Sofia's retail space vacancy rate almost doubles since lockdown

Sofia's retail space vacancy rate almost doubles since lockdown

The average retail space vacancy rate in Bulgarian capital Sofia reached 9% in the third quarter of 2020 - almost double compared to 5% before the spring lockdown, Forton, a strategic partner of Cushman&Wakefield for Bulgaria and Macedonia, said.

Occupier activity in the capital remains moderate, with limited number of new openings in the third quarter, Forton said in a quarterly retail market  report published last week.

Sports goods, food and beverages, home furniture, and drugstores are among the growing sectors, while many brands for clothes and shoes as well as food and beverage retailers are still holding off their expansion plans, Forton noted.

In the fashion and entertainment segments many retailers are optimising their store networks, which results in increasing vacancy in shopping centers and high streets.

Bulgaria reopened its shopping malls on  May 18 - two months after the government ordered them to shut down in order to limit the spread of the coronavirus disease.

"Despite the reopening, retail sales continued to fall in the summer months as a result of moderate income growth and unfavourable consumption trends," Forton noted.

After several years of gradual increase, the trajectories of rents for high-street and shopping center space have diverged in the last months. Asking rates for prime locations in well-performing shopping malls in Sofia remain stable, although landlords are more prone to incentives in negotiations. However, further downward pressure is expected due to the limited tenant activity, Forton noted.

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