Retail Market_tipar.qxp
Transcription
Retail Market_tipar.qxp
CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET In one year time many things have changed inside the retail market in Romania. We can name the following: the successful opening of some new shopping centers (for example: Baneasa Shopping City, Era Shopping Park Ia[i, City Park Constan]a), the presence of new retailers on the Romanian market (most Inditex brands, Next, Peek&Cloppenburg, Luiza Moraru New Yorker, Douglas Perfumery, Head of Retail Department Reserved, Humanic), the announcement of new and very interesting projects (Allegria Mall Pite[ti, Festival Mall Sibiu, Roua Shopping Park Bra[ov). In the same time some have raised questions of whether the Romanian retail market can resist such rapid change in such a short period. In this context several announced projects still do not have a definite opening date (Esplanada, Colosseum) while other projects will never get passed the stage of "paper projects" (Mall of Romania in Sema Park is one of the most resonant and recent example). We predict that only 50 - 60% of the total shopping centers presented until today will actually be opened. The rest will either be re-designed, transformed or they will not even be built. In all cities, with the exception of Bucharest, there will be only one dominant retail center which will have the following characteristics: more than 30,000 sqm for a city with 100,000 to 200,000 inhabitants and over 40,000 sqm for a city with over 200,000 inhabitants. The prevailling project will also benefit from: the best location (in the center of the town), a large array of anchors, the most attractive and innovative design, the best merchandise and tenant mix, adapted to the local demands and an excellent property management team. Whitin this brochure CBRE Eurisko research team has put the focus on retailers and their expansion plans in Romania. Even though a number of retailers have expressed their concern regarding this agressive expansion because it may not be sustainable on the medium term, others are willing to open more and more stores. An evidence to the succes of international brands in Romania is the record selling opening figure registered by Next store in B\neasa Shopping City - the best opening within the worldwide network in the last three years. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Romania is located in the South-Eastern part of Central Europe and is bordered by Moldova and the Ukraine to the North-East, Bulgaria to the South, Serbia to the South-West, Hungary to the West, and the Black Sea to the South-East. Romania's total surface is of 237,500 sqkm. As a consequence of its location and history Romania is a mix of cultures, diverse ethnics and varied geography. Romania's total population is of 21.53 million (as of 1st of July 2007). The population has decreased in the last years with aprox 0,2% every year. In the period 2002 - 2007 the population dropped by 268,000 persons, while in the period 1992 - 2002 the total population decreased by 1,1 million persons. Probable causes for this are: intense foreign migration, a drop in birth rate and a rise of mortality rate. Because of the fact that the number of deaths out-weighs live births and the migration continues to increase, the population of Romania will probably continue to decline to an estimated under 20 million in 2020. The prediction for 2050 shows that Romania will have around 17 million people, or just 80% of the total population in 2006 (according to Eurostat). Out of these, the majority, 55.2% live in urban areas (municipalities and towns) while 44.8 live in rural areas. Population density in Romania is 90.8 people per sq km, is below the average for Central and Eastern Europe (106 people per sq km). There are 41 counties in Romania, of which 9 have a population density figure over 100. Bucharest is, by far, the most densely populated municipality in Romania, with 8,114 people per sq km. From the total population of Romania, women account for 51.3%, while there are only 48.8% men. In Bucharest, the rate is even higher in women's advantage, with only 46.6% men and 53.4% women. Romania is one of the most populated countries in the area, ranked three behind Turkey and Poland, as shown after. The last demographic census shows that the age profile has become older over the last 10 years, with the 0 - 14 and 15 - 24 categories decreasing and the 65+ category registering a significant increase. Figure 2 shows the age structure of Romania's population in 2006. Source: Eurostat 2007 The Romanian National Institute of Statistics estimates that the proportion of those in the active population (15 - 64) age group are going to remain constant within the following years, varying from 66% in 1990 going to 69.7% in 2007, and start a notable decrease trend after the year 2010. Source: INSSE, 2007 In 2007, there were only 4 cities in Romania with more than 300,000 people, excluding Bucharest: Source: INSSE, 2007 CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET 2008 is an electoral year in Romania, with both local and parliamentary elections to be held and for the first time an uninominal voting system will be used. In June 2008 the local elections were held with the following results: Social Democratic Party (PSD) won the most mandates (35.79%), while Democrat Liberal Party (PDL) won 28.56% of the mandates and National Liberal Party (PNL) won 22.20 of the mandates. In Bucharest the new mayor is Sorin Oprescu, an independent candidate, a former vice-president of PSD. Several major cities have re-elected the previous mayor: Constan]a with Radu Mazare, Bra[ov with George Scripcaru, Cluj Napoca with Emil Boc, Sibiu with Klaus Johannis, Timi[oara with Gheorghe Ciuhandu. The parliamentary elections will be held on 30th November 2008 and the most important candidates for the position of prim-minister are: Calin Popescu Tariceanu from PNL, Theodor Stolojan from PDL and most probably Mircea Geoana from PSD. Romania was an associate member of the European Union from 1995, began formal EU accession negotiations in 2000 and became an EU member starting with the 1st of January 2007. Romania is also a NATO member since 2004, after negotiations were started in November 2002. In 2008 the NATO Summit, the organizations most important annual meeting, was held in Bucharest, Romania. The first semester of 2008 was a record breaking period in terms of economic growth - the GDP rose by 8,8% in comparison with the same period of 2007 reaching a figure of RON 195.7 billion. This is the biggest economic growth for the first 6 months of an year since 1989. Even though the first decade after the revolution was a period of consistent decline in economic activity (signifying, among others, one of the highest rates of inflation and the lowest income levels in the region). However, during the last period things started to improve in all sectors, year by year as shown in the table below. Source: INSSE, National Bank of Romania Note: * National Prognosis Committee and Romanian Agency for Foreign Investments estimates While the government focuses on economic reforms according to the requirements of the EU standards, the economy has registered a constant growth (furthermore, current growth rates in GDP and consumption outperforming many of the major Western European countries). Although consumption and GDP per head are lower than the regional average, and considerably lower than EU levels, the consumer sector is expected to continue evolving, especially given the projected fall in unemployment. Considering the above presented economic figures, we believe that the major developers as well as the international retailer chains will find the Romanian market increasingly attractive as the average net monthly wage is expected to increase, as shown in the chart on page 11. The GDP per capita in Romania registered a 22% increase from EUR 4,500 in 2006 to EUR 5,500 in 2007, while the European average is of EUR 24,700 according to the Eurostat. For 2008, the European Union Statistics Institute estimates that the GDP per capita in Romania will reach EUR 5,900, a 7.2% increase compared to the previous year. In 2007 Romania was the 17th economy of the 27 countries within the European Union with a total of EUR 118 billion in terms of GDP and the Eurostat estimates that in 2008 Romania will keep the same position despite a slight increase reaching EUR 127 billion. For comparison the Czech Republic will have EUR 141 billion while Hungary will register a total GDP of EUR 108 billion. According to the National Prognosis Committee the GDP per capita in Bucharest was of EUR 11,290.5 in 2007 and is expected to grow to EUR 13,086.1 in 2008, reaching EUR 16,529.7 in 2010. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The country's inflation rate and the economic growth have improved during the last decade compared to the early 90's, showing that the economic recovery is a fact, although the EU standards are to be reached in the near future. The negative records for the annual inflation rate registered in 1997 (151.4%), 1999 (54.8%) or in 2000 (40.7%) are history now. In 2007 the inflation rate was of 4.84%, according to NIS, and the prevision for 2008 is of 7%. The consumer price index rose in 2007 with 6.57% compared with 2006, while for this year the prediction is of 5.4%. At a EU level the inflation rate was of 3.2% in 2007. The volume of direct foreign investments in Romania in 2007 was of EUR 7.2 billion, compared with EUR 9.05 billion in 2006. During the first semester of 2008 the FDI reached a sum of EUR 4,75 billion which means that for the entire year 2008 FDI will reach a volume of EUR 10 billion. In Romania is ranked second, after Poland as the destination for foreign investors out of the 10 new EU member countries. The figure is a consequence of the large greenfield investments in Romania, an area where we are leaders in the region. In the North-Eastern part of Romania the main industries are: steel and naval industries in Galati and Braila (ex: Mittal Steel); textile industry (Brainconf, Ia[itex, Textila SA, Akrom Akal); wine production (Cotnari, Vie Vin Export); wood and furniture industry (Moldomobila, Ecopack, Letea SA); construction industry (Arabesque, Dedeman, SSAB, Conex); food industry (Agricola, Pambac, Pakmaya). The main industries in the Southern region are: automobile industry with investments made by Daewoo, Ford, Renault and Auto Chassis International in Craiova and Pite[ti. The most well known investors for this industrial branch are Renault and Ford. Renault, the french automobile manufacturer is predicted to make an investment of over EUR 2 billion in the production complex in Pite[ti, Arges county by 2008. Ford has bought the former Daewoo plant and it is predicted that by the end of the year Ford will start the investments, evaluated at EUR 672 million; the number of new jobs offered by Ford will exceed than 5000. The food and beverages industry represented by Topway, Brewery Craiova, Caroli, Coca Cola, Vel Pitar and Boromir in Craiova, Ploie[ti and Ramnicu Valcea; chemical industry Transylvania is renowned for the following industrial branches: automobile industry (Roman SA, Autoliv, Ina Schaffler, Lisa Draexlmaier); food industry (Kraft Foods, Wrigley, Kandia Excelent); textile industry (Steilmann, Mondex, Rosko Textil); food and beverages industry (Friesland, Diamant, Coca Cola, Loulis, Interbrew); IT&Communications (Nokia, Route 66, UPC); white goods industry (Electrolux). Unemployment rate in June 2008 was of 3.8%. Unemployment has been declining steadily across Romania over the past 5 years, mainly in Bucharest (according to NIS). National Prognosis Committee announced that for the year 2008 the entire year the unemployment will be around 4.1%. Source: National Prognosis Committee, 2007 In June 2008 the national net medium income per month was RON 1273 (approx. EUR 350), according to the National Institute of Statistics. The net medium income in June 2008 was 4,312 times higher than the net medium income in Jan. 1990. It is widely believed that monthly income in Romania and also in Bucharest are higher that the official figures as people supplement their income with black market activities or just do not declare their full earnings. