Rent prices in malls in Bulgaria decreased by 25% for one year, the consultant company Forton International has revealed.
According to the data, the first signs for the recovery of the retail areas market appeared in the third quarter of 2010.
Analysts point out that the total volume of retail areas in Bulgaria is currently 506,860 sq.m. After the completion of three large projects by the end of the year, the volume would increase by 77,000 sq.m. more.
The malls that are to be open are Varna Towers (30,000 sq.m.), Mega Mall Ruse (20,000 sq.m.) and Mall Galeria Stara Zagora (27,000 sq.m.).
Data from the company has showed that 280,000 sq.m. of retail areas are currently in construction. About 170,000 sq.m. are expected to be completed by the end of 2011.
At present, Bulgaria has 66,7sq.m. of retail area per 1000 people. By the end, the number should increase to 77 sq.m.
According to the "Retail Areas" Manager at Forton, Dimitar Kiferov, renting of retail areas in Bulgaria still faces difficulties but there was a slight improvement in the last quarter, mostly in Sofia.
A sign for the positive tendencies on the market is the construction of "Paradise Center" in the Sofia district Lozenets. After being completed, it would add 75,000 sq.m. of retail ares to the Bulgarian market, making it the biggest mall in the capital.
Forton data showed that the demand for rent is focused mainly on the top sites, while the smaller-scale projects and the uncompleted ones still face difficulties finding tenants. These are the factors that led to an increase in the vacant areas in the sector and to additional economic instability of some projects.
The return rates remain unchanged from the previous quarter and are about 9,5% for malls and 9% for commercial streets.
"These formats are occupied by international tenants with a proven business model. The rents are relatively low. This is what makes these projects sustainable over time," said Sergey Koynov, executive director of Forton.
The analysts expect that the recovery will not be fast because of the low purchasing power of the population outside the Bulgarian capital.