The period was marked by high occupier activity both in Sofia and the countryside. The stable market result in new store openings both in Sofia and the regional cities.
Following full refurbishment, Plovdiv Plaza mall opened in November with 35,000 sqm GLA, and Zara, H&M and IKEA among the anchor tenants. This is the first new delivery for the last 2 years. With this contribution, the shopping center stock countrywide reached 773,000 sqm while density slightly increased to 108.4 sqm per 1,000 inhabitants. Back in Plovdiv, the real estate company Gazit Globe transformed a former Praktiker store into a retail park. Another one was opened by a local developer in the south part of the city. The next opening, scheduled for March 2019, is Delta Planet Varna. The new shopping center will have a GLA of 38,000 sq. m.
The sport goods chain Under Armour opened a first Bulgarian store in December 2018, the Body Shop opened three locations in Sofia. In the home improvement segment, IKEA and JYSK strengthened their positions with new outlets in the secondary cities. The coffee chain Starbucks also continued expanding with openings in Sofia, Burgas and Plovdiv in the last quarter of 2018.
Occupier activity results in a increase of rent levels which are expected to continue in 2019. As of the end of 2018, they rent levels reached €34/sqm for a premise of 100-150 sqm at prime location in a big shopping center in Sofia and €52/sqm for a similar premise on a main street in Sofia.
The demand for retail space in shopping centers remained stable in Q4. The vacancy outside of Sofia fell from 10.95% to 10.8%, if the effect of Plovdiv Plaza is excluded. The vacancy in Sofia stood flat at 14.7%. Plovdiv Plaza opened with occupancy of ca. 60% and contributed to the higher overall vacancy in the country – 14.1%, compared to 13.1% in the previous quarter.
Investment market also marked activity during the period. The purchase of Bulgaria Mall and Infinity Office Tower was the sole shopping center transaction in the fall of 2018. The new owner is the Spanish Squircle Capital investment fund. Prime yields remain stable at 7.25%, expected upward trend in the short term.