Contents • Romania Economic Performance 2009 - sld. 3,4 • Retail Market 2008 – sld.5 • Bucharest – Retail Market May 2009 – sld. 6 • Retail Market Directions- 7,8 • Evolution of Modern Shopping Centres Stock – sld. 9 • Top 5 Shopping Centre Stock Delivered in 2008 in Europe – sld. 10
Romania Economic Performance 2009 • Despite a strong first 9 months of 2008, where GDP growth was 8.9% and foreign direct investments equalled 9 billion Euros, the final few months showed a rapid slow down in economic activity. The international crisis has since begun to have a serious effect on the Romanian economy. • As seen globally, there is uncertainty with regard to the economic evolution during 2009; how hard the local economy will suffer and when the conditions will improve are as yet unknown
Retail Market 2008 • 2008 was a record-high year for shopping centre development; over 721,000 sq m GLA was delivered onto the market, including 25 new projects and 12 existing scheme extensions. • Retail warehouses are still dominated by stand-alone units or units attached to shopping centre projects, few retail parks are operational. The first factory outlet centre in Romania, Fashion House developed by Liebrecht & Woods, was opened in December 2008 located in the Western part of Bucharest.
BUCHAREST – Retail Market May 2009 • Bucharest accounts for over 30% of the total retail turnover in Romania. • The existing shopping centre density = 277 sq m GLA/1,000 inhabitants, significant below the levels registered in others CEE Capitals, 400-600 sq m/1,000 people. • Main shopping centers are Baneasa Shopping City, Plaza Romania, Bucuresti Mall, Unirea SC and Militari Shopping Center. • High streets retail is concentrated in downtown Bucharest, along the major boulevards of Magheru / Balcescu and Calea Victoriei. • Existing hypermarkets: Carrefour, Cora, Real, Auchan and Kaufland. • Existing cash & carry: Metro and Selgros. • Existing DIY: Bricostore, Praktiker, OBI, Hornbach, Mr.Bricolage and Dedeman. • International fashion retailers: Zara, Marks & Spencer, Promod, Mango, Intersport, Nike, Debenhams, Esprit, Next, Peek & Cloppenburg, Reserved, Cortefield etc.
RETAIL MARKET DIRECTIONS • SUPPLY: Shopping centre stock under construction with announced delivery in 2009 is 32% lower than in 2008, but still accounts for a substantial 490,000 sq m of GLA • DEMAND: Stable demand from major international anchors, however, this is accompanied with a decreasing interest for expansion from under 500 sq m retailers whom have been affected by the drop in sales and the lack of finance • RENTS: Decreasing average levels for schemes outside Bucharest and peripheral locations • VACANCY: Increasing vacancy rate especially for decentralised locations and cities with a population of less than 200,000.
RETAIL MARKET DIRECTIONS • Despite a slowdown in November and December, total retail sales in 2008 registered a healthy year-on-year growth of 13%, with a higher result for the non-food sector (+14.4%), according to the Romanian Statistical Office. • Retail development was dramatically hit in the last four months of 2008, a large number of projects have been postponed for an undefined period of time or cancelled. • All types of developers have been affected by the worsening market conditions including a total lack of financing from banks, decreasing property value and an absence of possible investors for joint-ventures. There were no new projects started, while some of the schemes under construction that had not already secured financing were stopped.