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET represented by Unilever in Ploie[ti; oil industry with companies like Petrom and Rompetrol in Constan]a and Ploie[ti. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The black market economy in Romania accounts for 25% to 30% of GDP (National Bank of Romania, Institute for Life Quality Research). Generally black market activities can range from illegal street trading to employers not declaring employees actual earnings. However the retailing sector benefits from this as people have more to spend on consumer goods and services. The number of foreigners entering Romania grew by 25.8% in the first seven months of 2008, compared with 2007, reaching a figure of 4.9 million people (Source: National Institute of Statistics). The majority of foreigners came from European Union, out of which 34.6% were Hungarians, 20.8% were Bulgarians, 9,2% were germans, while Italians represented 7,6%. The number of Romanian tourists visiting foreign countries grew by 25% compared with 2007, reaching a number of over 700,000 people. Even though the number of foreign tourists grew at a national level, the number of foreigners who visited the Romanian seaside dropped by 20% in 2008 compared with the same period of 2007. Last year was the best year for summer tourism since 1989. More than 900,000 Romanians chose to spend their holiday in other regions of Romania, like Prahova valley, Bra[ov and Poiana Bra[ov, North region of Moldavia. Due to increasing investment in the tourist and business traveller sector the touristic infrastructure is continuously growing, even if at a slow pace. The number of 3.4 and 5 star hotels is rising (mostly in Bucharest), with franchises like Ibis, NH Hoteles, Golden Tulip, Best Western, Howard Johnson, Radisson SAS, Novotel, K+K etc and local hotels like Carol Park Hotel. The registered level of car ownership in Romania is of 1 car for 6 inhabitants (by the end of 2006) one the lowest level in Europe. The European Union average is of 1 car for 2 inhabitants. In 2007, Romania, for the second year, was the biggest market for sold cars in East and Central Europe. The total number of new passenger cars sold was 315,621. However in Bucharest there are estimated to be 1,000,000 cars in the city (including non resident drivers), giving a figure of approx. 1 car for 2 persons. Source: Eurostat, 2006 Since 1990, the process of privatisation encouraged a vast number of small and medium-sized retail operations, with the majority being single outlets. Small entrepreneurs focused mostly on trade rather than production, and the distinction between retail and wholesale was blurred. The firms had limited access to business financing and most made only slight attempts to modernise their equipment. This structure resulted in a great number of outlets, most of them only simple kiosks or street traders, which did not have the power or market knowlege to survive. The number of outlets registered in 1996 and 1997 represented in fact artificial amounts of retail businesses. Since 2000 there has been a major battle between the major retailers that penetrated the Romanian market, mostly in the mid-1990s and which have had seen positive growth ever since, and the small retail businesses, the so-called "boutiques" (small outlets: general stores, kiosks). This struggle for supremacy tends to be won by the big retailers which only in 2001 increased their sales by 75% compared to 2000, and this has become a general trend in all of Eastern Europe. The local retail market has become a battlefield for approx. 300 modern retail premises all belonging to national and international retail chains, almost 20% these being operational in Bucharest, according to MEMRB. To date in Romania there are 38 hypermarkets, 123 supermarkets, 195 discount stores and 40 cash&carry units (according to MEMRB). The sales per sqmeter for the top international retail brand in 2007 (according to Business Standard): CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The luxury car market is growing exponentially in Bucharest, a city where are registered over 50% of the new sold cars in Romania. The high car ownership figure in Bucharest is an indication of wealth, with those having one in their possession having a higher disposable income. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET ! " The total value of the FMCG Romanian market in 2007 was of EUR 41 billion, estimated to reach EUR 43 billion in 2008 and EUR 48 billion in 2009 (according to MEMRB). Another company (Deloitte Romania) suggests that the total value of the retail market in Romania will reach EUR 100 billion by 2010. A study made by Planet Retail shows that in 2013 the tradition retail units will have a market share of just 59%, followed by hypermarkets with 21.5%, cash&carry units with 8.6%, discount shops with 4.7% and supermarkets with 5.2%. The market share of modern retail units out of the total retail market is of 40% at a national level and 70% in Bucharest. By comparison in Germany and France modern retail accounts for over 95.5%, while in Poland and Italy it represents around 55 - 60% (according to MEMRB). In Bucharest, for example, hypermarkets attract the main shopping budgets for 2 out of 3 shoppers, while in smaller towns the supermarkets, discount shops and local grocery shops are preferred by consumers. Compared with other countries in the region, Romanians spend the most money on fresh food products, around half of the monthly expenditure. Also, another Romanian characteristic is that shoppers are not yet loyal to a certain shop, they visit around three different brands each month, paying attention to marketing activities, interior design, accesibility and, of course, prices. Four out of five shoppers express the pleasure of going shopping (source: MEMRB). The food market is evaluated at EUR 18.3 billion, a 27.8% increase compared to 2006. The figures for Bucharest (where the modern retail prevails as compared to the traditional form of retailing) are much higher than in any other city in Romania. The supermarket segment in Romania is dominated by Billa, part of REWE group, with 30 units, followed by Carrefour Express with 21 units. Billa is a very aggressive player on the market, its goal being the opening of over 170 units in Romania by 2010. It is a network opened to acquisition (so far it bought only 2 units in Baia Mare) and it is very flexible regarding the size of a unit (ranging from 700 bought in 2007 the Artima network (a transaction evaluated at EUR 55 million) and has re-branded 17 out of the 21 units under the new logo Carrefour Express, at a cost of EUR 6.3 million. It plans to rebrand the remaining shops until the end of this year and to open other 10 units in 2009. An average Carrefour Express unit has around 1,000 sqm sales area. , part of Delhaize Group has become the most important player in Bucharest, after buying the La Fourmi chain, reaching 34 units in Bucharest alone and 3 units outside Bucharest (two in Constan]a and one in Ploie[ti). Mega Image paid EUR 18.6 million for the 14 La Fourmi supermarkets and will further invest in the re-branding and re-marketing process. It plans to open another 5 units in 2008. An average La Fourmi unit had around 400 sqm sales area. is another important player, mostly in Bucharest (22 units) and in Transylvania region. It started out as a small shop where only the Angst meat products were sold, but in time it evolved into a regular supermarket. The average size of an Angst unit is around 300 sqm - 500 sqm. Source: CBRE Eurisko according to press releases Taking into consideration the sales figures the leader on the market is Carrefour, who announced a sales figure of over EUR 866 million in 2007 and plans to reach a figure of EUR 1 billion in 2008 (durhas reported a sales ing the first six months of 2008 figure of EUR 427.1 million, a growth by over 40% compared to the same period of last year. Carrefour operates 16 hypermarkets in Romania, with 5 located only in Bucharest. Carrefour has announced that it plans to operate around 40 hypermarkets in Romania by 2012. For example one of their units: Carrefour CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET to 1,500 sqm sales area, but with units having only 300 sqm). Billa will open units within shopping malls (the first one is located in City Mall Bucharest) and other locations planned are: Liberty Center Bucharest, Atrium Center Arad and Atrium Center Cluj Napoca. