[size=85:3no9xrgb]Regal 30 May 2010

Five project areas with large stores be built in Sofia

Are you tired of looking of malls in recent months? Now come the parks. Once cities are filled and some prepalniha with malls and shopping centers, business parks are wrong (Retail Park - an area on the outskirts of large stores). Currently, at least five projects under construction in Sofia. With the slower trend is valid for some cities in the country.

These projects are happening, although it is a crisis and the market as a whole is languid. There are several reasons for this: niche business park is almost empty, they are low risk for investors, while their returns are. On the other hand, offer new opportunities for tenants. Through new business parks market chains will start work soon in Bulgaria.

Park value added

In concept commercial parks far from the city center. Cover large areas, around which there may be nothing. Little by little they become cities for shopping. Visitors traveling to them their sole purpose to spend money - to load the refrigerator for a week, to furnish the house.

Therefore, commercial parks have to offer variety. They usually include a few large sites (big biksove) for general parking and a combination of food, furniture, sports, kids, shop equipment and the type of DIY.

Until recently, the Sofia had something like retail parks, which were mounted to stores. Ten years ago as the place where is now the first object of the Metro, there were only fields. Metro decides that the location is suitable and build hypermarket. Gradually, other traders' primaknaha and now has "
Tehnomarekt, Outlet Center, will soon have a shop and household goods. Such partnership is also in the province. Varna example zarabotiha one another Praktiker, "
Piccadilly"
and then smaller shops. In Pleven also get a good combination of Praktiker, BILLA, "
Technomarket. But in these cases, the combination appeared subsequently.

When the concept of retail parks synergies in the fetus. Typically, the developer selected the location, assess and begin to build the area. Projected that there will be four or five sites, build the necessary common infrastructure and then begins to "
complete the boxes ...

Not despite, but because of the crisis

In Sofia already has at least five active projects. Until recently, this niche was relatively empty. Crisis investment focus shifted from expensive and glossy projects to those that can happen more easily, are safe, although a small return.

In the most advanced stage of construction is commercial Park Blvd Vladimir Vazov and that behind the Central Station (see infografikata). Both shops have already finished and others are under construction.

Things happen slow and difficult, but still poses potential segment, said Angel Velev, which is representative of the commercial fleet Sredets behind the station. So far no real genuine retail parks, he said.

There are different business models, but two are fundamental. The first entrepreneur okrupnyava land, build infrastructure and then sell the land to traders. This model is rare now because it deals with land prices are low and investors have no interest in selling.

Intermediate option in which the trader employs only part of the park land and finance the construction itself. We square meter of land is given in the range between 2 and 5 euros. The larger size and the chain wants more customers are supposed to attract, so the rent is lower.

The second model is the entrepreneur tenants, building sites, their taste and criteria and then receive their rental buildings.

Overall business is interesting because the risk is relatively small. Once secured, tenants ensure steady profitability. The commercial fleet model gives flexibility to the investor. It can start building once the store has found tenants. The complex can be developed in phases, without prejudice to the activities of traders who opened first.

Krassimir Gurdev, representative of Veliko Tarnovo Retail Park, explains that with each successive stage areas are more easily attach. Once working, the commercial park becomes a secured location with traffic and development predisposes to another kind of business.

In the retail park construction costs and overall investment has been lower than those in shopping malls. This is another plus for the park. Here it comes to cans without special architectural imagination (no coincidence that their name is the other big boxes - large boxes). If investment in a mall and could reach 200 million euros in this business park will hardly exceed 30-40 million with the land, people comment on the market.

In most cases, and rents are tied to sales made on the premises. More precisely, the contracts stipulate that the trader owes a percentage of turnover, but it must not be lower than a flat amount. The result is that developers can offer competitive conditions of the tenants. For example, in projects in Sofia now has contracts for 6-14 per square (the key tenants). In malls levels are twice as high.

Another advantage is that tenants are less and relations with them are correct. And last but not least, their business is stable and the park owners have no problem with the collection of contracts.
All these conditions now meet the needs of both chains seeking expansion, and entrepreneurs. They increase the chance of project work and make it preferable to most other real estate investments. It is believed that the input is restored in about seven years. Given that contracts with tenants are usually at least 10 years, the parks seem more enticing. No chance in the last year this segment attracted the interest and active investment funds.

