BulgariaBulgaria is located in southeast Europe and bordered by Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south and the Black Sea to the east. Bulgaria is a relatively small market with a population of just under 7.5 million and below European average spend per capita. The majority of the population lives in urban areas, including Sofia, Varna, Plovidiv, Burgas and Stara Zagora. Sofia, the capital is the focus of most commercial and cultural activities. The country joined NATO and the European Union in 2004 and 2007 respectively.

The top five cities have seen most of the modern retail schemes and the retail market is still in the development phase. Bulgaria has much lower than the European average of retail space per capita. While retailing in Sofia is segmented into high-street and shopping centre space, this is less common outside the capital. The last projects of the boom legacy are due for completion by the end of 2014. After this wave of shopping centers, the Bulgarian market will enter a more mature phase with sufficient stock, variety of brands and a limited development pipeline.  

ECONOMIC INDICATORS*2011201220132014F2015F
GDP growth
Consumer spending 1.73.3-
Manufacturing production 6.0-
Unemployment rate (%) 9.611.111.311.510.5
Lev/€ (average) 1.961.961.961.961.96
Lev/US$ (average) 1.411.521.471.461.53
Interest rates 3-month (%)
Interest rates 10-year (%)

NOTE: *annual % growth rate unless otherwise indicated. E estimate F forecast. Source: Oxford Economics Ltd. and Consensus Economics Inc

Population 7.3 million (2013)
GDPUS$ 53.0 billion (2013)
Public sector balance -1.5% of GDP (2013)
Government debt18.9% of GDP (2013)
Current account balance1.9% of GDP (2013)
Parliament A minority coalition of the BSP and the MRF with the tacit support of Ataka
Head of State Rosen Plevneliev
Prime Minister Plamen Oresharski
Election dateOctober 2016 (Presidential) May 2017 (Parliamentary)
Retail Volume-
Retail Value-

Source: Oxford Economics Ltd. and Consensus Economics Inc

Stara Zagora149,063
Note: Population by current Address
Source: Civil Registration and administration services

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Bulgaria: 42.733883, 25.485830


Picadilly (after expected divestment of Delhaize but sale not finalized at the time of writing), Fantastiko (Sofia mainly), Promarket (Sofia only),Verdi (Sofia only), 345 (Sofia only)


Billa, Kaufland, , HIT, T-Market, LIDL, Carrefour


Andrews Fashion, Paolo Boticcelli, Danaya, Chippolino, Hippoland, Adelly, Teodor, Rollman, Boté Fashion, Technopolis, Technomarket, Zora, Arena Cinema, Ciela, Komsed


Inditex Group (Zara, Stradivarius, Bershka, Pull & Bear), H&M, Peek & Cloppenburg, MNG, LPP (Reserved, Cropp, House, Mohito), Grupo Cortefiel (Cortefiel, Women’s Secret, Springfield), LC Waikiki, Adidas, Decathlon, Sport Vision, NewYorker, Humanic, Deichmann, Marks and Spencer, Terranova, Puma, Nike, Mothercare, Imaginarium, Bauhaus, Baumax, Ikea, JYSK, Mr. Bricolage, dm, Lilly

Food & Beverage Operators

Costa Coffee, McDonald’s, KFC, Burger King, Starbucks, HAPPY (domestic), Subway, Fancy (domestic), Thanh Long, NordSee.

Shopping Centers10.00 - 22.0010.00 - 22.0010.00 - 22.00
Street Shops10.00 - 20.0010.00 - 20.0010.00 - 19.00

High street retailing in Bulgaria is generally comprised of ground floor premises in old administrative or residential buildings and therefore it does not generally meet the requirements of modern and international retailers. There are however a number of high streets in Sofia which are now attracting attention of international brands and retailers, though there are difficulties in finding suitable premises, as many of the stores are small in size.

Malls and trade centers are the preferred retail store locations among consumers and retailers alike. New shopping mall schemes attract significant consumer attention and retailers expand in order to maintain and/or increase their market share. The first shopping centers only opened in 2006 and total GLA increased significantly at that time. A second wave of new malls followed in 2010 when Serdika Center and The Mall opened.

