Office, retail market vacancy rate slightly decrease

TIRANA, April 30 – Both office and retail markets in Albania experienced a slight decrease in vacancy rates during the second half of 2011 while the demand continued to stay strong, according to a report by Colliers International Albania.
The second half of 2011 saw slow activity in the office market with inactive developments in the office projects under construction in Tirana. Contrary to the office market, the retail market has already absorbed the new retail space introduced by Tirana East Gate which brought to the market additional modern retail space.
“The shopping center has attracted to the market, giant food retailer, Carrefour,” said Stela Dhami, Managing Director of Colliers International Albania. This is a definite positive entry in the Albanian retail market increasing customer choices.
To this effect during the second half of 2011, no new supply was added to office market segments in Tirana and this trend is expected to continue until the opening of the first phase of Tirana Business Park and TID.
On the other hand the retail market segment remains a very dynamic and growing sector in Albania. In November 2011, 41,200 mҠwere added to the traditional shopping center stock with the opening of Tirana East Gate, the largest shopping center in Albania. While the well-known DIY German chain, Praktiker, closed its only presence in Albania thereby decreasing the specialized shopping center stock by 11,000 mҮ
Vacancy rates in the office market during the second half of 2011 faced a decrease of 1% reaching the total office market vacancy level of 10% the equivalent of 6,365 mҠcompared to 11% or 7,000 mҠin H1 2011. Parallel to offices, the retail market experienced a slight decrease in vacancy rates with 0.01%, in the second half of 2011 compared with the previous period, reaching the level of 10.7%.
Average rental prices in the office market continued to remain stable with minimal fluctuations in selected office buildings during H2 2011. A few high quality office buildings observed even higher rental rates per square meter. Prime headline rents in the city center vary from Euro 17-24.5/mүmonth. While within shopping centers, rental prices have experienced a small decrease in H2 2011.
Colliers forecasts a stable first half of 2012 in rental prices and vacancy rates for both office and retail markets.