Fllowing a 9-years-long rehabilitation program, which led to significant improvements in the quality of infrastructure and public access, the Old City Center in Bucharest, Romania, has become one of Romania’s favorite destinations, famous across Europe for its numerous entertainment options.

Considered by many “the rising star of Bucharest’s high-street market”, Lipscani Street saw the most effervescent evolution ths year, resulting in 20% rent increase and virtually 0% vacancy. As a consequence of its high pedestrian traffic, the street has triggered the attention of many investors and fashion retailers, which culminated in the opening of one H&M flagship store earlier this month – seen by most players as the ice-breaker in this emergent fashion market.

“The launch of H&M in the Old City Center confirms its position as the most sought-after commercial area in Romania and reiterates Lipscani Street’s prerequisites for becoming the most attractive shopping avenue in Bucharest, similar in terms of attractiveness and development potential to other famous European shopping streets. In addition, recent efforts towards improving the area’s infrastructure - such as the opening of the underground parking or restoration of the main streets - contributed heavily to strengthening both the pedestrian and road access, which led to a considerable traffic increase. We believe that in a short time, the Old City Center will become not only the center of evening entertainment, but the ideal meeting place for lunch or shopping. Basically, with the opening of H & M, the first fashion anchor in the Old Town, the area will become an outdoor shopping mall”, says Liana Dumitru, Associate Director in the Retail team of Colliers International Romania.
The study’s key-findings offer a detailed overview on Bucharest’s Old City Center and its prerequisites for becoming Europe’s favorite emerging fashion market – please see the study below.


REHABILITATION OF THE HISTORICAL CITY CENTER

Bucharest’ old city center has a total surface of approx. 50ha, located in the geographical center of the city and comprised between:
• North: Regina Elisabeta blvd.

• East: Hristo Botev blvd.

• South: Corneliu Coposu blvd. and Splaiul Independentei

• West: Calea Victoriei

The area counts cca 520 buildings out of which 40% are registered as being architecturally significant. The rehabilitation of the area is part of an ample program launched by the Bucharest City Hall in November 2003. The first half of 2012 saw the completion of infrastructure works in the Pilot area of the Historical Center, covering the 16 pedestrian arteries and 3 small squares in-between the I.C.Bratianu boulevard (east), Calea Victoriei (west), Splaiul Independentei (south) and Regina Elisabeta Blvd. (north). In the second part of the year, the underground parking in Universitatii Square was finalized, resulting in 500 modern parking spaces.

The 9-year-long construction works aimed the rehabilitation of the utilities network (water, sewerage, marsh gas, elecricity and telephony), as well as the road infrastructure which is now almost entirely pedestrian. According to the public authorities, the next step towards consolidating the historical city center will be the restoration of the buildings’ facades.
While rehabilitation works reached the end, the area has become one of the most important social and cultural destionations in Bucharest, attracting a considerable number of tourists.

COMMERCIAL DATA

Given the small number of renovated buildings and international brands in the area, it would be a haste to speak about a mature high-street market in the Old City Center of Bucharest. However, we can say that Lipscani Street is becoming more and more an attraction for the fashion segment. The size of available spaces varies between 50 and 2,000 m2, but the majority is comprised between 200 – 500 m2, distributed on 2, 3 or even 4 levels. The total stock on Lipscani Street consists of approximately 19,000 m2 of commercial spaces.

Taking into account the type of retailers, the Lipscani Street is divided between the following retail categories: leisure (11 spaces), international or national fashion brands (9 units) or local fashion/fabric stores (18 units). Services take a secondary role in the area, mainly represented by banks, pharmacies or natural products stores.
Also, while the number of vacant spaces on Selari Street is only 4, Lipscani has 6 available spaces, plus an unexploited land plot – all to be refurbished or with unclear legal status.
Given the high pedestrian traffic, as well as the range of large available spaces, suitable for fashion stores, Lipscani Street attracted the interest of anchor retailers looking to open a new location nearby.

At present, the area hosts an Adidas store and a series of smaller retailers such as Lashez and Be in Time. In addition, the area hosts its first large fashion anchor, with the opening of the much expected H&M store earlier this month, followed by the first CATO store in Bucharest and one Koton store in the spring of 2014.
Among the main problems of the area, we can claim the significant number of buildings that require refurbishment works, the limited surfaces per level, especially on the ground floor (forcing owners to lease the entire building) as well as the legal issues. However, international retailers currently seeking a new location are interested in the Old City Center and will, most probably, adapt to the available offer.