Cold Shoulder by Mall Investors

The global recession has had its effects across the mall industry from delayed projects to frozen funds on numerous projects for retail centers. In addition to this, we have many tenants to who are demanding lower rents.

Newly finished shopping malls such as the Mall of Plovdiv or Bourgras Plaza in Bulgari are now enjoying rather high occupancy levels, Stroitelstvo Gradut has reported. Their success is attributed to the fact that they had the advantage of being the first malls in their respective cities. They are even waiting on the arrival of four or five more retail centers in the pipeline.

The upcoming months will prove whether Bulgarian shoppers can keep themselves occupied enough and how many of these new retail centers and malls can accommodate the Bulgarian market. The burden rests on the shoulders of investors and the purchasing power of the average Bulgarian. Most Bulgarian retails are small in size with little or no experience in financing unlike their western counterparts. Statistics show that the average Bulgarian household spent little on clothing and shoes in the month of February and sales in this sector decreased by nearly 9.5%.

Some of Bulgarian malls are experiencing rents that reach as high as 50% of the turnover, whereas most businesses see 12-15% as a more than proper figure. Only time will tell just how well Bulgaria fares in the mall and retail sector as analysts continue to monitor Bulgarian spending patterns in the coming months in the wake of the global recession.