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Orhideea was the third best operating hypermarket inside the Carrefour network at world-wide level, surpassed only by two units from China. To date Carrefour Feeria is registering high figures in terms of number of clients, similar to the ones from Orhideea. The average sales area size of a Carrefour hypermarket ranges from 6,500 sqm to 8,000 sqm. , By number of operating hypermarkets the leader is part of Lidl&Schwarz Group with 32 units in Romania. It plans to open at least one unit in each county and to open another 7 units in Bucharest alone, the final goal is to have 50 units throughout Romania by 2010. In 2006 the turnover for Kaufland Romania was of EUR 232 million. An average Kaufland unit has around 6,000 sqm to 7,000 sqm sales area. According to a GFK study, Kaufland is the leader of the local retail market with a 3.9% market share. , part of Metro Group, is one of the most dynamic players on the market with 7 new opening planned for 2008. It has 16 units in Romania, out of which 2 are located in Bucharest. The average sales area of a Real hypermarket is between 6,500 sqm to 8,000 sqm. The turnover reported for 2007 was of EUR 367 million. The hypermarket located in Vitan area, Bucharest brought several new ideas to the Romanian market - the unit is opened 24/7 and it has a very complex wine section. , part of Louis Delhaize Group, has only 3 hypermarkets in Romania and plans to open another 2 in Romania. The average Cora hypermarket has a sales surface around 12,000 sqm to 15,000 sqm (similar to that of Auchan that has 4 operational units to date in Bucharest, Pite[ti, Cluj Napoca and Târgu-Mure[, plus a small unit in Timi[oara ). is the only 100% Romania chain of hypermarkets with 4 units in Romania and plans to open another 2 in 2008 within retail parks. The owners of PIC group, Penescu brothers, announced that the future strategy is to open only in retail parks units with a lager surface, around 9,000 sqm to 10,000 sqm. Source: CBRE Eurisko according to press releases CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The most important player is Plus Discount, part of Tengelmann Group, with 63 units in Romania so far and with an agressive expansion plan reaching 120 units by 2010. A usual Plus unit has a sales surface of 1,000 sqm and offers a variety of 1,500 products ranging from fresh food, frozen food as well as non-food products. Plus Discount SCS Romania registered a turnover of EUR 126.5 million in 2006. Tengelmann planned to sale the PLUS network in Romania (like it did in the Czech Republic were it sold the 146 Plus network to REWE), but in the end decided to keep decisional control of the chain (Carrefour was among the potential buyers). REWE group operates two types of Penny Market units in Romania - the normal Penny, with a sales surface of 750 sqm and Penny Market XXL with a larger surface, usually over 1,500 sqm (until 2007 the larger units were called XXL Mega Discount). In 2007 Penny Market registered a turnover of EUR 253.7 million, an increase by almost 40% compared to 2006. The most important opening in a shopping center is the opening of a Penny Market XXL within Unirea Shopping Center Bra[ov. Profi, part of Louis Delhaize Group, was the first discounter to enter the Romanian market in 2000. It now operates 50 stores, including the former Albinu]a stores in Romania and one in Bucharest. The averages store has a sale surface of around 500 sqm and it trades around 4,000 products. Profi plans to open another 8 stores in 2008 and to rebrand the 9 Albinutza supermarkets (a local chain bought in 2007 from Maxima LT for EUR 7,5 million). In 2007, Profi Rom Food, the company operating Profi network, had a sales figure of EUR 65.5 million, a rise by 47% compared with 2006. In the same time the company announced a financial loss of EUR 1.4 million. Source: CBRE Eurisko according to press releases operates 23 units throughout Romania to date and reported in 2007 a turnover of EUR 1.59 billion, by far the largest turnover registered by a retailer in Romania. The network is 85% owned by Metro cash&carry and the other 15% belong to Ion Tiriac. Metro is also the first international retailer to enter the Romanian market, back in 1996. has 17 units in Romania, mostly in the same counties where Metro is present. It registered a turnover of EUR 800 million in 2007 and plans to reach a EUR 1 billion in 2008. The average sales surface is 10,000 sqm and the store offers over 42,000 products. Source: CBRE Eurisko according to press releases All segments of the modern food retailling are expanding their store portfolio and are trying to secure new locations or to consolidate their existing shops in order to respond to customer demand. If the number of discount stores almost doubled in the last 12 months, hypermarkets renewed their expansion strategy and opened new stores in shopping centers or retail parks, while cash&carry networks chose to strenghten the current stores and not to open new ones. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The cash&carry units dominated the food segment in 2007 with a 13% market share. There are only 2 players on this market Metro, part of Metro Group and Selgros, part of REWE group. Most cash&carry units are located in Transylvania region. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The entire white & brown market and IT market was evaluated at EUR 1 billion in 2007. The potential of the white&brown market is of over EUR 3 billion, to be reached by 2012, a moment when the market will peg. The brown goods market registered an increase in market share and sales figure in 2007, a trend most likely to continue in 2008. The best sold items in this segment were LCD's and Plasma TV's, followed by gadgets and innovative products. The most important brands on this market are: Samsung, Philips, Panasonic, Sony and LG. The white goods market registered an increase of 18% in 2007 compared to 2006 reaching a value of over EUR 350 million. The most important brands on this particular market are: Arctic, Indesit, Zanussi and Whirlpool. is the leader on the white & brown goods market with a turnover of EUR 317 million in 2007. During the first 6 months of 2008 the sales figure was of EUR 170 million, a rise by 47% compared with the same period of last year. An Altex store can have a flexible sales areas ranging from 800 sqm to 2,000 sqm, while a Media Galaxy unit has over between 2,500 sqm to 5,000 sqm. The total retail surface is of 90,000 sqm, divided in 70 Altex stores and 17 Media Galaxy units. Altex has recently signed an agreement with BelRom to have an Altex store in every European Retail Park scheme. is the second player on the market according to the registered turnover in 2007 (EUR 193 million). It operates 121 Domo stores and 3 Technomarket stores in Romania. It plans to open another 30 Technomarket units in all major cities of Romania Domo sold in 2007 75% of the shares to Equest Investments Balkans for EUR 62.5 milion. A 3,400 sqm Technomarket unit was opened in 2008 in Vitantits Shopping Center. , part of Flamingo International has two types of stores: Flanco and Flanco World, a store with a surface from 1,000 sqm to 3,000 sqm. The announced turnover for 2007 was of EUR 171 million, while the estimated turnover for 2008 is of EUR 193 million. There are 71 Flanco stores and 15 Flanco World stores. Flanco will open stores in Sun Plaza, Grand Arena, Esplanada and Colloseum in Bucharest in the next years. The company plans to focus its expansion activity through Flanco World, which has , the fifth player on the market declared bankruptcy in May 2008 and has closed down all Teknosa and Cosmo stores. The causes are various: the problems Sabanci Group (the majority owner of Teknosa) has in Turkey, the country of origin, the problems with the other partner, Primex and the intense competition on the white&brown market in Romania. Source: CBRE Eurisko according to press releases CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET surfaces of over 1,000 sqm. Another brand owned by Flamingo Group is Flamingo, a store specialized in IT&C and electronics with surfaces of around 500 - 1,000 sqm. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The sports goods market is evaluated at EUR 160 million. In Romania there are just 2 international multibrand sports stores: Hervis and Intersport. Hervis has 3 units in Cluj Napoca (Iulius Mall), Sibiu (European Retail Park) and Târgu-Mure[ (European Retail Park) and will open its first unit in Bucharest in Liberty Center in November 2008. Intersport has 7 units: 3 in Bucharest, and one in Bra[ov, Constan]a, Pite[ti and Bac\u. Intersport, brought in Romania through a franchise by Genco company, has announced that in 2008 it plans to open other 6 locations (mostly within shopping centers), after the registered turnover for 2007 was 60% higher than that for 2006, reaching a figure of EUR 10 million. The best sold item in the Intersport units are the sports shoes by Adidas and Nike. Decatholon has announced that it plans to enter the Romanian market through its big-size sport store. The first unit is to be opened in Militari Shopping Center in early 2009. Adidas has 18 stores in Romania, most of them in Bucharest (7), while the rest are in cities like: Bra[ov, Constan]a, Râmnicu Valcea, Oradea, Cluj, Ia[i, Satu Mare, Sibiu and Timi[oara and it plans to open another 7 stores in 2008. Nike, a franchise owned by Elmec Romania has 23 stores in Romania, with 9 located in Bucharest. Puma was brought in Romania through a franchise owned by Mexxem company, but starting with the 1st of January 2008 Puma has entered directly the Romanian market and plans to open 5 new independent Puma stores by 2010. A Puma store will have a surface ranging from 150 sqm to 200 sqm and the openings are planned only in cities with a population of at least 150,000 inhabitants. Mexxem will transform all the Puma stores it owns into a new brand - Fr33Zone, offering a wide variety of products and sports brands. