SOFIA, BULGARIA-Modern shopping centre space in Bulgaria doubled in the first quarter with the opening of five new malls to total 4.6 million square feet, and another five malls are expected to open by year-end in Plovdiv, Varna, Ruse and Stara Zagora, adding another 1.4 million square feet, according to realtor Colliers.

At the same time, increasing competition and weakening consumer propensity to spend is putting significant pressure on retailers. Vacancy levels in main high streets will continue to increase moderately but rental rates are becoming more attractive. Although most of Sofia’s newly-completed space has so far been absorbed, a surplus in Varna, Ruse and Stara Zagora is expected due to the economic slowdown and excessive supply. Two key malls in the capital - The Mall and Serdika Center - opened with more than 90% occupancy, but vacancies have risen moderately at other malls. Rents continued to fall, by 5% in Sofia and Varna, and 15% and 19% in Plovdiv and Burgas.

New malls also affected the performance of the main high streets. Brands are concentrating in the malls, where rental rates are lower, lifting overall vacancy to 10% in Sofia. High-street vacancies are seen trending higher for the next six months, making this sector more accessible, and with more incentives from landlords there is a good chance of a comeback mid-term. But high streets need upgrading to remain competitive, said Colliers Manager Iglika Yordanova.