Growing retailers are now eyeing locations of ultracentral streets

• Seizing the opportunity of the 15% drop in rents

Retailer demand for new retail locations remains low across all sectors. Nevertheless, most operators are expanding across Romania, taking advantage of the steep drop in rent prices over the last 18 months, according to a study made by Cushman & Wakefield. Rent for the retail areas located on the best commercial streets dropped 15% between June 2009 and June 2010.

Răzvan Gheorghe, Partner Managing Director at Cushman & Wakefield Romania: "Despite the deep crisis that the economy and the retail sector in Romania are going through, international retailers are increasingly interested in the commercial arteries of the main cities. Clothing retailers, premium brands as well as discount retailers consider that commercial arteries are a viable alternative to the existing commercial centers. For instance, Zara decided to rent a street store in Piteşti, and DM opted for street locations both in Bucharest and in Timişoara".

Prices for most of the commercial locations in the world held out OK over the last twelve months, with rents in Latin America and Asia-Pacific seeing the largest increase, according to Cushman & Wakefield. The rent for retail areas located on prime locations increased in more than 66% of the 59 countries surveyed by Cushman & Wakefield, or remained constant throughout the year, until June. These findings paint a more optimistic perspective than the one of 2009, when rents experienced the steepest drop of the last 25 years.

Fifth Avenue din New York, where rent prices increased 23.5%, continued to hold the first spot in the Cushman & Wakefield chart, being the most expensive artery for nine years straight. Causeway Bay of Hong Kong continued to hold the second spot, and New Bond Street of London climbed two positions, surpassing Avenue des Champs-Elysées of Paris - which saw the largest drop in rent prices of the top ten locations (9.5%) - becoming the most expensive location in Europe.

Overall, Europe saw an average drop in rent prices of 4.5%. Grafton Street of Dublin, Ireland dropped from the eighth spot to the thirteenth, following a 25.8% drop in rent prices, and Ermou of Athens, Greece, dropped seven spots, due to a drop in rent prices of 15.4%. Romania moved down the 47th spot of the most expensive arteries in the world, after holding the 40th spot last year.

• Colliers: Increased interest in renting street commercial locations

In a report, Colliers International states that the street retail areas segment has seen increased activity in the first semester of the year. High demand over the first half of 2009, increased in particular for secondary arteries of Bucharest, as well as for a few ultracentral locations.

CrisTim, Cosarom and Agricola have intensified their commercial activities by developing and expanding their own store chains. Mic.Ro and Bet Cafe Arena have also expanded aggressively in the first semester, a trend which will continue in 2011 as well, according to statements by Colliers.

The people of Colliers claim that ultracentral locations did not see any major store openings this year, even though there are a few luxury brands which are negotiating the rental of locations on Calea Victoriei (Victoriei Avenue). Several such launches are expected to take place in the second half of 2010.