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET In Romania mono-brand stores have been very popular, the most well-known brands being Adidas, Nike and Puma (these 3 brands top the sales inside the Intersport network as well). CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The fashion retail market is developing at high pace as far as international presence is concerned due to the numerous number of shopping center projects in Bucharest as well as in most important cities from the province, combined with the economic growth and the increase of spending power registered only during the past years. This lateness in arrival resulted from the small purchase power and the lack of quality retail environment from the late 90's and mid 2000's. Many of the fashion retailers that have entered the local market in the past four years are mainly looking now to secure premises within shopping malls due to high degree of attraction and to significant footfall figures. Relevant such players are: Inditex Group (with all its brands Bershka, Oysho, Pull& Bear, Stradivarius, Zara Home, Massimo Dutti), Takko Fashion, Orsay, Debenham's, Esprit, Springfield, Humanic, Marks&Spencer, Stefanel, Benetton, Etam, Kenvelo, Terranova, Mango, Promod, Next, Reserved, Cropptown etc. As for the footwear market, Leonardo is a local brand present in almost every major shopping center in Romania (the group has also shops in Hungary and Bulgaria and is targeting Moldavia for the next future). Other important players in terms of number of stores are Benvenuti, Otter, Ecco, Bata Office Shoes, Pietra, Amely or Il Passo. During the last year three major international brands present in the CEE markets - Deichmann, Humanic and New Yorker have leased premises in Romania. The following international brands have announced expansion plans in Romania: C&A, Decathlon, Kiabi, Forever 18, GAP, Banana Republic, Charles Woegele, Sphera, Glou, Exis Sport Tchibo Brands. On the health&beauty segment an important tenant has entered the market in 2007: Douglas Perfumery, a German retailer with over 1,000 shops. Other long standing retailers on the Romanian market are: The Body Shop, Yves Rocher, Sephora. It is important to mention that some international retailers have chosen to open their first store in a city different than Bucharest, due to lack of retail space in the capital city and increasing opportunities and purchasing power registered in the province. Some of the most powerful examples are: Bershka, Oysho, Stradivarius (first stores in Polus Center Cluj Napoca), Douglas Perfumery and Peter Murray in Mures Mall, Târgu-Mure[, New Yorker in Polus Center Cluj Napoca, Jack Wolfskin in Promenada Mall Sibiu, Hervis in European Retail Park Sibiu. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Source: CBRE Eurisko 2008 CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The Romanian cinema market has not yet reached maturity, a fact noticeable by the limited number of modern screens and admissions. If in 2006 compared to 2005, the Romanian figures followed their yearly decreasing trend (1.8% lower in 2006 compared to 2005), 2007 was the first year since 1989 when the total admissions was higher than the previous year (by 5.4%). Source: The National Cinema Center - Yearbook Film Production, Distribution and Exhibition, Romania 2006 In 2007 the total ticket sales in Romania reached almost EUR 10 million for 72 cinemas with 43,057 seats. There are two major international chains that have announced important investments in Romania for 2008-2001: the Greek company Odeon (number two in Greece market) and the Dutch company Cinema City International (CCI). The first one has secured locations within Polus Center in Cluj Napoca. Other targeted cities are Pite[ti, Constan]a and Gala]i. The second operator has already signed contracts for more than ten projects throughout the country (out of which 4 projects in Bucharest) and is looking to increase its network in Romania. It has opened two cinemas in Ia[i and Timi[oara. So far the strongest player on the Romanian market is dominated by Hollywood Multiplex, with two cinemas, one in Bucure[ti Mall (10 screens) and one in Lotus Oradea (5 screens), plus a single-screen (CinemaPRO). According to the National Center of Cinematography, Hollywood Multiplex has 47% of the local market. Source: The National Cinema Center - Yearbook Film Production, Distribution and Exhibition, Romania 2007 CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET One of the main reasons for which the foreign international cinema operators are attracted by the Romanian market (besides the low number of screens for the entire population) is the fact that the ratio ticket sales per capita is of 0.14, while the one for the Czech Republic, Poland or Hungary is between 0.8 to 1.15, while the European Union average is of 2.5. Basically the strategy of these international operators is based on the huge potential of the local market. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET In Romania there are a limited number of fast-food networks that have opened stores all over the country. McDonald's, KFC, Pizza Hut are the oldest such chains on the market. Mc Donald's was the first restaurant chain to come to Romania in 1995, in Bucharest. Now their network covers 21 cities and includes some 55 units, out of which only three are franchises (the ones from Bra[ov), with a total turnover of EUR 93 million in 2007. Until the end of 2008 other 4 units will be opened, including one in Liberty Center in Bucharest. For the next 7 years, McDonald's plans to double the number of its restaurants with at least 8 new openings each year. The forecast in terms of turnover for 2008 is of EUR 100 million, a rise by 20% compared with 2007. Recently, McDonald's has announced that the most profitable restaurants are those in Bucharest, followed closely by the ones in Constan]a, Bra[ov and Timi[oara. The top 5 restaurants in Romania gather around 1 million transactions daily. KFC started their development in Romania in 1997, having 30 units in the country, out of which 11 in Bucharest, 3 in Constan]a and Ia[i, 2 in Cluj Napoca and one in Bra[ov, Oradea, Ploie[ti, Craiova, Târgu-Mure[ and Arad. It plans to open at least 2 stores by the end of 2008 and other 8 in 2009. In the first 6 months of 2008 the KFC network has registered a sales figure of EUR 18 million, a rise by 49% compared with the same period of 2007. The total number of KFC customers in Romania is of 10 million. Pizza Hut entered the market in 1994 and opened 11 units, out of which 4 are located in Bucharest. In 2002, the company signed an agreement with Metro Group and opened four restaurants in some of the cash & carry units. In the first semester of 2008 the registered turnover was of EUR 5 million, with 27% higher than in 2007. Burger King (a franchise owned by Atlantic Restaurant Systems) entered the Romanian market in 2008 with a unit located in Baneasa Shopping City and then opened another one in City Mall. It plans to open another unit in Liberty Center and another 6 by the end of 2009. During the past three years two Romanian restaurant chains have extended their networks especially in Bucharest within shopping centers or in street locations - La Mama has to date 7 restaurants and 3 coffee shop - Cafepedia (the company registered a turnover To date the biggest Romanian chain of coffee shops is Turabo Café that has 4 in Bucharest and 3 in the province (Bra[ov, Ia[i and Timi[oara), beside the franchises. Marinopoulos Coffee Company of Greece has brought the Starbucks franchise in Romania in 2007 with three locations to date, two of them located within Bucuresti Mall and Plaza Romania and one in Iulius Mall Cluj. Other important coffee chains are Coffee Republic, Gloria Jean's Coffee and Costa Coffee. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET of EUR 8 million in 2007). A new unit Cafepedia will be opened in Iulius Mall Cluj, the first location in a shopping mall. Second, City Grill has 7 restaurants in Bucharest (out of which one is Caru' cu bere) and one in Constan]a, alongside two coffee shops (City Café) both located in Bucharest at the ground of class A office buildings. In 2008 City Grill acquired CremCaffe that operates 2 units located in central locations in Bucharest. (Trotter Prim the company that owns these brands recorded a turnover of EUR 11 million in 2007) . CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET In the first 10 months of 2008 the available retail space in Romania increased by 50% as compared with the existing stock available at the end of 2007 - from 43.20 sqm GLA / 1,000 persons to 62.70 sqm GLA / 1,000 persons. Source: CBRE Eurisko * forecast stock by the end of 2008 The calculation includes all modern retail units in Romania with over 10,000 sqm GLA (shopping malls, retail parks and hypermarket-led schemes). Some other 10 very well located, totally or partially refurbished department stores (previously state owned) are operational throughout the country. They are not included in the calculation because of the fact that, with the notable exception of Tomis Mall, they do not comply with the Western standards of a shopping center. The other centers planned to be opened by the end of this year are: Aurora Shopping Mall `n Buz\u, West Park including the Fashion Outlet Center in Bucharest, Grand Arena in Bucharest, Galleria Piatra Neam] and Suceava and Iulius Mall Suceava. Even considering the international financial crisis, international developers and major retail chains are looking to Romania, mainly due to the economic growth, increased spending power and huge potential of an over 21 million customers market. While significant competition is announced everywhere in the country and between all types of retail developments (shopping centers, retail parks, hypermarket led market schemes) the demand from retailers and consumers remains high. We believe that around 40% of the total shopping centers announced will either be dropped or developed with a different use. European Accessibility. Bucharest is located at the intersection of some main European roads and railways: n n Bucharest is one of the cities on the Pan-European railway route no. IX that links 5 countries and has the main stops in Helsinki (Finland) - Moscow (Russia) - Chisinau (Moldavia) - Bucharest (Romania) - Plodviv (Bulgaria); n The Pan-European railway route no. IV links Berlin/Nuernberg Prague - Budapest - Bucharest - Constan]a - Salonic - Istanbul; n There are three major projects that are to be completed in the following years (although the construction works have just recently started only for Transylvania motorway), meaning: The Pan-European corridor no. IV: Nadlac - Arad - Timi[oara Deva - Sibiu - Pite[ti - Bucharest - Constan]a; n Transylvania motorway: Bucharest - Bra[ov -Târgu-Mure[ - Cluj Napoca - Oradea - Bor[; n n There is also one project that will link Ia[i to Târgu-Mure[. Actually it will start from Sculeni (border check point with Republic of Moldavia) and will join Transylvania motorway in Târgu-Mure[, covering 315 km. Regional Accessibility. Bucharest has 5 main entrances, that link the capital with all the regions of the country: n In the North - on E60 (DN1), from Bra[ov and Ploie[ti n In the West - on A1 from Pite[ti n In the South - on E70/E85 from Giurgiu and the Bulgarian border n In the North - East - on E85 (DN2) from Moldavia region n In the South - East - on A2 from Constan]a E60/DN1 is the most important national road in Romania in terms of traffic and links Bucharest with the Central and Northern CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET regions of the country, through Ploie[ti - Bra[ov - Sibiu - Cluj Napoca - Oradea and reaches Bors (check point at the border with Hungary). E85/DN2 is one of the main European roads that cross Romania, which links Bucharest to Ukraine and further up to Russia. It is the main North - South commercial road of the country, crossing the entire region of Modavia. It is also used as a commercial route for countries like Turkey, Bulgaria, Ukraine, Poland or even Russia. The total population of Bucharest as of 1st of January 2008 was of 1,943,981 inhabitants. As seen in the table below (which compares the population of selected capital cities in Central and Eastern Europe), Bucharest's population, is significantly larger than several advanced retail markets in Central Europe. Source: Eurostat 2006, * INSSE 2008 The population in all six sectors of Bucharest (the being the administrative units) has decreased since the 1992 Census apart from Sector 5 where there has been a slight increase. Source: CBRE Eurisko CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Population density for Bucharest was of 8,117 inhabitants per sq km at the 1st of July 2007, but this varies significantly by sector, meaning: 3,266 inhabitants/sq km in 1st District, 11,222 inhabitants/sqkm in 2nd District, 11,612 inhabitants/sqkm in 3rd District, 8,858 inhabitants/sqkm in 4th District, 9,583 inhabitants/sqkm in 5th District and 9,490 inhabitants/sqkm in 6th District. Although compared to July 2006 the total population of the capital registered a slight increase (with approx. 