CB RICHARD ELLIS

MarketView
Romania Retail
H1 2009

OVERVIEW

Retail-related activities have generally been in a stand-by mode in the first months
Quick Stats of 2009, resulting in some of the lowest sales figures for retailers in more than three
years. April and the Easter holiday brought some enthusiasm back, which continued
Change from in the following months, and has been further boosted to some extent also by
H1 H2 summer sales. The general retail index measuring retail sales, but excluding car
08 08 sales, dropped by 8.3% in the first 5 months as compared with the same period of
Prime Rent  
2008, according to the National Institute for Statistics.
Transactions  
In recent years, rental levels evolved chaotically and reached higher margins than
those registered elsewhere in the CEE region. Currently, because of the financial
crisis and drop in sales and footfall figures, the majority of national and international
retail chains are negotiating their rental conditions, in order to reach sustainable
Hot Topics levels for all types of retail sectors.

The current market conditions have also highlighted the gap between prime and
• There is an increasing
secondary locations. In most cities, like in Bucharest, projects which have been
performance gap
opened for more than two years register constant footfall and sales figures, while on
between prime and
the other hand, newer projects that did not have the time to establish themselves on
secondary locations
the market have performed less well. While for prime locations rental levels have
dropped by 5 to 15%, in secondary locations, rents have fallen by up to 30 – 40%.
• 50 - 60% of the total
shopping centers outside As with Bucharest, quoting yields is extremly difficult at this time, because of the
Bucharest for which lack of transactions, difficult market conditions and the low number of investors
plans were announced showing interest in retail properties in Romania currently. We can predict that
on the market in 2007 yields for shopping centers situated outside Bucharest are likely somewhere
and 2008 will actually be between 1.5%-2% p.p higher than those for Bucharest.
opened

Retail Stock*

2000000
1800000 Retail Stock
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
2003 2004 2005 2006 2007 2008 H1 2009

a
* For the Retail Stock calculation we have included all retail projects in Romania (including Bucharest)
with a net leaseble area of over 10.000 sq m.
Source: CB Richard Ellis Eurisko
©2009, CB Richard Ellis, Inc.
 Shopping Centers
MarketView Romania Retail

In recent months, the international financial crisis

has left its mark on retail business in Romania, as a Number of Retail Projects Openings 2008&2009
number of retailers and developers have delayed
their expansion plans and have adapted their 30
business plans and forecast turnover for 2009
according to the new market conditions. We predict No. of retail projects
that only 50 - 60% of the total shopping centers 25 openings
outside Bucharest that were announced on the
market in 2007 and 2008 will actually be opened. 20
The rest will either be re-designed, converted or will
not even be built.
15
In H1 2009, we registered the opening of just two
new projects: Era Shopping Park Oradea and
10
Galleria Suceava, both of which were projects
delayed from 2008. Over the next six months, we
forecast that a very few projects will be opened, 5
among those being Galleria Piatra Neamt and the
extension of Iulius Mall Timisoara.
0
For existing shopping centers, upcoming months will 2008 2009*
test the strength of businesses, as retailers will * 2009 includes the openings in H1 2009 and the
continue demanding lower rents and higher announced openings for H2 2009
incentives, which will mean lower NOI’s and higher
vacancy rates. This period of time will be
characterised by efficency and adapting the
shopping centers to the purchasing power of the Major Retail Operators in Romania
population within catchment area. What can make
the difference between survival and profit are strong Field of Activity Brand
marketing actions, professional property
management, rents adapted to the market situation
and varied commercial anchors. Hypermarkets Carrefour, Real, Cora, Auchan,
PIC
On-street retail premises have been significantly
affected by the financial downturn. Except for big Supermarkets Carrefour Express, Billa
cities with visible high-street areas like Brasov,
Sibiu, Timisoara, Constanta, all other cities have
seen increases in available prime premises while Discounts Plus Discount, Kaufland, Penny
rents are dropping. The biggest problem for on- Market, Minimax Discount
street has been postponed expansion plans of
DIY Praktiker, Bricostore, Hornbach,
pharmacies, banks and casinos, the major clients of
Dedeman, Ambient
prime retail premises.
Furniture Stores Mobexpert, Elvila, Staer, Mobila
Tenants Bontas

Local retailers have been seriously affected by the White&Brown Altex, Media Galaxy, Domo,
financial crisis and most of them have put a stop to Technomarket, Flanco
any expansion or development plans, as they cannot
secure any financing. They are even considering Value Fashion Takko, Deichmann, C&A, New
closing some of the under-performing units located Yorker
throughout the country. The crisis has affected white
& brown retailers like Altex, Flamingo, Ultra Pro Sports Hervis, Intersport, Adidas, Puma,
Computers (which has closed down its entire Nike
business), furniture stores (Mobexpert, Elvila) and
stationery retailers like Diverta. Services Centrofarm, DM, Lava&Cuce, Say,
Arsis, BRD, Alpha Bank
H1 2009

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©2008, CB Richard Ellis, Inc.
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There are very few active retailers on the market that are now looking for retail space in secondary cities in
Romania. The most active in recent months have been: discount food stores like Plus Discount, Profi, miniMax
Discount, Penny Market, and value fashion retailers like Takko and Deichmann.

As a consquence of the growing interest from retailers for Romania, the CBRE report entitled “How Global is the
Business of Retail” ranked Romania as the 7th position out of 67 countries analysed by new international retailer

MarketView Romania Retail

openings. In terms of overall international retailer presence, Romania is in 34th position out of 67 countries.

For more information regarding the MarketView, please contact:

Adrian Nicolescu
Manager Valuation & Advisory Department
CB Richard Ellis | Eurisko
Europe House,
51 – 53 Lascar Catargiu Blvd.,
Sector 1, Bucharest
t: +40 21 313 10 20
e: adrian.nicolescu@cbre.com

Luiza Moraru
Head of Retail Department
CB Richard Ellis | Eurisko
Europe House,
51 – 53 Lascar Catargiu Blvd.,
Sector 1, Bucharest
t: +40 21 313 10 20
e: luiza.moraru@cbre.com

Disclaimer 2009 CB Richard Ellis

Information herein has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and
make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any
projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the
market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written
permission of CB Richard Ellis.
© Copyright 2009 CB Richard Ellis
H1 2009

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©2009, CB Richard Ellis, Inc. a