The most recent openings included Paradise Center in Sofia (80,000 sq.m in Q1 2013), the Strand in Burgas (30,500 sq.m in Q3 2013) and Panorama Mall in Pleven (17,500 sq.m in Q2 2014).

Modern shopping center stock stood at 735,000 sq.m as of March 2014 and is expected to total 871,000 sq.m in the end of the year if all shopping center projects in the pipeline open according to plan.

Restructuring due to non-performing loans has been a notable trend in the most recent couple of years with four centers taken over by their lenders and one sold to new investor.

The only opening so far in 2014 has been the Panorama Mall in Pleven, a 17,500-sq.m development which was successfully revived after the original developer defaulted on the loan prior to opening. Sofia expects three centers by the year-end totaling 119,000 sq.m. However, once these are open, the future supply pipeline will be limited as the market will become more mature and saturated.

On the demand side, after arriving in Sofia and covering the bigger cities, international retailers like H&M, Deichmann and dm are exploring third-tier cities with the ones with existing shopping centers the first to benefit from their expansion. Pleven and Veliko Tarnovo have gained from this trend so far.

Food retailers have also been active nationwide in shopping center, high-street and car-traffic locations.

Thanks to strong summer tourism flows from Eastern Europe the two big coastal cities, Varna and Burgas, have also seen stronger demand for retail space in shopping centers with Massimo Dutti, the upscale Inditex brand expanding to Burgas, and Roberto Botticelli opening its only store in the country so far.

Big-box retailing is present in Bulgaria, although it remains limited as regards real estate development on a speculative basis. After more than a decade of expansion the last couple of years brought more evidence of restructuring in the segment. Delhaize decided to sell their local operation (Picadilly) to local joint venture and Praktiker’s administrator sold the local business to Technopolis, one of the leading electronics retailer. These events followed the earlier departure of Slovenia’s food retailer Merkator.

Meanwhile, Decathlon started trading in this segment and Mr. Bricolage is making a debut at a shopping center in the second half of 2014. Carrefour, Billa, Lidl and Kaufland pushed ahead with expansion.

The outlet center market in Bulgaria is still immature. There are only several outlet centers such as Sofia Outlet Center, Via Trakia, Puma Outlets plus online outlet shopping sites.

E-commerce has made gains over the recent years but most retailers operate with a traditional business model with a focus on physical retail operations. However, many retailers are adopting a more multi-channel approach to provide customers with a possibility to shop online as well as via a mobile phone. There is a steady increase in the number of people having purchased/bought goods or services over the Internet. The overall trend is that e-commerce will develop further and retailers will allocate resources to initiate both market expansion strategies.

While some brands present in Bulgaria have entered through franchise deals, increasingly the trend is for international retailers to enter the market directly. In some cases international retailers have bought back the franchising rights from franchisees.

There are no restrictions on foreign companies. Bulgaria offers good investment conditions and a relatively calm investment climate. Greek retail conglomerates have built presence in the market through regional franchise and joint-ventures with global and European heavyweights like Carrefour, IKEA, Starbucks and others. Spanish retailers have been more active in the most recent months.

Lease contracts tend to be landlord oriented. The term is usually 5 years for regular tenants with a break option after the third (for projects outside Sofia). The rent is base or turnover rent (whichever is higher), service charge, marketing fee, no common areas included. Fit-out is usually at the lessee’s expense but fit-out contributions are negotiable, especially for anchors. The tenant needs to provide collateral for the rental agreement (usually a three-month bank guarantee or deposit).

Access to the property market for retailers is relatively straight forward with no clear restrictions or obstacles. The time taken to secure a store varies depending on the project. It can take anything so some retailers will find it difficult to open on high streets.