600 persons), the density per sq km in July 2007 was lower in the following sectors: the 1st, the 2nd, the 3rd and the 6th, while a slight increase was recorded in the 4th and the 5th Districts. Source: Bucharest Regional Statistics Office, 2007 The population in Bucharest grew significantly between the post war years and 1992, primarily due to the migration from rural to urban areas. In the period 1948 - 2007 the population of Bucharest almost doubled from 1.03 million to 1.93 million people. The number of people living in Bucharest is expected to grow in the coming years, despite the general decreasing trend registered over the past 10 years across the country. This increase in population could be due to a number of factors that include: the city gathers almost half of the foreign investments in Romania, the real estate sector - retail, residential, industrial and offices is booming, the average net salary is the highest thus attracts skilled labour force from across the country, not taking into account the foreigners that are employed by the multinational corporations with branches in Bucharest. Source: Bucharest Regional Statistics Office, 2007 At the 1st of July 2007 some 40% of the Bucharest population was aged between 25-49 years. This is the age group that will be spending the most on consumer goods and entertainment. The 50-64 years category is the second with 20% of the total population, followed by the 15-24 years and over 65 years categories with 14% each. The youngest age group (0-14 years) registered the smallest ratio - 12%. Source: Bucharest Regional Statistics Office, 2007 CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET In Bucharest the total occupied population was of 936,800 persons. Approximately two thirds of the workforce is employed in the services sector (64%). This proportion is expected to slightly increase as the services sector develops particularly the retail and the banking domains. On the other hand, the industry and construction sector represents 30% of the total number of employees in Bucharest. During the last years the construction sector has registered a huge demand in terms of workforce due to the significant investments. However this particular demand is hard to satisfy because of the increase numerous number of qualified workforce that are currently employed abroad in countries like Italy Spain, Gemany or Israel. The agriculture and other services account for 6% of the total. Source: Bucharest Regional Statistics Office, 2007 Source: Bucharest Regional Statistics Office, 2007 The monthly net medium income in July 2008 in Bucharest was of RON 1.769 (approx. EUR 495) as compared to the national average of RON 1239 (approx. EUR 347). It is widely believed that wages in Romania and also in Bucharest are higher than the official figures as people supplement their incomes with black market activities or just do not declare their full earnings. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET According to the National Institute of Statistics and Economic Studies the unemployment rate in Bucharest (related to the total active population) was of 1.7% as of July 2008, which is a significantly lower level than the national average of 3.8%. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Out of the average net monthly income per capita from July 2008 only 75.4% represents the available expenditure, meaning approx. EUR 373 which includes of EUR 282/month on retail goods. If we include the black market estimates in these calculations, we believe that an increase by approximately 25-30% would be the correct assumption. The gradual decrease for the inflation and unemployment rates, alongside the increased spending power given by higher earning potential within Bucharest region over the next few years are goods signs for the retail market. Source: Bucharest Regional Statistics Office; Exchange Rate is set at 1Euro = 3,57 RON (October 2007) NB: These figures do not include Black Market Spending CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The retail market in Bucharest is booming in all sectors of activity: stand-alone units, high-street retail and shopping centers. For stand-alone units the most sought after locations are those on the exit roads to Ploie[ti, Pite[ti and Constan]a, with easy access and with parking available. All the major international players are present in Bucharest: Carrefour (one unit was opened within Vitantis Shopping Center in 2008), Cora, Auchan, Real (one unit was opened in 2008 in Berceni area), Metro, Selgros, Plus, Praktiker, Bricostore, Tekzen, Mr. Bricolage. Currently, the on-street retail market in Bucharest registers a high demand from banks, pharmacies, casinos and show-rooms (auto, mobile phones and interior decorations). There are still very few available on-street premises within downtown area. In the top of most sought for on-street rental areas, the following areas are still in the top: Roman\ Square, Victoriei Avenue, Universit\]ii Square, Doroban]i Avenue, Aviatorilor, Mo[ilor Avenue and the Old City Center. Top rents for prime High Street units are between EUR 1,440 and EUR 1,680 per sqm per annum while the rental levels for shopping malls are between EUR 500 - EUR 700 per sqm per annum and up to EUR 960 per sqm per annum for units less than 50 sqm. The shopping mall stock is Bucharest is extremely low compared to other capital cities of neighboring countries with similar population. Therefore, Budapest and Warsaw have over 20 modern malls each, but in Bucharest there are only 4 such developments. In 2007 and first part of 2008 the major development were: the opening of B\neasa Shopping City Mall, the biggest mall in Romania to date, the opening of the food-court in Unirea Shopping Center and the opening of the extension of Bucharest Mall and City Mall. During the last two years a significant number of shopping centers projects were announced to enter the market until the end of 2012. For this particular reason the rental level is not expected to decrease over the next years. Many of these projects are developed by foreign companies like TriGranit, GTC, Mivan, Africa Israel, Liebrecht & wooD, Plaza Centers, Sonae Sierra etc. and Continuing the trend registered in 2006 and 2007, during 2008 most of the high quality retail spaces in Bucharest (Bucure[ti Mall, Plaza Romania, Unirea Shopping Center and Carrefour and Cora hypermarkets) were taken up. Source: CBRE Eurisko Retail Department CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET foreign construction companies like Summa, Ozer, Hochtief etc. The existing stock of modern shopping centers in Bucharest is extremely low compared to other former communist countries like Hungary, Poland or Czech Republic. For example, Budapest and Warsaw (capital cities with almost the same population as Bucharest) have over 25 modern shopping centers each. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Even though there were some important openings in 2008, in Bucharest there is still a deficiency of retail space within shopping centers, with some smaller cities, like Cluj-Napoca, which have more retail space / inhabitant than in Bucharest. The openings planned for this year ( Liberty Center, Grand Arena, West Park) and for the next year (AFI Palace Bucharest, Sun Plaza, Militari Shopping Center) will offer new retail space and new brands. The deficiency of quality supply in Bucharest is strictly related to the difficulty of finding vast surfaces (located within or outside city limits) with a well-defined juridical statement and land owners willing to sell. To date the entire modern shopping center space in Bucharest is 100% pre-leased. As a result, in the near future the supply is expected to boost but still it will be immediately absorbed. Rental rates, though sufficiently high, are not expected to lower throughout 2008-2009 and during the following two years. is located in the North of the city, within Baneasa Project. The entire Baneasa project will be developed on a 22 ha plot of land, in several stages until 2015 and will contain offices (12 ha), residential (approx. 5,000 dwellings) and retail developments (on 17 ha). The total investment is of approximately EUR 1.2 billion and the investors estimate to obtain a yearly turnover of EUR 2 million. The commercial project include a retail gallery anchored by a Carrefour hypermarket - Feeria Shopping Center, a furniture shop (Mobexpert) and a DIY outlet (Bricostore) - all of them already operational. The first IKEA was opened in the area in spring 2007 and is registering very good revenues (EUR 87 million in the first year of operation). B\neasa Shopping City is the mall 'component' from B\neasa Project with around 55,000 sqm. This project has attracted new brands in Romania like: Peek&Cloppenburg (4,000 sqm), all the brands of Inditex Group, IKKS, Sacoor Brothers, Reserved, Next, Oasis, Orsay, Burger King, Nordsee, She She Restaurant, Humanic. The project will include by 2009 a 30,000 sqm entertainment center: Family Entertainment Center and Kids Entertainment Center. n n is the first shopping mall in Romania. n is the second major shopping mall in Bucharest developed by the Turkish Anchor Grup. The scheme has a total built area of 104,000 sqm (meaning some 43,000 sqm GLA) of floor space including a supermarket (G'Market), foodcourt (KFC, McDonald's, Ancuta, Broaster Chicken, Spring Time etc.), cinema (Movieplex) and fashion anchors (Pull & Bear, Springfield, Nara Camicie, Esprit, Guara, Promod etc.). Plaza Romania opened in late October 2004. The tenant mix is similar to that of Bucuresti Mall - a mixture of domestic and some international brands, mainly catering for mid and high market customers. Its main anchor is the first Zara store in Romania. Works have already started at the extension of the mall, which will add around 6,000 sqm GLA to the existing surface or more than 30 new shops. The extension is planned for opening in 2009. - was refurbished in 2000 and has a total built area of approx. 