Commercial Space Rent Drops Hits Two-Year Low

Alina Toma Vereha

On a rental market that has reached a two-year low, two categories of commercial space were very profitable in the first quarter of 2009, keeping the average from collapsing: commercial centres that include hypermarkets and, respectively, shopping malls. Nevertheless, this type of space, too, was subject to renegotiation. Representatives of RE/MAX Bastion indicate that "Most commercial spaces have been subject to rent renegotiation lately. However, while street-front commercial spaces in the centre of Bucharest dropped approximately 28% between January and end-March, and some of them were even vacated, the rent for commercial spaces located within large commercial centres decreased by only 10%. Shopping malls lost only 19% in the same period."

Rent for commercial space within a commercial centre including a hypermarket decreased from 30-50 EUR/sq.m. in January to 25-40 EUR/sq.m. at the end of Q1. In the same interval, rent for commercial space within a shopping mall decreased from 60-100 EUR/sq.m. to 50-80 EUR/sq.m. According to a press release to BURSA, shopping malls are beginning to appear increasingly attractive to luxury brands that used to prefer the central boulevards of Bucharest. Premium areas such as Magheru, Calea Victoriei or Dorobanti are losing customers to malls and commercial centres due to their unattractive ratio between high rents and low visitor traffic.

The rent for downtown premium commercial space decreased from 60-80 EUR/sq.m. in January to 40-60 EUR/sq.m. in end-March. According to RE/MAX Bastion, such space is now available for the same price as in 2003-2004, with prices set to decrease until the end of the first half of the year, although the negative peak has already been passed.