The gross lettable area of a retail park is usually 2,000 sqm or more of floorspace incorporating at least three units, with centralized management and an ample car park environment. Considering ICSC definitions and adopting them to the Bulgarian retail market, retail parks are divided into three different formats based on GLA: Large retail parks, Traditional retail parks and Convenience parks.
Large retail parks represent a larger scale concept and are usually located on the outskirts of the regional cities. Their GLA exceeds 15,000 sqm and provide an extensive commercial offer, including several anchors and big box format retailers. Such examples are Jumbo Plaza, Retail Park Sredetz, Retail Park Plovdiv, etc.
Traditional retail parks are with GLA of between 5,000 and 14,999 sqm. Therefore, this asset class is typically a preferred destination for grocery stores, health & beauty shops, pet stores, and all complimentary shops and services.
Convenience parks are usually being developed in small cities or residential areas of regional cities with fewer than 30,000 inhabitants, and they are usually the largest commercial facilities in those areas. This is the most compact format (GLA between 2,000 sqm and 4,999 sqm). They allow customers to shop quickly and are usually located on main roads or within the most populated areas of the city. The structure of their offer is similar to the retail park one, but due to the limited GLA, the retail spaces are smaller, and the number of stores is more limited.
Traditional retail parks constitute 44% of the total supply, followed by Large retail parks (43%) and Convenience parks (13%).
Some of the highlights for the distribution of the categories per retail park type:
- furniture and DIY are the leading category in Large retail parks with 45%;
- the leading category in terms of leased space in Convenience parks is fashion with 30% compared to 16% in Traditional retail parks and 11% in Large retail parks;
- the presence of supermarket and health & beauty is more established in Traditional retail parks and Convenience parks;
- more popular category in Traditional retail parks compared to the other two types is electronics.
More than 140,00 sqm are in the pipeline, as almost half of them are already in under construction phase. With the delivery of this pipeline to the market, some of the regional cities would reach maturity. And developers may want to be more cautious when considering further areas with potential.
The rising prices of construction materials are expected also to affect the feasibility of the projects, postponing them in the short term. This will lead to a decline in supply but we don’t expect changes in rental levels.
It is vital for landlords to stay ahead of the curve, that’s why leisure operators such as cinemas, restaurants, drive-thru concepts and gyms, are keen to get involved in the action. The inclusion of leisure will help to boost footfall and dwell time.
Read the whole report here.