80,000 sqm, structured on 5 levels, the total leasable area being of approx. 46,000 sqm. Although the merchandise & tenant mix as well as the partitioning cannot be compared to the ones existing within a shopping mall its main advantage is represented by its location - Unirii Square. To date there are more than 200 retailers within Unirea Shopping Center, the figure being expected to grow. Some of the main tenants are McDonald's, INA Center, Avon, Sarra Blu, KFC, The Body Shop, HVB Bank, Germanos, Sensiblu, Altex, Diverta etc. Starting with the 1st of June 2007 at the fourth floor 'Little Paris' a 5,600 sqm food-court and entertainment center was opened. It includes a 800 sqm casino (Metropolis), a 2,800 sqm Funland Entertainment Center and a 2,000 food-court (City Bistro, Sushimania, Daylight n CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Together with the extension (operational from mid 2007) it has a total surface of over 70,000 sqm, structured on 4 levels and the total leasable area of approx. 36,000 sqm with more than 100 shops. Some of the tenants are: G' Market, Marks & Spencer, Sephora, Kenvelo, Nike, Media Galaxy, Diverta, Leonardo, Steilmann, KFC, Ruby Tuesday, Hollywood Multiplex, Bigotti, Adidas etc. The extension represented a EUR 14 million investment and added some 18,000 sqm of built area to the existing 52,000 sqm. The new structure has four levels (2 UG + GF + 1) out of which only the upper two have premises to let and are connected to the existing one by an atrium. Some of the big names from the extension are Debenham's, Koton or Starbucks. To date is the most popular shopping center with an announced traffic of 30,000 35,000 people during week days and over 43,000 in the weekend. (source: Anchor Group). CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Donuts, Pomodoro Caffe etc.). A re-leasing process was opened in 2008 including re-positioning / refurbishment of some tenants (McDonalds, Diverta, B&B Collection) and adding new brands like: Bata, Fornarina, Geox. n - opened in October 2005 on a former unfinished structure located on Oltenitei Blvd., has 24,500 sqm of gross leasable area structured on 4 levels, with tenants like Benvenuti, Camel Activ, Motor Jeans, Stone Creek, Folli Follie, Sony Center, Columbia, Diverta, Billa, Domo, Primavara, Hondos Center, Burger King. The n - this is a HKS Group investment with a gross built area of 14,000 sqm and 5,500 sqm GLA opened in 2004. It is located in a new residential area outside Bucharest city limits. Main anchors: Moda & Style (Gianfranco Ferre, Armani, Moschino, Dolce & Gabbana etc.) and Primavara. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET entertainment facilities are represented by bowling and billiard (Split billiard) and cinema (Cityplex). The officials at City Mall have started a re-branding process which will lead to attracting new tenants and to transforming some retail spaces into office space. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET n is a 28,000 sqm GEA scheme opened in 2001. It is anchored by a 21,000 sqm hypermarket adjoined by 32 retail units. Mobexpert, Domo and Bricostore retail warehouse units are located adjacent to the scheme. Carrefour Militari is located out-of-town and is only accessible by car or bus. The bus service takes up to 1 hour from the city center. However, it is still a destination for shoppers, who will travel from outside Bucharest to visit the scheme. n The scheme totals 30,000 sqm, anchored by an 8,400 sqm Carrefour hypermarket. It was opened on the 24th of September 2003. In addition to the hypermarket, there are 58 retail units. However, customers are likely to be drawn to Carrefour Orhideea for its large hypermarket rather than the shopping gallery (that includes Marks & Spencer, Famous Brands, Bam Boo, Nissa, Inmedio, BRD, Cellini, Animax etc.). This one of the most successful retail developments in Romania due to its location (close to the North railway station and to the biggest student campuses in Bucharest as well as 10 minutes from the city center). and its retail gallery of 3,250 sqm were opened in 2004. To date, this development has not proved successful mainly due to the bad access infrastructure and for the future the main attraction will remain the anchor hypermarket. n located in the Eastern part of Bucharest, was opened at the 1st of October 2003 and also a large shopping gallery in front of the cashiers. This development's catchment area is the entire Pantelimon neighbourhood. A Bricostore unit alongside and a Mobexpert unit are located near this hypermarket. n has an exceptional location (on the former Miorita milk factory site) in one of the most crowded district intersections in Bucharest. The hypermarket surface is of 14,000 sqm and includes a shopping gallery which will be extended with 3,000 sqm GLA by the and of 2008. n n is the main anchor of Feeria Sopping Center. The land on which it was developed is of 36,000 sqm, out of which the hypermarket occupies 15,600 sqm with a sales area of 8,400 sqm and the shopping gallery has 17,300 sqm. is part of Vitantis Shopping Center, which was opened in 2008. The hypermarket has a smaller sales surface than usual, 4,000 sqm. The other tenants in this project are Technomarket, Bontas Furniture, Reserved, Cropptown, Kenvelo, Reno Shoes. The first hypermarket in Romania was opened in the South-Eastern part of Bucharest (Titan area) on the 6th of November 2006. The hypermarket alone has a sales area of 15,800 sqm, with a shopping gallery of 13,700 sqm comprising of some 60 shops. In 2008 Iris Shopping Center was opened; the shopping mall has a GLA of 14,000, a project later sold by Avrig 35 to DEGI, part of Allianz Group. n CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET n CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET has approx. 3,500 sqm and it is located in the North of the city and it is part of the World Trade Complex including the Sofitel Hotel. It is located at approx. 20 minutes driving from the city center. The Gallery features elegant boutiques, art galleries, fashion and antique shops, such as: Valahia Art Gallery, Cleopatra lux, Etno Art, Ina center, Inmedio, La Galette, Meli Melo, More & More, Samsonite, Inoxcrom, Faber Castle, Stefanel, Poltrona Frau and Nobilis. n n is the oldest free-standing shopping gallery (approx. 2,000 sqm), opened in 1997, in Doroban]i Square. Over the years, the tenant mix has changed towards a select mixture in order to attract only the high income consumers. Important tenants are River Woods, Lush, Stefanel, Casa Mia, Sarra Blu, Wolford, Eleganzza, Daniel Hechter, Terzoatto, Zia Pia, Bigotti, Privilege etc. has approx. 5,000 sqm and it is the one newest shopping gallery. It is part of Grand Hotel - Marriott, located in the Central Southern part of the city center at approx. 20 minutes driving from downtown. In June 2008 the first Louis Vuitton store in Romania was opened here which marks the beginning of a re-branding process of the Shopping Gallery into a luxury, very exclusive and expensive shopping avenue. Other important retailers are: Korloff, Davidoff, Dupont, Bang & Olufsen, Galt, Daniel Hechter. n is a 3,000 sqm commercial gallery located within an class A office building, respectively America House (a 45,000 sqm office building in the Victoriei Square, delivered on the market at the beginning of 2006). The gallery consists of retail service providers (banks, tourism, health & beauty, restaurant), clothes and shoes retailers, gifts and deluxe home decorations shops. n within the hotel wite the same name opened in 2008 and consist of over 20 shops, moslty service oriented and some fashion and accesories shops. n CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The provision of luxury shopping galleries is quite low at the moment in Bucharest, the investor focus being of commercial developments. The luxury shopping centers are mostly located within reputed hotels, such as the Sofitel Hotel, Rin Grand Hotel and the Marriott Hotel. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET n is projected to be the shopping destination for the Southern areas of Bucharest, being located at the intersection of all Southern districts (at BIG Berceni). The project will have a built area of 196,000 sqm out of which the shopping center will have a 78,000 sqm GLA including a Cora hypermarket, a DIY unit (bauMax) and furniture (Mobexpert). The scheme will also comprise of some 170 shops. The entertainment facilities will include a City Cinema with 15 halls (some 3,000 seats). Some 2,000 parking lots will be available for the visitors. The EUR 150 million investment will be completed in 2009. is a mixed-use project based on a public - private partnership that will be located in the very heart of the city on 11.7 ha land in Unirii area. The developer - TriGranit Corporation - announced that the project will comprise of office buildings (75,000 sqm), a hotel of 20,000 sqm, some 30,000 sqm of residential development, approx. 40,000 sqm GLA of retail space, 30.000 sqm of leisure and sport premises, some 110,000 sqm of parking facilities and 30,000 sqm of office space for public administrative offices. In the recent months there have been rumors that the project will be delayed for a period of around 3 years due to several land expropriation problems. n n - developed by Mivan on a plot of land located at the intersection of Rahova Blvd. with Progresului Str., within Rahova area. The shopping mall will have 25,000 sqm GLA with a 3,500 sqm supermarket, 100 shops and a 6 halls multiplex cinema. The will project will be opened in November 2008. n - Africa-Israel will develop this project located on Vasile Milea Blvd. The project will comprise of four office buildings with a total area of 48,000 sqm, a 10,000 sqm hotel and a shopping mall of 75,000 sqm GLA with approx. 