Rental for high street retail areas dropped by as much as 48%

Real estate services firm "Cushman & Wakefield" Romania claims, in its "High Street Retail" report, that half of the most prestigious retail avenues in the world and in Romania, have been affected by the global economic recession. Răzvan Gheorghe, general manager of the company, said: "After a period of approximately five years of 100% occupancy rate on the major avenues of the major cities, 2009 brought with it a 20% drop in the occupancy rate. Unfortunately, one of Bucharest"s major avenues, Calea Victoriei, was hit the hardest, due to the crisis as well due to lacking parking spots and infrastructure improvements - which are sine qua non conditions in the case of luxury retail. Bucharest"s historical center will most likely see the first project for improving conditions for high street shops".

According to a press release sent to our editors, most of the rental contracts concluded were mostly renegotiations of older contracts, to lower rates. Demand for high street retail areas is shrinking, with most retailers putting expansion on hold, while existing tenants continue to renegotiate rental contracts. On average, rents shed 20-30% over last year"s September, said Răzvan Gheorghe.

Rents for high street spaces located in major areas such as Magheru Boulevard and Calea Victoriei, have reached 70 - 80 Euros/sqm/month, the equivalent of an annual drop of 45 - 48%. In other major cities, such as Braşov, Constanţa, Timişoara, Iaşi, rents for central retail spaces revolve around 35 - 40 Euros/sqm/month, while rates with Cluj rise by 25-30%.