Rental Level in the CEE Retail Sector is Stabilising

Between 2008 and 2009 the rental prices in the CEE retail sector have dropped considerably in Greece, Romania and Bulgaria. However the past months have brought a stabilisation of prices, only in Russia a slight positive price correction is to be expected.

The CEE retailing sector was one of the areas which had to suffer considerably during the crisis in 2008/2009. The economical crisis induced a consumption restraint and higher unemployment rates in many CEE countries. Thus also the retail turnover decreased and lead to a breakup of retail rental prices. Considering the high price level before the crisis, this meant a welcome price correction especially from the retailers point of view.

The price breakup was most dramatically in those markets – both Western and Eastern European countries – which had a strong investment and construction boom before the crisis. Thus the rental prices in shopping malls diminished in Greece by more than 20%, in Romania by about 19% and in Bulgaria by around 18%. In some Western European countries the decline was also considerably, for example in Ireland with a drop of around 13% and in Portugal with around 12%.

Regarding shopping centres the highest rental level today can be found in Russia with around 125 Euro per sqm per month and the lowest levels in Romania and Bulgaria with around 50 Euro per sqm per month. Excepting Russia, where a slight recovery of the prices is still to be expected the prices in all other Eastern European countries will remain stable so far.