250 shops, a Real hypermarket as an anchor, the first IMAX cinema in Romania, fitness club and spa ready by the end of 2009. - will be located in the North-Western part of Bucharest and will be developed by Modus Properties. The project will have some 162,000 sqm of built area, including a retail park. The completion of the first phase that will include a 15,000 sqm Carrefour hypermarket and some 36,000 sqm of retail gallery is due for 2009. n n - part of the Floreasca City project that will - will be located on Petricani Str. and will be developed by GTC. The shopping mall will comprise of 60,000 sqm GLA with a hypermarket, retail gallery, food-court and multiplex. The completion date of the scheme is unknown to date. n n - the former communist retail structure located near Unirii Square will be refurbished and extended in order to become the main luxury store in Bucharest. The new structure will have around 10,000 sqm GLA, divided on 5 levels and according to the owners and to Retail Group (the leasing agency) will host important luxury brands, around 60% of them being new brands on the Romanian market. The new Cocor is scheduled for opening in Q4 2009. n - this is an unfinished structure located on Eroilor Blvd. with a total built area of approx. 550,000 sqm that will be raised in three different stages by Plaza Centers. The first phase will include some 39,500 sqm of office and residential developments that will be raised on the existing structure, a shopping mall with a gross built area of 132,000 sqm, a 40,000 sqm casino and a parking with 3,000 lots. Another office building with some 11,000 sqm built area will be raised in the back of the site for the state administrative authorities in conformity with a clause stipulated within the public-private partnership. The second phase will include two towers totalling some 106,000 sqm comprising of office, residential, retail and hotel facilities. The third phase will also include retail, office and residential facilities (some 36,000 sqm), plus some other 600 parking lots. - the developers of Baneasa project have won the auction for the Bucur Obor project that will be raised on 6 levels out of which the underground level and also the 2nd and the 3rd levels will be used for the parking facilities. The ground floor and the first floor will include retail premises totalling some 40,000 sqm GLA. A part of the 3rd level alongside the entire 4th level will be used as office premises. This project will be completed in 2009-2010 (best case scenario). n n - the existing project was developed by Liebrecht &wooD in 2003 and then sold to Atrium European Real Estate fund (formerly known as Meinl European CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET comprise of a shopping mall and one office building that will be raised on a former industrial site in the Northern part of the city. The shopping mall will have a built area of 50,000 sqm and the office building - Sky Tower will have some 33,000 sqm. The first phase is set for the end of 2009. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Land) in 2004 for EUR 20 million. The scheme has to date some 14,000 sqm. The entire project will stretch on a surface of 22 ha and when completed in April 2009 and will include shops and big box retail on approx. 60,000 sqm. - the Irish company Caelum Development and the Portuguese Group Sonae Sierra will develop a mixed-use project on the former site of the Spartac sports fields in Titan area. It will include a shopping mall as well as residential developments. The site on which the 110,000 sqm GLA shopping mall will be raised is of 8.2 ha. In recent months there have been some problems with the building permits as local authorities and NGO's have stated that the land on which ParkLake Plaza is to be built is actually a former park and sports complex and according to Romanian law no private building can be built. n n - the project will be located on the site of the former Electroaparataj factory in the Eastern part of the city, within Pantelimon area. The scheme will comprise of approx. 80,000 sqm GLA structured on three levels with more than 150 shops. The parking will include approx. 3,800 lots on three levels and the completion date is set for late 2010. n - the Belgian real estate developer Bel Rom that has several retail park projects throughout the country, will invest some EUR 100 million in order to develop a mixeduse project comprising of a retail park and two office buildings in North-Eastern part of Bucharest within Colentina district, on the site of the former Helitube plant. The owners stated that the scheme will also include a 22,000 sqm hypermarket. The completion date will be around 2009-2010 according to the developers. n - Liebrecht & wooD started in 2007 the construction works for a 90,000 sqm retail park the will be located at the 13th km of the A1 motorway. It will comprise a Fashion House Outlet Center with 28,000 sqm (including a food court), alongside a a 13,000 sqm Kika furniture unit (the first one in Romania), a 23,000 sqm Hornbach unit and a white & brown goods retailer Technosa (this is a Bulgarian retailer that has chosen this location for its second unit in Bucharest, after the one in Vitantis Retail Park). It will be delivered on the market in the second half of 2008. n - the Israeli company has recently bought the Laromet factory in the North-Westen part of Bucharest and will raise a mixed-use project on that particular plot of land, meaning 3,000 residential units and a 25,000 sqm shopping mall. The scheme will be completed at the end of 2010. n - Sparkassen Immobillien, the real estate division of Erste Bank has announced that it will develop a commercial project in Jilava, close to the Bucharest city limits. The Austrian fund bought a plot of land of 97,000 sqm on which a one level 45,000 sqm will be raised in the near future. The opening date for this EUR 40 million investment was not disclosed yet. - will be located in Berceni area (Southern Bucharest). The scheme will have some 50,000 sqm out of which a with 8,000 sqm sales area Carrefour hypermarket and a 32,000 sqm GLA shopping gallery on two levels (with approx. 200 shops). The clients will benefit of some 2,000 underground parking lots. The project will be delivered on the market in the 4th quarter of 2008. n n - will be an impressive mixed-use project combining office buildings, a shopping center, leisure and green areas located on Bucurestii Noi Blvd. The project will offer a 62,000 sqm shopping mall, with over 150 shops. The total parking space dedicated for this project will have almost 4,000 parking lots. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Source: CBRE Eurisko Retail Department n n 1. Unirea Shopping Center 2. Carrefour Orhideea 3. Plaza Romania 4. Cora Lujerului 5. Jolie Ville 6. City Mall 7. Carrefour Militari 8. Carrefour Colentina 9. Feeria Shopping Center 10. Cora Pantelimon 11. Bucure[ti Mall 12. Militari Shopping Center (phase I) 13. Auchan Titan & Iris Shopping Center 14. B\neasa Shopping City 15. Vitantis Retail Park 1. Esplanada 2. Casa Radio 3. AFI Palace Bucharest 4. Promenada Mall 5. Galleria 6. ParkLake Plaza 7. Sun Plaza 8. Liberty Center 9. Colosseum 10. AFI Golden Palace 11. Bucur Obor project 12. Mega Mall 13. Sparkassen Immobilien project 14. Grand Arena 15. West Park 16. Mega Designer Outlets 17. Bel Rom Colentina At present the highest rated luxury trade areas are the retail boulevards such as the Magheru Blvd., Calea Victoriei, Nicolae B\lcescu Blvd., Calea Mo[ilor, Calea Doroban]ilor and Unirii Blvd. with headquarters of the international companies, banks, advertising and public relations companies. is one of the most sought for location in Bucharest at the moment. The wide, one-way street crosses the city-center between the Northern financial and office center Victoriei Square and the administrative center near the Parliament Palace. Despite the very high car traffic at all times in the day, the very few parking options along Victoriei Avenue makes the pedestrian traffic very scarce. For these reasons, Calea Victoriei is the location of high class brands that are targeting a very specific shopper. Shops are not evenly distributed along the high street. There are three concentrations of shops: - the first one is close to Amzei Sq., one of the main shopping areas for fresh food, as well as for entertainment (bars, pub and various types of restaurants) Close to this intersection there are several international retailers that value the excellent visibility of the shops and the high pedestrian traffic created by the vicinity of Amzei area and Hotel Bucure[ti: fashion brands (Guess, Hugo Boss, Mexx, Stefanel, Catimini, Cerutti 1881, multi-brand shops with designer brands like D&G, Paco Rabanne, Sonia Rykiel etc.), shoes and accessories (Musette, Furla), perfumeries and beauty shops (Estee Lauder, Clinique, L'Occitane) and various deluxe interior design shops (Kyros Interior, Linea D'Oro, Kartell, Descamps, Destra). - the second one is located near the former Senate building, close to Hilton Hotel and Atheneum. This area has been chosen by 2 multibrand stores Victoria 46 and Mengotti and by other important brands like Gant, Pronovias, Philosophy by Emporio Armani. the third one is close the Universitatii Sq. that is a very crowded area especially for youngsters. The close vicinity of the University CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Bucharest is an atypical European capital, not including a clearly defined pedestrian shopping area. The downtown of Bucharest is formed by two important venues: Calea Victoriei and Magheru Blvd. The high street retail in Bucharest is not a destination yet, but it is expected to become one once the international retailers will enter the market (there are many operators already present in Prague, Budapest or Warsaw but not in Bucharest). CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET of Bucharest, Lazar College, Faculty of Law and Faculty of Dentistry influenced the presence of several brand retailers targeting the young customers: Vicina, Miss Sixty, Energie, Camper, Mariella Burani. Most of the shops located on Calea Victoriei have small surfaces ranging between 40-200 sqm, with large windows and elegant old-style architecture. Some brands like Escanda have decided to terminate the leasing agreement due to high rents, while others like Lancel have moved into B\neasa Shopping City, while Sisley has moved the store in a different location on Victoriei Avenue (Baldinini and Lacoste located on Magheru Blvd. have also relocated inside B\neasa Shopping City). one of the largest and most trafficked boulevards in Bucharest, that is the main access road from Roman\ Sq. towards University Sq. and continues with Br\tianu Blvd. that ends in Unirii Sq. Due to the Academy of Economic Studies Bucharest where there are currently some 22,000 students studying in this institution, and due to several offices and state institutions