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Deliveries of space in modern retail developments were, in 2009, below the level announced at the end of 2008.
A study completed by the retail team of Colliers International reveals the fact that in 2009, the deliveries in terms of shopping centers and galleries (over 7,000 sqm, without hypermarkets or big box units) turned out to be very different from the forecasts announced in 2008 or at the beginning of 2009.
If at that time more than 20 projects were announced to be delivered in Bucharest and the country side, with a total of 835,000 sqm GLA (274,000 in Bucharest, 561,000 in the country side), now that we've reached the end of the year we can draw a line and analyze what happened in the market.
Due to the weakening of consumers' confidence, therefore of retailers' confidence and to the difficulties encountered in obtaining financing for most of the projects, only 3 shopping centers have been delivered in Bucharest from the beginning of the year: Militari Shopping Center, Grand Arena and Cotroceni Park - and one extension of Plaza Romania, adding 157,500 sqm to the existing stock. In the country side, the Galleria shopping centers developed by GTC in Suceava and Piatra Neamt, Era Oradea and the extension of Iulius Timisoara and ERP Focsani have been completed and brought an additional 70,000 sqm to the existing stock.
Basically only 57% of the announced GLA for 2009 has been delivered in Bucharest and only 13% in the country side, the remaining projects being delayed, on hold or even canceled in some cases.
This enormous difference between what had been announced that would be delivered in 2009 and what has actually been delivered has actually a beneficial effect on the market because of the serious imbalance between the demand and supply of retail spaces, especially in cities with less than 300,000 inhabitants. We will witness the same phenomenon in 2010, when we expect deliveries of only 6 projects totaling 126,000 sqm, from wich 2 projects are in Bucharest.
"Concerning the 6 shopping centers announced by developers for delivery in 2010, we are likely to see delays for some of them. It is also possible that some shopping centers for which construction works were stopped at the beginning of 2009 to resume construction this year", says Georgiana Andrei, Retail Division Manager within Colliers International. "Thus, it is unlikely to see other deliveries in 2010 than those already officially announced", concluded Andrei.
Image: Suat Eman / FreeDigitalPhotos.net
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