Money Buzz! Europa

Tag: retail

  • Retail sale in non-specialized stores sector – positive evolution of revenues

    Retail sale in non-specialized stores sector – positive evolution of revenues

    • In Bucharest-Ilfov region, retirees spent the most on food and drinks in 2018;
    • The level of indebtedness in the sector of 61% is decreasing compared to the previous years;
    • The coverage degree of short-term debt through net cash increased from 9% in 2014, to 22% in 2018;
    • The average duration of receivables (DSO) is lower compared to the nationally reported threshold;
    • More than half of the companies (55%) registered a net loss at the end of 2018, and 21% of them had a loss of more than -20%;
    • Around 44% of the companies analyzed have a sub-unit liquidity (current assets do not cover current debts);
    • The consolidated net result at sectorial level decreased from 2.8% in 2017, to 2.4% in 2018.

    A new study conducted by Coface Romania on the sector of “Retail sale in non-specialised stores with food, beverages or tobacco predominating” (NACE 4711) indicates a positive evolution of revenues in 2018, which increased with approximately 8% compared to 2017, with a slightly lower profitability.

    The study aggregated the data of 42.051 companies that submitted their financial situation for 2018 (as of September 2019) and generated a consolidated turnover of RON 71.96 billion. The weight of the cumulative market share held by the most important 10 players is 61%, which indicates a medium to high degree of concentration.

    The share in the total turnover of the top 10% companies in the sector remained at a high level (89.1% in 2014, in 2018 reaching the value of 89.4%). Thus, the sector is highly polarized, with some large companies generating a high share in the turnover and many small companies contributing less to the total revenues.

    The companies operating in this sector registered a current liquidity of 0.94 during 2018, the working capital being exposed to negative shocks, in a context of volatility (lower revenues or non-collection of receivables). The average duration of debt collection in the analyzed sector decreased from 29 days, the level registered in 2014, to 17 days in 2018, while the national level for the same period decreased from 104 days to 90 days.

    The largest number of companies operating in this sector are located in Bucharest ~ 9% of the total, generating the highest turnover ~ RON 35 billion (49% of the total). After Bucharest, Timiș and Ilfov contribute with 9%, respectively 8% in the total turnover and 3% in the number of companies.

  • Coniq raises £6.4 million to accelerate business growth

    Coniq raises £6.4 million to accelerate business growth

    Coniq announced it has secured £6.4 million of growth equity to meet the growing demand for its award-winning CRM and loyalty platform used by the world’s leading shopping malls, outlets and brands.

    The round was led by Guinness Asset Management with Maven Capital Partners, and participation from existing investors Venrex Investment Management. High profile angel investors, including Greg Marsh the founder of OneFineStay, also invested as part of this round.

    Coniq’s iQ Platform simplifies launching shopper engagement

    Coniq’s market-leading iQ Platform radically simplifies launching shopper engagement and loyalty programmes. This enables marketers to effectively and quickly increase sales by leveraging proprietary customer loyalty data, to understand and anticipate the purchasing behaviour and intent of shoppers. 

    Coniq powers over £1 billion of sales annually for its customers, with more than 17 million consumers in 24 countries globally relying on the Coniq iQ Platform to benefit from rewards and experiences from retail destination landlords and their tenants.

    Coniq’s technology helps its clients to build rich relationships with their customers, delivering an average increase in sales per customer by 32%.

    Coniq will use the investment to accelerate its technical development, including additional AI-driven product capabilities to automate customer loyalty activities; hiring marketing, sales and client success professionals, and expand internationally with new offices in Chicago, Warsaw and Barcelona.

    The fast-growing global customer loyalty management market is expected to be worth $7 billion by 2023 and is driven by retailer destinations seeking to win and retain customers. 

  • 2019 will bring 900.000 square meters of new modern spaces to the market

    The real estate development activity could double in 2019 compared to 2018, if all the projects scheduled for this year will be completed, the data shows JLL Bucharest City Report.

    According to the data announced by the developers, over 900,000 square meters of modern spaces would be completed this year, of which about half represent industrial and logistics projects.

    The stock of industrial and logistics in Romania will thus rise to 4.2 – 4.25 million sqm, an increase of over 10% compared to 2018. At mid-year, the stock exceeded the threshold of 4 million sqm, of which over 2 million square meters, is in Bucharest.

    The development activity in this sector is encouraged by the evolution of the demand of the last three years, between 2016 and June 2019 being contracted over 1.7 million square meters of industrial and logistics spaces. For comparison, between 2011 and 2015, about 1.2 million square meters of industrial and logistic spaces were rented in Romania.

    For the whole of 2019, approximately 400,000 square meters of industrial and logistic spaces are expected to be completed. However, considering that 180,700 square meters have already been delivered in the first half of the year and almost 230,000 square meters are under construction, the deliveries will be more than 400,000 square meters initially estimated.

