The commercial property market in Bulgaria is slowing down

The opening of two new malls in 2018 will be a challenge because of the existing ones

The commercial real estate market can not reach the volume of the previous year due to the limited supply of first-class assets. The reason is that last year was a record volume of investment deals with retail space, brokers reported.

The market is now fully subject to the desire of new owners to strengthen their market positions. According to analyzes of property companies, rising incomes in the country are followed by an increase in consumption, which is key to the development of the retail space market.

There is no interest from new investors, so we expect transaction yields to remain around 7% with a downward trend in the coming months. In the longer term, this trend is unlikely to keep up with rising interest rates and rising financial resources.

The rental market in the first months of the year remains relatively active. Due to the positive economic outlook in the country, many traders consider the current moment to be suitable for expanding their retail outlets.

Sofia and the big cities remain the focus of the leading companies in the FMCG sector, sporting goods chains, low and middle price fashion brands and health and beauty products. The interest of the tenants corresponds to the ambition of the landlords to improve their positioning on the market. As a result, a number of great openings marked the first three months of 2018 - Billa and Douglas in Bulgaria Mall, 5 new brands from the LPP group at Sofia Ring Mall and dm drugstore at Mall Plovdiv.

Rents in prime locations - in shopping centers and shopping streets in Sofia are moving smoothly upwards due to the lack of new supply.

The average rent of a shop with an area between 100 and 200 square meters of good location in the center of Sofia is 50 euro / sq. m. In shopping centers it is about 32 euro / sq. m. The actual occupancy in the well-represented objects is almost 100%.

Unlike the capital, in other major cities in the country, the supply of retail space is increasing. The second half of the year is expected to open Delta Planet Mall in Varna and Plovdiv Plaza in Plovdiv. In both cities, there are already two working malls, and the opening of a third will be a challenge. Expansion plans are also available at the Galleria Mall in Burgas.

Experts expect the focus of investors to shift to office space in 2018. However, this will open doors for expansion of various groups of tenants, such as canticles, bank branches, fitness halls, cafeterias, modern forms of book stores and places for cultural meetings and events.