Rents For Retail Spaces In Central Bucharest To Stagnate, Decrease In Semi-Central Areas

"Street retail is currently stagnating after rents increased an average 15% in the first part of 2008 compared to the same period in 2007. Rents stabilized in the second part of last year, as the international financial crisis started to affect Romania. The most expensive areas in Bucharest are in the center, on Magheru bvoulevard, followed by Calea Victoriei, where rents in 2008 stood at EUR120-150/square meter per month,” the real estate consultancy firm said in a press release Monday.

According to DTZ analysts, in the current economic context, when main street retail space consumers – banks, pharmacies and casinos – are revising their development strategies and some even discard it, the demand for such spaces will stagnate and even decrease in the case of locations with less pedestrian traffic.

"For the first half of 2009, we expect rent levels for interesting street space to stay constant, while for semi-central areas, with lower pedestrian traffic, we see an increase in the degree of availability and an implicit decrease in rent prices,” the firm said.

According to DTZ, retailers started leaving street spaces in neighborhoods over the past year and moved into shopping malls.

"Malls are an attractive alternative for many chain stores that expanded in street spaces in the past, because they offer wider spaces, flexibility, increased traffic and integrated marketing," DTZ said.