Bulgaria's Mecca of Malls Goes from Boom to Bust

Business | June 28, 2012, Thursday // 19:09|  views

The number of malls across Bulgaria is on the slide due to the global economic crisis and shrinking demand. Photos by Sofia Photo Agency

A raging economic slowdown and dwindling holiday crowds from Romania have hit hard the mallification ambitions of the Danube town of Ruse, northern Bulgaria.

Out of the seven separate new shopping malls initially planned, five got were under construction, but only three opened their doors to clients. Royal City Center, Mall Ruse and Mega Mall Ruse are still operating, but do not enjoy high occupancy rates.

The biggest project - the EUR 100 M Grand Plaza - was slated for completion in 2010 and was to boast a 90,000-square-meter, or 970,000-square-foot, mall; a 5,000-seat arena for sports and cultural events; a 115-room luxury hotel; and 11,000 square meters of offices.

The project however did not materialize as bricks and mortar since it was frozen due to lack of funding. The same fate has befallen Mall Danube and Mall Gallery Ruse.

Before 2007, Ruse was known for its faded glory, depopulation and rusting behemoths of Soviet-era heavy industry.

Following Bulgaria's accession to the European Union however the city of 175,000 saw a period of marked revitalization, fueled by a Romanian spending spree.

After the border between the two countries formally dissolved because of EU membership, a tidal wave of bargain-seeking Romanians crashed over northern Bulgaria.

The wave however has now receded due to a convergence of prices on both banks of the Danube, high fees for crossing the river and the devaluation of the leu.

Ruse is an example of developments on the retail market and the construction of malls in particular across Bulgaria.

The country ranked first in the European Union in the number of new shopping malls in the first half of the 2010, but now the number of malls is on the slide due to the global economic crisis and shrinking demand.

Some of the announced and planned projects have been delayed, while others may never make it off the drawing board.

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Tags: European Union, mallification, Romanians, Romania, danube, Ruse, Bulgaria, malls, Bulgarian


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