius Bershka Massimo Dutti Oysho H&M Peek&Cloppenburg
Debenhams
Marella Juicy Couture Emporio Armani Dolce&Gabbana Cartier Frey Wille Ermenegildo Zegna Marccain Patrizia Pepe Karen Millen Calvin Klein
GAP Marks&Spencer Reserved LC Waikiki Esprit Deichmann Humanic New Yorker Terranova Mango Benetton 13
1. Macroeconomics 2. Retail Market Overview •
Shopping centers
•
High Street
•
Demand
•
Forecast
3. Potential projects for expansion in Bulgaria 4. Retail Team
14
Retail Market – Forecast 2013
Retail space supply will continue to considerably exceed demand.
The new shopping centers, due for completion in 2013-2014, will lead to significant growth in average vacancy rates.
The absorption of vacant retail space in the short run will be a challenge for retailers due to the increasing Supply-Demand discrepancies.
The political situation in the country is another factor which will slow down consumption growth.
Decathlon’s debut on the Bulgarian market will change the status quo in the sports goods segment, driving competition to a new level.
Competition in the cinema exhibition market will intensify driven by the appearance of a new cinema operator in the segment and the anticipated increase of the cinema screens in the country by more than 25%.
Vitosha High Street in Sofia is expected to continue recouping its prestige among leading fashion retailers 15
1. Macroeconomics 2. Retail Market Overview •
Shopping centers
•
High Street
•
Demand
•
Forecast
3. Potential projects for expansion in Bulgaria •
Sofia
•
Cities with population more than 200,000 inhabitants
3. Retail Team 16
Sofia
Official data : 1 205 000 inhabitants Unofficial data: Approximately 2 000 000
Unemployment rate: 3,6%
Official income/ capita: 549 EUR
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RETAIL PROJECTS IN BULGARIA Sofia (Existing) The Mall
Serdika Center
Colliers Exclusive Track Record
GLA (sq m):
66,000 sq m
Anchors: Carrefour, Inditex Group, H&M, Peek &Cloppenburg, New Yorker, GAP, Intersport, Marks&Spencer, Arena Cinema
GLA (sq m):
50,000 sq m
Anchors: Piccadilly, Inditex Group,H&M, Peek &Cloppenburg, New Yorker, Intersport, Reserved, LC Waikiki 18
RETAIL PROJECTS IN BULGARIA Sofia (Existing) City Center Sofia
Mall of Sofia
Colliers Mandate
GLA :
20,000 sq. m.
Anchors: Piccadilly, Technomarket, Marks&Spencer, Oviesse, Cine’Grand Multiplex** **expected opening in 2013
Colliers Exclusive Track Record
GLA:
21,500 sq. m.
Anchors: Piccadilly, Cinema City, United Colors of Benetton, Technomarket, H&M** **expected opening in 2013 19
RETAIL PROJECTS IN BULGARIA Sofia (Existing) Bulgaria Mall
Sofia Outlet center
Colliers Mandate
GLA :
33,000 sq. m.
Anchors: Carrefour, Debenhams, Arena Cinema, H&M, Esprit, Technopolis
GLA :
15,000 sq. m.
Brands: Mango, Lloyds, Reno, Benetton, Converse, Nike, Guess, Adidas
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RETAIL PROJECTS IN BULGARIA Sofia (Under Construction) Sofia Ring Mall
Paradise Center
Colliers Exclusive Mandate
GLA :
69,000 sq. m.
Anchors: Piccadilly, Technomarket, Mr. Bricolage, H&M, New Look, Cine’Grand Multiplex, Intersport
GLA :
80,000 sq. m.
Anchors: Carrefour, Technopolis, Cinema City, Playground, H&M, LC Waikiki 21
RETAIL PROJECTS IN BULGARIA Sofia (Under Construction) Mega Mall
GLA :
24,000 sq. m.
Anchors: Carrefour, Technomarket
Carrefour Liulun
GLA :
26,000 sq. m.
