Trade: Retail developers increasingly targeting small and medium-sized towns in Romania

Romania is increasingly positioning itself as a key retail market in Central and Eastern Europe, according to the ”ExCEEding Borders Report | Retail parks: Diverse Growth, Shared Momentum”, recently published by Colliers. While large cities previously accounted for roughly three quarters of the modern retail stock, developers are now shifting their attention towards smaller and medium-sized towns. Rising incomes and the appetite for modern formats are turning communities of around 50,000 inhabitants into attractive destinations for new investment and in this context, retail parks remain the main driver of development.   According to Colliers data, in Romania, towns with fewer than 100,000 inhabitants have a modern retail stock of around 70 square meters per 1,000 residents, a level that is 2 to 11 times lower compared to the other CEE-6 countries (Bulgaria, Czechia, Poland, Romania, Slovakia, Hungary).   “Romania still has significant growth potential in the modern retail sector. We see solid demand, fuelled by rising consumption and the interest of international brands in expanding, particularly through retail parks. These projects provide attractive yields for investors and an adaptable format for tenants, which makes them a winning long-term solution. In the coming years, every town with an active local economy and a population of at least 15,000 to 20,000 inhabitants will become a focal point for this type of development”, explains Simina Niculita, Director and Partner of the Retail Agency at Colliers.   The data shows that the modern retail stock in Romania’s larger cities, those with over 100,000 inhabitants, is broadly comparable to other countries in the region (slightly above Poland and Hungary, but below Czechia). This does not mean there is no further room for growth, but rather that expansion strategies need to be more nuanced. In the 50,000–100,000 inhabitants category, differences are visible, but the largest gap compared to most CEE countries is in towns with populations between 10,000 and 50,000. Here, Romania averages around 70 square meters of retail space per 1,000 residents, well below the approx. 500 sqm seen in Czechia and Poland, or the 800+ sqm in Slovakia.   The expansion trend of retail parks into smaller and medium-sized towns is visible across all Central and Eastern European markets, confirming the maturity of this format. In Poland, retail parks now represent around 22% of the total modern retail stock, up from just 9% in 2015, becoming the preferred solution for towns with fewer than 100,000 inhabitants. In the Czech Republic, where the market is already well developed, growth continues through smaller-scale projects anchored by strong tenants and tailored to local needs, while in Bulgaria this format is consolidating as the main expansion vehicle for mass-market brands and discounters.   Romania is currently at an intermediate stage, with a market that remains under-served but shows clear growth prospects, Colliers consultants highlight. As incomes rise, every town with an active local economy and a population of more than 15,000 to 20,000 inhabitants is likely to attract at least one modern retail park in the coming years. Such schemes respond both to proximity demand and to retailers’ interest in expansion, particularly where these towns are located near a larger city.   A common feature across the region is the important role played by discount and value retailers such as Pepco, Lidl, Jysk or KIK, which consistently draw customers and provide security for landlords. In Romania, more and more projects go beyond the traditional retail park model by including food courts, services and entertainment areas. This transforms them into community hubs, where people come not only to shop but also to spend leisure time and enjoy a wider variety of options in one place.   “Recent developments are placing increasing emphasis on sustainability (ESG) criteria, by integrating energy-efficient buildings, green spaces and environmentally friendly mobility solutions such as electric vehicle charging stations or bicycle access. At the same time, retail parks are becoming key nodes for omnichannel retail, with click & collect services, return points or showrooming options that complement the classic shopping experience and strengthen the role of these schemes as local logistics hubs”, adds Simina Niculita.   On the Romanian market, local investors are playing an increasingly visible role. Some apply a “build & hold” strategy, developing and keeping assets for the long term, while others are open to selling. Prime yields for retail park projects range between 8% and 9%, depending on location and tenant mix, confirming the attractiveness of this asset class in a context where demand remains strong and competition limited in smaller and medium-sized towns. This dual strategy – retaining income-generating assets while selectively disposing of certain retail parks – illustrates the market’s maturity and the growing interest in diversifying and expanding networks nationwide.   In the medium and long term, Colliers expects retail parks to continue multiplying across all categories of towns. Increasingly, projects will combine shopping areas with residential, office or leisure components, turning into true centres of local life. At the same time, Romania is becoming ever more attractive for international investors, due to its strategic position in the region, its strong growth potential, and, above all, the excellent performance of retailers.