Paradise CenterSofia80,0002013
Sofia Ring MallSofia69,0002014 (expected in September)
The MallSofia66,0002010
Grand MallVarna52,0002010
Serdika CenterSofia51,0002010
Galleria PlovdivPlovdiv45 0002010
Mall RuseRuse35,5002010
Galleria BurgasBurgas34,8602012
Mall VarnaVarna33,0002008
Bulgaria MallSofia33,0002012

New Entrants to the Market

CortefielWomen’s SecretSpringfieldDecathlonDesigual
CineGrandNotos Galleries

Lease TermsWhile becoming increasingly standardised, leases do still vary depending on the landlord. Lease contracts are enforceable where they have been correctly agreed and notarised if required. Terms of a minimum of 5 years, especially in prime modern retail centres. Anchor tenants are usually required to sign a 10 year contract. Leases longer than 10 years are rare. For smaller schemes lease terms are typically shorter (between 3-5 years). Rents are quoted in €/sq.m/month as the Bulgarian LEV is pegged to the Euro. Both parties are able to close a lease with one-time break option in the 5th year. If this option has not been applied, there is no possibility to terminate the lease contract with a 6-month notification in the next 5 years. Regarding tenant substitution option, the tenant has to sign the lease under the same terms (applicable to all shopping centres leases). On restrictive user clauses, the transfer of property ownership does not automatically break a rental agreement that the previous landlord negotiated because the contract was signed in front of a notary. In such cases the new landlord is entitled to break the lease not earlier than 1 year after the acquisition. If the rental agreement is notarised and duly registered at the Registry Agency by the tenant they are protected against unilateral break for the entire lease term.
Rental PaymentThe rent is usually payable monthly in advance. Turnover rents vary between 3-8%, depending on the tenant. For café tenants, they are as high as 12% for example. Rent deposit for 1-3 months is usually required in the form of a cash payment or bank guarantee letter. For anchor tenants a guarantee from the parent company is accepted but not preferable. Turnover rents are becoming more prevalent for occupiers who take more than 1,000 sq.m.
Rent ReviewThere is no standard review mechanism and this may be negotiated in the lease. Rents are indexed to EU HCPI or the Eurozone HCPI index. Indexation to Bulgarian CPI is rare for base rent, though it is applicable to service charge. All leases are signed for a definite period of time. On expiration of the term of the lease the lessee has the right to negotiate a further lease for a definite term. If no contract is signed the tenant is required to vacate the premises. Key money is only applicable for high street units and it is extremely rare.
Service Charges, Repairs and Insurance Service charges for retail are typically €5.00 to €6.00/sq.m. Utilities are not included in service charge. The tenant pays for these separately. The Landlord is responsible for the main structure (may be charged to the tenant through the service charge). Repairs and support of the building is made by Landlord and paid by service charge. Improvements are made on Landlord cost. Tenant: minor outlays and superficial repairs. In a multi-let building, the landlord may provide such services but charge back via the service charge. The tenant is usually also responsible for reinstating the premises to their previous state, with the exception of wear and tear at the end of lease. For retail the premise are given back in good conditions with fit outs as floor, ceiling and installations. Landlords are responsible for insuring the main structure while the tenant pays internal insurance.
Property Taxes and other costs VAT at 20% can be charged on rental payments but it is usually recoverable by most tenants (tax advice should be sought). Building fee and garbage fee are paid by the tenants Garbage fee is proportional to the leased area. As to letting costs (commission), in shopping centres they are at landlord’s expense. In case of tenant representation, the tenant pays the commission. On high streets, letting costs are negotiable and could be assumed by both parties.
Disposal of a LeaseSubletting is typically not allowed, apart from situations where the subtenant is a subsidiary of the prime tenant. Pharmacies can sublet due to amendments in Bulgarian law. As to tenant liability, the tenant is responsible for the repair of any damage except for capital expenditures and normal wear and tear. There is no liability following disposal of the premises upon lease expiry. Early termination of the lease contract is possible only by break clause or mutual consent.
Valuation MethodsFor shopping malls, a DCF model is the most usual method for valuation. High street shops valued using a market comparison approach.
LegislationThe applicable legislation related to Lease Contracts is Bulgarian Law on obligations and contracts governs any disputes, including the commercial law. There are no prospective changes to the legislation at the moment. There are no restrictions on foreign ownership of commercial property.

Bulgaria Contacts


Head of Retail Space
Forton, Cushman & Wakefield Alliance Member
47A Tsarigradsko Shose Blvd.
1124 Sofia, Bulgaria
Tel: +359 2 805 90 10
Mob: +359 2 805 90 10