Bucharest’s prime retail streets saw 40% drop in rental levels

“The rents in prime streets and shopping centers remain stable in most cities across the country. In view of an aggressive competition for occupiers, incentives to retailers, such as rent free period or fit-out contribution are on the rise”, Cushman & Wakefield said in the report.

In Cluj-Napoca, high-street rents fell 46.7% in the past year, to €40/sqm/month, the lowest in four years.

Brasov’s most expensive shopping streets have seen their rental levels falling 36.4% to €35.4/sqm/month, while in Timisoara and Constanta, high-street rents stood 22.2% and 27.3% respectively below year-ago levels. An owner of a high-street shopping space in Timisoara will receive a monthly rent of €35/sqm and one in Constanta will receive €40/sqm per month.

Industrial space rents fell in the last quarter of 2009 by 3.1% year-on-year to €7.75/sqm/month.

Fashion anchor tenants in shopping centers and retail parks continue to lease spaces solely based on turnover, according to Cushman & Wakefield report.

“The 300,000 sqm of space delivered in 2009 account for less than half of total stock delivered in 2008 and equivalent to 2006 stock. In certain areas, the market may witness an oversupply in total retail space in shopping centers”, Cushman & Wakefield said.

Cushman & Wakefield Romania is one of the largest property advisers in the country, with a turnover of €5.4 million in 2008. The company said it leased retail space in AFI Palace Cotroceni for around 163 stores.