Retail market stands at crossroads

Sorina Negrila, 16 Sep 2009

Romanian version

The local retail market is facing a new reality: the vacancy rate in shopping centers ranges between 5% -60% while nearly 40 high street retail spaces are vacant, according to a research report of The Advisers research company affiliated to UK-based Knight Frank.

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Landlords should forget about the ten-year lease agreement

“At this point, landlords should think no more of ten-year leasing contracts and to consider financial offers based on percent or fixed-rent mixes. So far, this strategy has been rarely used by landlords and more often by anchor tenants”, the report shows.

The major change both landlords and tenants need to make is the change of approach. The sooner retail market players realize things are no longer as they used to be, the faster solutions will emerge.

“The factors underlying the differentiation of a retail space are the interior design, or the number of events aimed at promoting the center and at increasing number of visitors. Retail spaces should tell a story, should lure you to spend more time in there”, The Advisers’ consultant added.

The retail department of The Advisers is headed by Monica Barbu, the former director of Colliers International’s retail business.

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