Florentin Avadanei, Founder & co-CEO at Goldbach Group talked at reFocus 2025, second panel, about a new line of business for retail developers: street mall in rural areas. Romania’s rural areas have so far been bypassed by big developers, as purchasing power is not as high as in cities. But the rise in living standards, which is also being felt in rural areas, means that the potential here is huge, and the Goldbach Group decided not to miss the opportunity.

”The year 2024 for Goldbach was a year of consolidation and business crystallization. We started developing retail spaces since 2012, for Kaufland, Lidl, Penny. And we noticed, over time, the end customer behavior and opportunities. That’s why we decided to develop our own portfolio of spaces. And last year we finalized the process of acquiring a portfolio of eight locations and developed the first project, K2, in Rasnov. Today, we have 14,000 square meters in operation, all the spaces are rented, and we will reach 18,000 square meters by summer. We have spaces in design and construction that will take us to 40,000 sqm by the end of 2026. Our advantage is that we have everything we need to develop projects in-house. Our brand is K2, this is where we will invest more in the coming years, we have investments of 36 million euros underway. Goldbach Holding is following the core business and we want to reach 100,000 sqm GLA in coming years. 2024 was the year when we saw the first results from our spaces.”

The potential is huge in Romania. We are not looking at big cities, especially as 44% of the country lives in rural areas, which do not have easy access to modern retail spaces. That’s why we are targeting this area, to be able to gather between 25,000 and 40,000 inhabitants in a region for a retail center. And the potential is very high in this area for shoppers. We have to have reference projects in our portfolio that are also easy to trade, which is why we will also go to larger cities. Of course, not in Bucharest, but around Bcurestiului, we will launch in Berceni, where we will continue with the shopping malls. And purchasing power is quite high in the communes around the capital. In the country, the world is different from big cities, and people look very carefully at money and prices.

Sustainability and the implementation of sustainability criteria are already mandatory for most companies. But the implementation of these criteria also brings benefits, not just cost-cutting: reduced operating costs, and operating costs are very important for tenants.

”When we talk about sustainability, we also look at the cost side. If they are mandatory, they have to be implemented anyway, but we try to be optimistic. Having a design company within the group, we implement these requirements from the design phase. But that also brings us lower operating costs later on. We are however supportive of sustainability elements, not least because environmental impact is no longer a story, but has clear effects today. Climate change is real, even if it still comes down to money and many give back. Specifically, if funding will be favored or blocked if there are no ESG elements in projects, it is clear that everyone will implement them. Including tenants are demanding lower operating constants, especially with us, we have more discounters in our portfolio.”

”We have started in December 2024 a process of ESG implementation in the company, we will have a sustainability strategy, and next year we will have the first report on this topic.”

As street mall developers, we are looking optimistically at what has happened in the last couple of years, with the return to physical stores. Even though the pandemic has forced us to do things differently, people want to socialize, which we are seeing in the office market, where people are increasingly coming back to the office, even in companies that have supported the idea of working from home.