Districts 2 and 3 dominate Bucharest’s retail market, Colliers International reveals

The modern shopping centers stock in Bucharest, adding Veranda Mall, recently opened reached almost 1.16 million square meters, of which nearly 40 percent, 450,000 sq m, is in districts 2 and 3, according to Colliers International real estate consultancy data.

The 450,000 GLA sqm, totaling 900,000 built sqm approximately, contribute significantly to local budgets, given the special building tax.

“Taking into account the maximal percentage of 1.3 percent for building tax, it results that Bucharest’s districts 2 and 3 bring between EUR 7 million and EUR 8 million annually. These contributions are the highest in Bucharest, given that the two sectors are the busiest in terms of retail space,” Raluca Buciuc, Associate Director Valuation Services and Hospitality Advisory Services within Colliers International.

There is room in Bucharest for a large-scale shopping center, but the real estate consultancy company notes that it’s not recommended to be placed in district 2 or 3, already saturated considering the recent openings.

There were announced around 210,000 sqm for delivery in 2016 nationally, but the transactions with shopping centers fail to appear, although Romania is on the investment funds map and the retail sector shows an increasing interest.

Colliers International consultants estimate a trading price of EUR 3,000 – EUR 3,300/sqm, under a vacancy rate of 7-8 percent and an average rent of EUR 21-23/ sqm.

Buciuc said that the high competition in districts 2 and 3, could lead to a decrease of these values, which will increase the risk in investors’ view.

Bucharestbuilding taxColliers Internationaldistrict 2District 3large-scale shopping centerRaluca Buciucretail spaceshopping centerstrading priceVeranda Mall
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