located within Roman\ area, this is probably the most crowded square in Bucharest. Magheru Blvd. has a variety of commercial activities. The retailers that rented the spaces a few years ago have mainly considered the high pedestrian traffic area like fast-foods (McDonald's, KFC). Within the past 2 years, there has been a fast growing development of retail banking, as all major commercial banks need to have a branch on this main boulevard (Alpha Bank, ING Bank, BRD, Banca Transilvania, Finansbank, Raiffeisen Bank etc). Main national and international fashion brands have opened shops, mainly to sustain their brand image. These are not exclusive brands as on Calea Victoriei, but mostly popular casual and sportswear for youngsters: Little Big, Terranova, Adidas, Time Out, Nike. Apart from these retailers, the presence of several hotels (like Ambasador, Lido, Howard Johnson etc) influenced the decision of choosing Magheru as a location for casinos and sports bets shops, as well as for jewelry and perfumeries. Some other important retailers present on Magheru Blvd are: INA Center, The Body Shop, Sephora Priorities (health & beauty), Levi's, Swarovski, Celinni (jewelery), Vodafone and Orange shops. An important sector of activity on Magheru Blvd. is stationery and books with over 20% of the retail being have this activity (C\rture[ti, Noi Bookstore and the new Diverta shop inside former Eva store). Currently the commercial profile of Magheru Blvd. is more of a services oriented artery compared to Victoriei Avenue which is a high end fashion oriented artery. is an exclusive avenue from the city center (Romana area) towards the Northern part of Bucharest, Doroban]i Sq. This is one of the most exclusive residential areas in Bucharest and this influenced the profile of commercial activities on Calea Doroban]ilor. The area is populated with some 70% of the Embassies and Ambassador Residences in Bucharest. The area has the reputation of one of the highest quoted retail sector, with a specific of luxury products sales. Within the past few years it has been a preferred location for furniture (Rovere Mobili), interior design shops (Casa Mia, Lida, Casa del Arte, Sarra Blu etc.), car & moto showrooms (Maseratti, Honda), Haute Couture multibrand stores like The Place concept store, The Place Accesories, pharmacies (Sensiblu, Help Net), small boutiques with niche products (expensive chocolates, wines, gifts). Also, the luxury shopping center of Mario Plaza is located on Doroban]i Blvd. and concentrates some of the most reputed home goods boutiques (Bigotti, Privilege, Daniel Hechter, Lush, Eleganza, Zia Pia etc.). Mario Plaza remains one of the most important shopping points that created the trend of luxury goods on Calea Doroban]i. has had an extremely quick development within the past few years, especially for sportsware (Nike, Ketler, Lotto, Fila), other fashion brands for consumers with upper-medium income (Rebelle, Yokko, Stonefly, Guess, Triumph) and services communication and retail banking (Vodafone, Orange, Banc Post, BCR, ING Bank, Unicredit }iriac, Volksbank, Raiffeisen etc), casinos (Admiral, Maxbet) and services. The retail premises are small, between 100-150 sqm and have large windows. Inside each shop there are separate areas for sale and for storage but they are well-connected and the access towards storage is fairly easy. The area is an excellent retail location as it is situated close to the city center and the areas with high traffic such as {tefan cel Mare, Iancului or Colentina. The connection with other large neighbourhoods is very good due to the large boulevards. is a fairly new location, compared to other commercial areas of the city. However, the nice residential area has quickly developed, especially in the banking sector and other financial services, as well as for showrooms for furniture and interior design shops. Unirii Blvd is the second financial area in Bucharest, after Victoriei Sq. All major financial institutions have branches on this boulevard. Both Decebal and Unirii Blvd are CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The surfaces of shops located on Magheru Blvd. vary between 20500 sqm. Some of them have also basement and mezzanine. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET also well known for showrooms (Natuzzi, Adorama, Berloni, Zepter, Biokarpet - for furniture, several shops with interior decorations as well and other materials for interior design). The commercial premises are situated along the Unirii and Decebal 6-lane boulevards connecting the East and Western areas and are located at the groundfloor or mezzanine of the blocks of flats. Within this area there are large retail premises, mostly over 200 sqm up to 1,000-1,500 sqm, near the Alba Iulia Sq. Most of these outlets have been transformed into bank branches or company headquarters. The most important retail fields other than banking and showrooms are: fast-foods, restaurants and pubs (McDonald's, La Mama, Zvon, Ruby Tuesday, Spring Time etc), international couriers (DHL), casino (Admiral), medical center (Centrul Medical Unirea). The main advantages of these retail premises are the large windows and the easy street access. Inside the shops the sale area is separated from the storage and the interior design is efficient. Apart from Unirea Shopping Center, the area is not a good retail location as the shops are rather scattered. Although the car traffic is very high and there are excellent loading/unloading facilities, the car park remains a problem. - are the most important semi-central commercial locations. The 6-lane boulevards are situated one after another and they form a part of a circle surrounding the city center. These boulevards link the North to the center and to the East side of Bucharest. The city center is only 10-minutes drive away. All the retail premises are located at the ground floor and mezzanine of the blocks of flats. They are medium-sized, between 200 and 400 sqm including the warehouse. There are very few retail premises under 100 sqm or over 500 sqm usually located at the main boulevards crossroads. Stefan cel Mare and Mihai Bravu boulevards are especially known for all shorts of showrooms (carsToyota, Nissan, Suzuki; lightning products, interior design and special construction materials - showrooms for tiles, floors, sanitary equipment etc), IT shop (UltraPro, Flamingo), retail banking (ING Bank, Banca Transilvania, Banca Romaneasca, Piraeus Bank, Raiffeisen Bank, BCR, BRD, Alpha Bank etc), pharmacies (Sensiblu, Help Net, Catena), casinos (Maxbet, Million $, Admiral), 2 Mega Image supemarkets. One of the main commercial centers is , with a surface of over 15,000 sqm. The merchandise is of low-to-medium quality The retail premises have large windows and easy street access. The interior is divided into sale and storage areas but the interior design is often of poor quality. The location has excellent retail potential especially near the intersections, with high car and pedestrian traffic. District retail areas like Pantelimon, Drumul Taberei, Militari, Titan, Colentina are an important segment of the retail market in Bucharest, mainly because these are located within extremely highly populated areas. The main features of the retail premises located within these areas are: n located at the ground -floor of blocks of flats (50-200 sqm up to 400 sqm); n main tenants of these premises are: food stores, white & brown goods retailers, banks, pharmaceutical chains etc. n the majority of the on street premises benefit form high pedestrian and car traffic. The rents evolved chaotically from 1989 in Romania. There is no logical progression of the asking prices, owners of shops being sensible to private incentives, rather than to economical facts. The improvement in quality of tenants and the longer duration of the leases did not lower the rents as expected, but stabilized them at a high level. On the main retail boulevards, prices range between EUR 30 and EUR 140/sqm/month according to surface, location and quality. Due the shortage of available supply within Magheru-B\lcescuVictoriei area, prices boosted in other well-rated areas: Calea Doroban]ilor, Calea Mo[ilor, Kog\lniceanu Blvd. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET and the interior of the commercial center has the looks of a bazaar. Only a few national retail chains have leased premises in Bucur-Obor: McDonald's, Domo or Altex. The commercial center needs to be refurbished inside and there are not enough parking lots available. CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET Source: CBRE Eurisko Retail Department The rental rates for retail spaces within shopping centers in Bucharest downtown locations vary between 30 and 140 EUR/sqm. In the table above, these are the average rents paid by tenants for typical retail units to date in Bucharest. The retail market in Prague is very active in terms of leasing and the lack of new opportunities on high street has lead to the increase of rents in prime locations. The most important high street locations are: - the most expensive high street in Prague, the usual size of the stores ranges from 200 to 1,000 sqm. The most important retailers present here are: Mango, Zara, Benetton, Adidas, H&M, New Yorker. - usually known as the center of Prague, retailers present here are: Bata, C&A, Kenvelo, Marks&Spencer, Debenhams. - the luxury high street in Prague where all the major luxury brands are present (Sergio Rossi, Hugo Boss, Christian Dior, Louis Vuitton). In Budapest there are two important shopping avenues: , extremely popular among locals and tourists, a very crowded pedestrian area, a true magnet for international retailers like: Zara, Mango, Promod, H&M, Max Mara, C&A. is expected to become the Central European Champs Elysees, an avenue filled with cultural, gastronomic and shopping destinations. Some retailers present here are: Louis Vuitton, Ermenegildo Zegna, Pelote, Caprice, Wolford. In other Central and Eastern European Capitals prime rents are at the following level: CB RICHARD ELLIS $ EURISKO $ ROMANIAN RETAIL MARKET The rental level is growing and there are no signs that it will register a decrease in the years if compared to the Western countries and even the neighbouring countries like Hungary, Poland and the Czech Republic. This report has been produced by CBRE EURISKO solely for information purposes . The information, opinions and analysis contained herein are based on sources believed to be reliable, but we cannot guarantee that it is accurate and complete. Readers should therefore exercise caution in utilising the information provided and should consult other sources as appropiate to verify the data.