The economic downturn has delayed or outright frozen numerous projects for retail centres, but those already on the market have run into their own trouble – strikes by unhappy tenants demanding lower rents, showing that some retailers and managers may had grossly inflated expectations of the market.

In fact, retail centres, or rather, successful retail centres, are likely to need a significantly longer period of time before they can become part of Bulgaria's business reality. 

Newly-completed shopping malls, such as the Mall of Plovdiv or Bourgas Plaza, are for now enjoying high occupancy levels, Stroitelstvo Gradut weekly has reported. Both those projects had the advantage to be the first in their respective cities, which are awaiting the arrival of four or five more retail centres in the pipeline.

The question, however, is whether Bulgarian shoppers can keep them busy enough and how many new retail centres can the Bulgarian market accommodate. The problem is not solely on the shoulders of investors, but the purchasing capability of the average Bulgarian. 

Most Bulgarian retailers are small and have little experience or access to financing. Unlike their western counterparts or Greek franchisers in the country, they cannot endure longer periods of inactivity or sustained weak sales for a period of more than 12 to 18 months, Stroitelstvo Gradut quoted David Davidov from consultants Colliers International as saying.

Factor into that the statistic that average Bulgarian household spending for clothing and shoes decreased in February alone by nearly 9.5 per cent and the outlook for retailers is far from rosy.

In some malls in Bulgaria, rents reach as high as 50 per cent of turnover, whereas most businesses see 12-15 per cent as a more acceptable figure, Stroitelstvo Gradut quoted Marinos Miniotis, general manager of Greek apparel chain Sprider, as saying

Investors, for their part, have little wiggle room to cut rent after banks have tightened their requirements on the loans given to build most malls.

Meanwhile, international real estate consultants Cushman&Wakefield have said in a report that 10 million sq m of shopping malls were in the pipeline, down 40 per cent compared to the amount the firm projected in July 2008. Cushman&Wakefield also reckoned that come 2010, only seven million sq m of new retail space will be built, which would be the slowest growth since 2005.