New changes

With retail parks and new species come merchants. If we divide Retailers Shape into two types, first are those that have major concepts and shops on 10 acres. Are needed for large spaces. These chains can not lock in malls or in the central parts of cities.

This explains why at this time with commercial parks appear on the market and new circuits. For example, Serbian Tempo, which sold groceries, will have a hypermarket in Sredets shop behind the station and it is already under construction. It will be spread on 26 sq m, of which 18 thousand will be retail space.

Another example is the French sporting goods chain Decathlon Germany or the type of "
DIY"
Bauhaus. Both are preparing to enter Bulgaria (see box "
new interest"
). The concept of the Decathlon is also a commercial area and have a course search and therefore land of 20 acres. Bauhaus also extends into large areas.

The second group are those retailers who have stores of different formats and can work both in malls and alone. For them to have advantages in the retail park are small: in the rental costs are lower than those in the malls, the chain is not as dependent on other tenants and can be operational before the other, can deploy assortment of large areas and to experiment with form.

"
At the retail park has a clear consumer value. There customers go to shop. While the mall is going and fun, and walk, not necessarily for shopping,"
said Director of Mercator food chain in Bulgaria Yordan Terziiski . The company will open its first store in Sofia Park Blvd Vladimir Vazov and has agreed to field one of the newer retail parks - in the neighborhood Sheep fonts.

But not every trader can enter the retail park. While there are shops and malls from 50 to 100 meters, in commercial parks are at least ten times larger. That is the trader must be able to afford to maintain such a facility and offer the appropriate product for him. As a chain of building materials can not enter the mall and boutique shop has no place in the park.

In this type of accommodation there are always one or two chains, which act as magnets and attract behind other tenants, and then customers. They usually negotiate the best conditions, added the executive director of the consulting agency Sergei Koynov Forton.

Risk losing
risk Wins

Like any business initiative, and this risks. Building a retail park does not mean that he will surely be successful. There are many obstacles that could jeopardize the project. The first relates to the mentality of the Bulgarian consumer and his willingness to traveling a certain distance to go to the store. Dealers say they have repeatedly overestimated the mobility of customers in Bulgaria. The business plan of a shop on the basis of potential buyers around the site as well, and within a radius of 50 km. But often the distant customers not to travel to the store. This accounts and failed business plan.

The second risk is related to infrastructure. Some of the projects and are currently being made in Sofia, they need to improve access to them. By Park Sredets example can be reached by Diversionary routes. Has a plan to build a tunnel under the railway line, but so far funding is questionable. If access is complicated, customers may abandon their journey.

To overcome both the risk must have "
magnet"
in the commercial park. Store that is truly worthy to lead the public to travel to it.

Last but not least is the issue with measured investment risk. Years ago in the Sofia had no mole. Now there is certainly ample. If at some point appear too many retail parks, there is no guarantee that all will be successful. Because it is difficult to replace concrete and iron to plant a tree.

New interest

There is a chance the new retail parks on the Bulgarian market to emerge and new traders. French sporting goods chain Decathlon some time looking at possible leads and conversations with entrepreneurs, sources told Capital. The representative of Bulgaria Olivier chain Phillips in December confirmed the newspaper's interest in the chain but said he still can not say whether there is a signed contract for a specific project.

Chain leads talks with most active retail parks in Sofia. The concept includes its catalog of about 4 sq m and four times more land for playground.

Germany's Bauhaus is another major chain, seeking a place on the market. It is the kind of "
DIY"
and is a direct competitor to the already familiar Praktiker, Baumax and Mr. Bricolage. In the coming months from both chains are waiting for news at a specific location of their first stores. Now know that their focus is Sofia.
First in the country ...

Although the capital is the main focus for investors in retail parks, the first wave of such projects passed in January. Currently operating successfully two similar complex in Veliko Tarnovo and Plovdiv. The total for both is that they are located in the city itself, not its periphery. The complex was opened in Veliko Tarnovo at the end of 2006, while that in Plovdiv - the beginning of 2009 In the conceptual stage are still several projects in Sliven, Bourgas, Pleven and even second in Plovdiv.