    Due to the strong demand and the very low weight of speculative projects, the unemployment rate remained at 6%.

    Double deliveries on Bucharest office market

    On the Bucharest office market, 2019 will be a record year in terms of new deliveries, the announced volume being 333,500 sqm, more than double the projects completed in 2018.

    Although there were strong new deliveries both in Q2 and Q1 vacancy decreased slightly form roughly 8 in Q 1 to 7.5% at the end of Q2. This is because by the time the buildings were delivered they had 80% to 90% occupancy, or even 100% in some cases, such as Renault Bucharest Connected and The Mark. Therefore, the new buildings did not add up much to the overall vacancy rate.

    On the other hand, demand was also strong during the first half and there were almost no major relocations in the market during this period, except for Renault, who moved from Pipera North to the western part of the city in the new project Renault Bucharest Connected, build on demand.

    The office stock in Bucharest was estimated at over 2.84 million sqm at the end of June, and by the end of the year it will approach the threshold of 3 million square meters.

    Over 150,000 sqm is expected to be delivered in H2. Therefore, the vacancy rate might slightly increase to around 8%. However, even though at the end of Q2 the projects under construction, to be delivered in H2 had a pre-lease rate of roughly 40% on average, with significant differences from case to case, considering that there are several large transactions pending, if those will be concluded in time, the occupancy rate will also go much higher by the time the buildings will be completed. Therefore, new deliveries are not expected to add much to the overall vacancy rate in H2.

    The lack of new retail projects will be compensated for in the second part of the year

    Following the same trend as in Q 1 there were no new major shopping centers or retail parks delivered in Q2 2019. However, during the period, NEPI Rockcastle finished the new 10,000 sqm expansion of Shopping City Sibiu

    Almost all major deliveries for 2019 will concentrate in the second half, with close to 166,000 sqm expected to be completed, compensating for the lack of new projects during the first half of the year.

    2019 will be characterized by a considerable number of extensions and to a lesser extent by new projects.

    The largest new project expected to be delivered by the end of this year is Festival Shopping Center in Sibiu. The 42.200 sqm shopping center is developed by NEPI Rockcastle, the largest shopping center developer and owner in Romania. In Bucharest, there are no new shopping centers to be delivered this year.

  • The modern retail stock in Bucharest is higher than in Transylvania

    The modern retail stock in Bucharest remained stable in 2018, at 1.2 million square meters, a level which is 7% higher than in the Central-West region of the country (16 counties in Transylvania and Banat areas), which reached 1.18 million square meters, and twice the corresponding value of the Moldova region (eight counties), which reached 595,000 square meters, according to the Bucharest Retail Market and Romania Retail Regional Cities reports released by the Cushman & Wakefield Echinox real estate consultancy firm.

    Another analyzed region is the South one (16 counties, excluding Bucharest – Ilfov), where the modern retail stock is of 735,000 square meters, therefore the total area of ​​all the retail projects (shopping centers, retail parks and commercial galleries) at the national level is situated at 3.71 million square meters, resulting in a density of 191 square meters / 1,000 inhabitants.

    If we take into account the projects currently under construction, we expect the deliveries of commercial spaces to accelerate this year up to 140,000 square meters, as Sibiu, Timisoara and Bucharest will attract a 70% share of these deliveries. The Festival Centrum shopping center and the extension of Shopping City Sibiu will be delivered in Sibiu, the Iulius Mall project will be expanded in Timisoara, while the extensions of the Colosseum Retail Park and Veranda Mall projects are expected in Bucharest. New modern retail spaces will also be delivered in Zalau, where the Zalau Value Center project is due to be inaugurated, and also in Satu Mare and Buzau, where two existing projects will be extended.

    In 2019, the most active developers will be NEPI Rockcastle, Iulius Group and Prime Kapital, three of the most important developers and owners of commercial spaces on the local market.

    Last year, new retail projects with a cumulative area of ​​approximately 104,000 square meters have been delivered in Romania, with no new retail project being completed in Bucharest.

    At a city-based level, the highest retail space density can be found in Suceava (1,167 sq m / 1,000 inhabitants) and Oradea (1,014 sq m / 1,000 inhabitants), while in the primary cities with a population of over 250,000 inhabitants, this indicator varies between 380 sqm / 1,000 inhabitants in Craiova and 692 sq m / 1,000 inhabitants in Timisoara.

    The average vacancy rate for shopping centers in Bucharest declined from 3% to 2% over the past year, while at a regional level this value is situated at around 4% in the Southern and Eastern areas and 6% in the Central-Western part of the country. It is thus expected that the low vacancy rates within the dominant shopping centers will put pressure on rent levels.