Anchors: Carrefour, Zora electronics
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High Street – Map Sofia
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High Street – Sofia SUPPLY
• Total supply – 43,354 sq m GLA • Average unit size is 170 sq m
VACANCY
• Stable in 2012 – 4% RENTS
• Decrease of approximately 52% • Prime rental rate - 25 EUR/ sq m/ month (for 100 sq m unit/ prime location)
BRANDS
• Mango, Zara, United Colors of Benetton, Aldo Shoes, Promod, Geox, Salamander, Nine West, Terranova, Adidas, Etam, Orsay, Levi’s, Guess by Marciano, Cartier, Juicy Couture, Emporio Armani, La Perla, Stefanel, Bulgari, Hugo Boss, Ermenegildo Zegna, Marrccain, Max Mara, Max and Co, Marella, Marina Rinaldi, Just Cavalli, L’Occitane, Yves Rocher, Estee Lauder, etc. 24
1. Macroeconomics 2. Retail Market Overview •
Shopping centers
•
High Street
•
Demand
•
Forecast
3. Cities with population more than 200,000 inhabitants
3. Retail Team
25
Map Cities over 200,000 inhabitants
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Varna
335 000 inhabitants
Unemployment rate: 4,3%
Official income/ capita: 400 EUR
27
RETAIL PROJECTS IN BULGARIA Varna (Existing) Grand Mall
Mall Varna
Colliers Exclusive Mandate
GLA :
50,000 sq. m.
Anchors: Carrefour, Inditex Group, H&M, LC Waikiki, Intersport, Deichmann, Humanic, Douglas, Arena Cinema
GLA :
33,000 sq. m.
Anchors: Piccadilly, Arena Cinema, New Yorker, Esprit, Galaxy bowling
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High Street – Map Varna
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High Street – Varna SUPPLY
• Total supply – 16,069 sq m GLA • Average unit size is 77 sq m
VACANCY
• Increase with 2% in 2012 – reaching 9% in total RENTS
• Decrease of approximately 15% • Prime rental rate - 20 EUR/ sq m/ month (for 100 sq m unit/ prime location)
BRANDS New Yorker, Mango, Hush Puppies, Stefanel, Miss Sixty, United Colors of Benetton
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Burgas
200 270 inhabitants
Unemployment rate: 3,9%
Official income/ capita: 361 EUR
31
RETAIL PROJECTS IN BULGARIA Burgas (Existing) Galeria Burgas
Burgas Plaza Colliers Mandate
Colliers Mandate
GLA :
37,000 sq. m.
Anchors: Carrefour, Zara, H&M, Technomarket, Deichmann, Humanic, Esprit, Cinema City, Pure Fitness, Playground bowling
GLA :
30,000 sq. m.
Anchors: Carrefour, New Yorker, LC Waikiki, Deichmann, Intersport, Technomarket 32
High Street – Map Burgas
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High Street – Burgas SUPPLY
• Total supply – 11,900 sq m GLA • Average unit size is 81 sq m
VACANCY
• Stable in 2012 – 3% RENTS
• Decrease of approximately 10% • Prime rental rate - 20 EUR/ sq m/ month (for 100 sq m unit/ prime location)
BRANDS
• United Colors of Benetton, Playlife, Adidas, Levi’s, Diesel, Hush Puppies, Geox, Tally Wejl
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Plovdiv
339 000 inhabitants
Unemployment rate: 6,7%
Official income/ capita: 344 EUR
35
RETAIL PROJECTS IN BULGARIA Plovdiv (Existing) Mall Plovdiv
Galeria Plovdiv
Colliers Exclusive Track Record
GLA :
20,000 sq. m.
Anchors: Piccadilly, Cinema City, H&M, Mango, New Yorker, Esprit, Technomarket
GLA :
45,000 sq. m.
Anchors: Carrefour, LC Waikiki, Adidas,
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High Street – Map Plovdiv
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High Street – Plovdiv SUPPLY
• Total supply – 28,824 sq m GLA • Average unit size is 150 sq m
VACANCY
• Increase with approximately 4% in 2012 – reaching in total 7% RENTS
• Decrease with approximately 56% • Prime rental rate - 18 EUR/ sq m/ month (for 100 sq m unit/ prime location)
BRANDS
• Terranova, Kenvelo, Adidas, Miss Sixty, McDonald’s
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1. Macroeconomics 2. Retail Market Overview •
Shopping centers
•
High Street
•
Demand
•
Forecast
3. Potential projects for expansion in Bulgaria •
Sofia
3. Cities with population more than 200,000 inhabitants 4. Retail Team 39
Retail Team Bulgaria
26 years experience of team members in retail real estate 520,000 sq. m. GLA in shopping mall leased under exclusive landlord representation (7 shopping centres already operational)
Over 65% market share
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THANK YOU!
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