Is there potential for the expansion of premium outlet centres in South East Europe?
- Ken Gunn
- Jun 3
- 6 min read
This question was the subject of a panel discussion at the REPEX conference in Sarajevo, 09/10 April 2025.
The session was led by Reinhard Winewarter of Across Magazine and fellow participants included Philip Jelden of PVH Corp, Giles Membrey of Rioja Estates and Thomas Reichenauer of Retail Outlet Shopping.
The wide ranging discussion included brand ownership, investment, operational practice, economic growth, consumer demand and political stability.
Ken Gunn Consulting presented a brief spatial assessment of the regional opportunity and the review below provides additional information.
Key findings
South East Europe accounts for 8% of European demand but 4% of existing outlet floorspace
Romania and Slovenia have greater per capita disposable incomes than Portugal, which hosts three premium and two standard outlet destinations
Reaching Europe’s average outlet provision would double existing outlet floorspace. The region has headroom for an additional 150,000 sqm or eight new outlet centres
Substantial opportunities exist near Ljubljana, Rijeka, Sofia, Split, Tirana and Varna. There is also scope to develop appropriate outlet concepts in smaller markets such as Cluj, Podgorica, Prestina, Sarajevo or Skopje
There are currently just two premium outlet centres in South East Europe (One Salonica and Athens Designer Outlet)
Capacity exists for an additional 105,000 sqm of premium (Tier 1, 2 & 3) floorspace (c 5 new sites)
Premium outlet centres require sustained investment, superior design, excellent placemaking, high quality brands and best in class management practices. They also require greater resident and tourist demand than standard outlet centres
The leading opportunities for premium outlet centres are focussed in Belgrade, Bucharest and Zagreb, where established outlet centres exist, plus Ljubljana, Rijeka, Sofia, Split, Tirana and Varna
Appropriate investment will improve brand demand, sales densities and asset values, creating the foundation for a new generation of outlet destinations in South East Europe
There are 210 major outlet centres in Europe in 2025. Differences in brand line-up, retail mix, site maturity, design and operational approach have produced a clear hierarchy of trading performance. At the top of this hierarchy, seventy-eight leading or ‘premium’ outlet centres fall within Tiers 1, 2 and 3, shown on the map below. These deliver 71% of turnover from 46% of European floorspace.
The map shows a clear gap in the presence and quality of outlet centres in South Eastern Europe. However, with the recent expansion of Fashion House Pallady, the opening of Sofia Village in 2025, the extension of Designer Outlet Croatia in 2025 and the proposed opening of Slovenia Fashion Outlet in 2026, the outlet community is beginning to respond to a substantial regional opportunity.
European Outlet Centres, 2025: Performance hierarchy
South East Europe comprises twelve countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Kosovo, Montenegro, North Macedonia, Romania, Serbia, Slovenia and European Turkey. These have a total population of 71 million in 2023 and attracted c109 million overnight tourists in 2019.
There are ten established outlet centres with total floorspace gross lettable area (GLA) of 176,600sqm, extending from Roses Designer Outlet in Croatia to Athens Designer Outlet in Greece. In addition, there are eight established outlets totalling 265,500sqm, mainly serving Istanbul, in European Turkey. These are generally poor quality, clearance centres, and have been ignored for the purposes of understanding opportunities for the traditional outlet format.
Excluding European Turkey, South East Europe accounts for 8% of European outlet demand but 4% of outlet GLA, suggesting capacity for additional floorspace.
Outlet provision is sometimes expressed by unfamiliar commentators in terms of floorspace per capita. However, given the disproportionate contribution tourists make to turnover, it is essential to include these in any assessment of capacity. Europe has an average of 2 sqm of outlet floorspace for every 1,000 residents and overnight tourists while South East Europe has 1 sqm of outlet floorspace for the same demand. This suggests theoretical capacity for 310,000 sqm, double the existing provision. Based upon the typical European outlet centre, this is the equivalent of eight additional sites.
