Cushman & Wakefield Echinox has presented its report on Romanian retail market. The development activity in the retail sector remains animated, with over 230,000 sqm planned to be delivered in 2023, which is the highest level of the last six years.
Approximately 100,000 sqm of retail spaces were delivered last year, with retail parks having an 80 pct share, while cities such as Bucharest, Timisoara, Pitesti, Turda, Baia Mare, Slatina and Miercurea Ciuc benefited from such investments. The new supply will significantly increase in 2023, as over 230,000 sqm of retail spaces are currently under construction and are planned to be completed by the end of the year, a total which would represent a record for the last six years.
New projects consisting of 20,000 sqm GLA were completed in Q4 2022, while the total retail stock across Romania reached 4.2 mln sqm at the end of 2022, with 56 pct of it being in shopping centres, 38 pct in retail parks and 6 pct in commercial galleries.
The development activity will be dominated by shopping centres in years 2023-2025, which have a share of more than 60 pct of the total new spaces estimated to be built nationwide by 2025. This shift comes after a few years in which the developers' attention has been focused on retail parks, which have accumulated more than 80 pct of new deliveries.
The 2022 new supply and the plans for the next three years prove once again that traditional retail will continue to play a key role in the overall real estate landscape. This is primarily explained by the fact that malls, retail parks or commercial galleries are no longer just shopping destinations. They provide the perfect ecosystem for the new brands which are contemplating to enter the market, and also for the existing ones to adapt their sales policies to the changes in consumer behaviour. Moreover, customers have immediate access to almost any product, while the retail developments contribute directly and indirectly to community’s well-being through investments in infrastructure, job creation, and taxes.
Dana Radoveneanu, Head of Retail Agency Cushman & Wakefield Echinox
Almost 600,000 sqm of retail spaces are currently in different planning stages and are expected to be delivered between 2023 and 2025. Around 40 pct of this pipeline is in line to be completed by the end of the year, according to data from the major market players. Prime Kapital - MAS Real Estate, NEPI Rockcastle, Scallier, AFI Europe or Oasis remain among the most active developers of such properties on the short and medium term, which shows that the local market remains attractive even in the face of macroeconomic pressures. On the other hand, the overall appetite for consumption in Romania has encouraged new retailers such as Primark, Popeyes, TEDi or HalfPrice to enter the country and open their first stores in 2022.
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