Rents in shopping malls in Bulgaria were 25 per cent down year-on-year in the third quarter, consultant Forton International said.
The inventory has grown to nearly 507,000 square meters of gross lettable area with three new projects to add further 77,000 sq m by the year end.
By the end of next year supply is expected to expand with further 170,000 sq m putting additional pressure on occupancy rates.

Although most of the pipeline retail schemes undergo difficult leasing process, we have noticed recent revived development activity in the capital.
In Q3 construction works of "Paradise Center" in Lozenec district started. Upon completion this will be the largest retail scheme in Sofia, delivering approx. 75,000 s sq.m.

Demand for retail space is stronger than in 2009 but still volatile and lags behind the intensive supply paces.
In secondary cities occupier demand remains serious only for top schemes while most of the newly opened or pipeline projects are experiencing further difficulties in the leasing process.
All this has resulted in growing vacancies in the new shopping malls and brought additional doubt on the sustainability of these schemes.

Prime shopping center rent levels recorded an annual decrease of approximately 25% compared to Q3 2009.
High street rents remain unchanged since the previous quarter and are estimated at approx. € 55/sq.m./month for Sofia and in the range € 30-40/sq.m./month for the other large cities .
The investment activity is still low, as the highest interest in the retail property sector is focused on retail parks and sale leaseback schemes of big-box formats.

Although the retail market is generally unstable, there is certain stabilization of the rent levels and gradual recurrence of retailers’ interest.
This is indicative that the mid -term outlook for the sector is fairly positive for the capital and slowly improving for other large Bulgarian cities.