Kalina Ivanova, Commercial Director at Park Lane Developments, explains why retail parks are proving to be more resilient than malls during the current energy crisis.

While global energy prices continue to surge amid ongoing geopolitical tensions, one of the key questions facing the retail industry is how will retail properties adapt.

These challenges are expected to be among the key topics discussed at the upcoming REPEX Retail & Property Expo in Sarajevo, where retail experts from across Southeast Europe will gather to address the sector’s most pressing trends and risks.

Among its key visitors will be Kalina Ivanova, Commercial Director at Park Lane Developments.

As Park Lane Developments is currently developing several retail parks across Bulgaria, we asked Kalina to share her market insights ahead of REPEX.

Last year, you announced plans to develop 10 retail parks across Bulgaria. How has that pipeline progressed, and where do you stand today?

Since last year, the pipeline has progressed significantly.

We remain committed to our strategic goal of developing a modern, convenience-oriented, food-anchored, and BREEAM-certified portfolio of retail parks across Bulgaria and Romania.

The retail parks will operate under the ESTREA PARK brand, which we are developing with our investment partners, the Belgian fund Mitiska REIM and the EBRD.

We have already secured four land plots in Bulgaria, and several more are currently underway. Our focus regarding land acquisitions is on locations where there is a clear need for modern retail concepts, and we are also exploring opportunities to acquire existing projects to accelerate our growth.

Our first retail park, located in Sofia’s Hadzhi Dimitar residential district, is scheduled to welcome customers in autumn 2026. It is positioned next to an existing, well-performing Kaufland store, and Lidl will be a key tenant within our development. Having two strong supermarket operators in one location is a significant advantage, as they are powerful traffic generators that create a solid base for the overall tenant mix.

The first project will offer more than 13,500 sq m of GLA across two levels, and will house more than 20 established brands. It will also provide ample parking, electric vehicle charging stations, and bicycle racks — all of which reflect our broader vision of creating modern, accessible, and sustainable retail destinations tailored to everyday customer needs.

We are also preparing to start construction of two more retail parks this year — one in Sofia, in the Nadezhda residential district, and one in Varna, in the Vladislav Varnenchik residential district. Both are expected to open in 2027.

As for the fourth Estrea Park, more details will follow in due course, with the opening currently anticipated for early 2028.

In the current environment of rising costs and energy pressure, do you see retail parks having an advantage over traditional malls?

We continue to see retail parks as one of the most resilient retail formats, especially in a climate of rising energy costs.

Their strength lies in efficiency compared to traditional shopping centers. Retail parks are simpler and faster to build, less expensive to operate, and less energy-intensive to maintain.

This was clearly demonstrated during COVID, when retail parks across Europe generally outperformed enclosed shopping malls, thanks to their open-air format, convenience, and focus on essential retail. In many markets, retail park footfall and sales declined less and recovered faster. Also, for tenants, retail parks are known to offer a more efficient cost structure and a highly functional trading environment.

Overall, while each project must be assessed individually, retail parks remain a highly resilient and relevant format in today’s market.

How are retailers adapting their expansion strategies today? 

In practice, we are seeing more brands traditionally associated with malls actively expanding into retail parks.

Some already operate in this format and are achieving strong results, while others, encouraged by their competitors’ performance, are preparing to open their first stores in an open-air retail environment as a way to test out the concept. This trend has so far been more typical among local companies, but we are now seeing growing interest from established international brands.

Another very positive sign is that traditional retail park tenants are expanding and actively looking for new locations. This trend is also linked to the fact that Bulgaria is still in a phase of active development, with new projects attracting tenants to cities that still lack modern retail concepts. The combination of new supply, low vacancy, and stable-to-rising rents suggests that the market continues to absorb new retail space relatively well.

This shift is also closely connected to the omnichannel trend of modern retail.

In the digital era, physical stores are no longer just points of sale. They are part of a broader customer journey that includes online visibility, click-and-collect, returns, convenience, and overall brand presence. Retailers confirm that a strong online presence drives footfall to physical stores, while new store openings help boost online sales.

In other words, the most successful retailers are no longer thinking in terms of online versus offline. Instead, they are building integrated omnichannel strategies, which increasingly shape the locations and formats they choose.

Are you seeing any changes in lease structures, with agreements becoming more partnership-oriented?

From our perspective, a lease must work for both sides.

As landlords, we naturally focus on protecting the long-term value of the asset, but we also understand that our tenants need the right conditions to trade successfully and grow. In that sense, the most effective lease structures today are not about maximizing short-term advantage for either party, but about enabling both landlords and tenants to perform successfully over the long term.

In the current environment, both sides are taking a pragmatic approach. Tenants are understandably focused on occupancy costs and fit-out efficiency, while landlords are closely monitoring tenant performance, retention, and the overall strength of the tenant mix. As a result, lease discussions are becoming more tailored and increasingly collaborative.

I also believe that energy efficiency and ESG considerations are reinforcing this trend.

Today, landlords and tenants need to work more closely together on technical standards, fit-out solutions, and overall building performance, which naturally leads to a more partnership-oriented relationship.

Have there been noticeable shifts in rental levels and service charges in the current market environment?

In terms of rent, well-located and top-performing retail projects continue to show resilience.

The strongest locations are keeping their rental levels stable, while some have even increased their rents due to limited supply, indexation, and continued tenant demand.

Service charges are natually rising, driven by higher energy, maintenance, and operating costs. As a result, tenants are increasingly focused on total occupancy costs, not just base rent. This is making asset quality and operational efficiency more critical than ever.

Projects that can offer strong trading performance together with efficient operating costs are in a much better position.

Which tenant categories do you expect to be the main foot traffic drivers in retail parks going forward?

Retail categories that will perform the best in retail parks will be those that serve everyday needs — convenient, value-oriented brands with an omnichannel model.

Food anchors will remain the single most important tenants. Grocery-led footfall is the backbone of the most successful retail parks, and it remains a relatively resilient category even in a cost-conscious consumer environment.

I expect the other main foot traffic drivers in retail parks to be discounters, health and beauty brands, and services.

One of the major trends in malls is their transformation into community-focused destinations. How can retail parks evolve in this direction?

Retail parks have traditionally been defined by convenience and functionality, and that remains one of their core strengths.

However, the most successful projects are, and will be, those that combine convenience with a stronger sense of community relevance.

We also see strong potential in organizing events within retail parks that bring people together and strengthen connections with the local community. This includes seasonal events, family-oriented activities, tenant campaigns, and other initiatives that make retail parks more dynamic and engaging.

These initiatives can help transform a purely functional destination into a place that people recognize and value as part of their everyday environment.

What key trends do you expect to define the next phase of retail park development in the near future?

Bulgaria’s retail park sector is still in a growth phase rather than a fully mature one.

Supply is increasing quickly and is expected to overtake shopping malls in total leasable area by the end of 2026. The current pace of new openings shows that there is still strong potential for further expansion across the country.

A more mature phase will come once most key regional and secondary cities are covered. At that point, the focus will shift from building new projects to improving existing ones, strengthening tenant relationships, and managing portfolios more efficiently. The first signs of this shift may appear after 2028, with full market maturity likely toward the end of the decade.

I believe, success will depend more on the quality of location and the strength of the catchment area. The market is becoming more selective, meaning that prime, well-connected locations with strong everyday demand will continue to outperform.

Food-anchored and value-oriented retail parks will remain at the core of growth. Consumers are still focused on convenience, accessibility, and affordability — all key strengths of the retail park format.

Another important trend is omnichannel retail, with retailers increasingly choosing locations that fit smoothly into the broader customer journey.