South East Europe: Residents and tourists within 90 minutes drive
The map above shows the total volume of residents and tourists that can be reached within 90 minute’s drive of every postcode sector (c13,000 in total) in South East Europe. This highlights where demand based opportunities for outlet centres are likely to be strongest. Some areas such as Athens, Belgrade, Bucharest and Zagreb already have established outlet centres but Ljubljana, Rijeka, Sofia, Split and Varna do not.
The map below compares demand with existing provision to more accurately suggest scope for additional outlet floorspace (GLA). Having accounted for established locations where demand is broadly satisfied, substantial opportunities for additional floorspace exist near Ljubljana, Rijeka, Sofia, Split, Tirana and Varna. Outlet performance can be amplified using visit multipliers, for example in mixed-use development or adjacent footfall generators. With the right location, masterplan and design, this means that there is also realistic scope to develop appropriate outlet concepts in smaller markets such as Cluj, Podgorica, Prestina, Sarajevo or Skopje.
South East Europe: Opportunities for additional outlet floorspace
In other regions where the outlet segment is more mature, provision has evolved into a sophisticated hierarchy of five performance tiers, which reflects design, brand mix and operational quality. As the outlet community in South East Europe expands and matures, it is likely that this hierarchy will emerge, creating opportunities for substantial growth in average sales densities at premium sites.
Currently there are just two premium outlet centres in South East Europe (Athens DO and One Salonica), with a one thousand km geographical gap between northern Greece and north-east Italy. However, assuming typical European levels of Tier 1, 2 & 3 floorspace, there is sufficient capacity to allow the development of an additional 105,000sqm of premium floorspace or approximately five new sites. While this may sound ambitious, Montenegro, Romania and Slovenia already have greater per capita disposable incomes than Portugal which hosts two Tier 2, one Tier 3 and two Tier 4 outlet destinations. In addition, Albania, Kosovo, Montenegro, North Macedonia, Serbia and Turkey are negotiating for EU membership. The benefits of infrastructure investments and political stability will accelerate economic growth, brand investment and tourism across the entire region, amplifying the opportunity to create new and enhanced outlet experiences.
Premium outlet centres require high quality design and locations, with demand typically exceeding five million residents and tourists within 90 minutes. Existing outlet centres in South East Europe average four million residents and tourists within 90 minutes, so the potential choice of suitable locations for the development of premium outlet centres is focussed on those areas with the largest accessible markets.
South East Europe: Opportunities for additional premium (Tier 1, 2 & 3) outlet floorspace
The above map compares demand with the existing provision of premium outlet centres to highlight those areas with scope for additional floorspace. This suggests that some established sites such as DO Croatia and Fashion House Pallady have substantial demand which may allow them to evolve into premium outlet centres over time (assuming appropriate environments, brand demand and operational management). However, where existing outlet centres are not suitable for upgrade, the hierarchy will support the complimentary development of appropriate sites. Knowledgeable developers will always seek to exploit opportunities where established provision is not aligned with demand, so investors must plan for the opportunities and threats posed by asset catchments.
Additional opportunities to create new premium outlet centres exist in parts of the region where outlet centres have yet to establish but where demand, particularly from tourists, is substantial. Potential locations include Ljubljana, Rijeka, Split and Tirane.
While Europe’s outlet sector is agile, innovative and entrepreneurial, political instability, inconsistent business regimes, sparse populations and distributor-led markets, have caused South East Europe to be overlooked as a market for outlet centre development for three decades. However, European Union integration, growing disposable incomes and tourism growth is fuelling outlet expansion in Bulgaria, Croatia, Romania and Slovenia, highlighting that the region is both under served and deserving of higher quality, premium outlet destinations. With appropriate investment, South East Europe is likely to experience significant improvements in brand demand, trading performance and asset values and a new generation of outlet destinations.
About Ken Gunn Consulting
Ken Gunn Consulting Limited provides strategic business advice to the global outlet industry. Located in the United Kingdom, Ken Gunn Consulting has nearly 30 years experience, spanning 35 countries, 250 outlet projects and more than 4.5 million square metres of outlet floorspace. We provide evidence based, independent consultancy advice to support investment, development and income growth decisions at Europe’s leading developers, operators, investors and brands.
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