One million square meters are now frozen

Investors, pushed by difficult finance, have promptly frozen new retail projects. A research made by Forton International shows that approximately 1.02 million sq m of retail space have been locked up. But some 791,000 sq m that are now under construction will be sufficient to pressure owners decrease rents and be creative when attracting tenants and buyers. 
Rents remain stable - between € 15 and € 80 per sq m per month in Sofia and €15-60 in other larger cities, Forton says. But severe competition facilitates price decline. The above-mentioned figures are not quite relevant, as contracts with retailers are made individually in accordance with the particular project and rented space. Therefore, average rents (per sq m) are usually closer to their minimum price levels.  

High streets have barely seen any dynamics. Our research shows rents still range between € 50 and € 120 per sq m. There are just a few high-end offers where supply is small as usual. One of the highest asking rental prices is found on Saborna St. – a 28-sq m unit is let for € 120 per sq m per month. The same price also refers to a 50-sq m property on Vitosha Blvd. near the National Palace of Culture.
Rental levels in other cities are stable too reaching € 80-85 per sq m. But retail property owners will not be excited about that fact because they want to sell them. Besides the fact that rental income is expected to become significantly lower, property owners will come up against the rising negative changes in yields. Forton forecast that large investment funds will see yield decline by 10% which is far beyond the levels of 7-8% registered a year ago. This, in real terms, means 20-30% lower property prices.