Growing Competition in Retail Space worrisome for Retailers

Tirana Jan. 5, 2008 – A giant shopping mall that will open later this year is expected to increase competition in the Albanian retail market and drive down prices of commercial real estate.
“The City Park project will include a shopping center of 39,000 m2 (419,800 sqft), a food court, an electronics superstore and an international hypermarket. It is scheduled to open in the second half of 2009″, according to Colliers International the real estate leasing agent for the project.
City Park Tirana, will increase Tirana’s current retail market inventory by 74 per cent.
“Such projects will increase retail market inventory to 250,000 SQM, and that is dizzy”, the biggest shopping center in Albania “Qendra Tregtare Univers” said in a press release last year, when it saw for first serious competitors, Casa Italia, entering in the market.
“The latest expansion of QTU and the upcoming opening of City Park Tirana will increase the supply side pressure on the retail market prices. As a result, the prices are expected to decrease slightly although the demand for retail spaces will remain high”, said Colliers International in an market review early this year.
QTU realized revenues of USD 47 million during 2007, mainly from its food courts Euromax. Euromax, the first retail chain in the country was brought by Delta D.O.O of Serbia for 29 million euro in 2008. Currently there are 55,000 SQM of space in seven shopping centers in Albania.
The Albanian real estate market is seen by foreign investors as being on the cusp of a building boom as the country slowly emerges from transition and its European Union prospects improve.
Albania was invited to join NATO last April, what analysts saw as a further sign of growing stability.