PMR report: Shopping centre development heating up in Romania and Bulgaria. Poland still attractive
Central Europe is experiencing a boom on the shopping centre market, and this situation will continue in the next few years. According to the PMR report “Shopping Centres in Central Europe” , Romania and Poland will add the most substantial amount of shopping centre space in 2008-2009, 1.5 m m² and 1.1 m m² respectively. At the same time, these countries also hold the largest shares as a proportion of the overall amount to be invested in shopping centres launched during the years in question. Whereas, according to PMR, in total, Central Europe is to see €3bn invested in schemes opened in 2008, Romania alone will account for €1.2bn (40% of the total amount for Central Europe). In 2009 shopping centres worth €2bn are due to open in the country.
Because of underdevelopment and small bases, Slovakia and Bulgaria, where much less new GLA will be added in absolute values (some 0.5 m m² in total will be added in each of those countries between 2008 and 2009), are expected to see significant year-on-year growth in both GLA supply and the amounts invested. For Bulgaria this would mean that shopping centre GLA would grow by more than 350% between the end of 2009 and the end of 2007. Shopping centres due to open in the two countries in 2009 are expected to be worth 600% more than a year before in Bulgaria and close to 800% in Slovakia.
GLA on the rise across the entire region
According to the PMR report, combined space to let in shopping centres in Central Europe came to 7m m² at the end of 2007, and by the end of 2009 the market will see growth of 60% to more than 11m m². This is being prompted mainly by rising incomes in the Central European countries in addition to improving retail sales and very strong demand for retail space.
Poland is the most developed country in terms of shopping centre GLA. In 2007, it accounted for 50% of total shopping centre supply in the region, and was followed by the Czech Republic (16%), Hungary (15%), Romania (10%) and Slovakia (7%). Bulgaria with only seven malls in operation at the end of 2007, brought up the rear with a 2% share. However, according to Malgorzata Machnicka, Head Retail Analyst at PMR, with regard to the booming markets, particularly those of Romania and Bulgaria, this pattern will soon change, with Romania taking second position in terms of GLA in Central Europe in the very near future. “Romania is rapidly making up for lost time and is already witnessing development of larger and more complex projects,” she adds. It is worthy of note that average shopping centre GLA in operation in Romania (some 37,000 m²) exceeds that of the overall region (30,680 m²).
However, Romania is still significantly underdeveloped. According to PMR, the average shopping centre GLA/1,000 inhabitants in Central Europe – 76 m² in 2007 – was exceeded only by the Czech Republic, Hungary and Poland. Bulgaria (16 m²/1,000 inhabitants), Romania (33 m²) and Slovakia (87 m²) were lagging behind. Of the capitals in the region Warsaw took pride of place with almost 600 m² of GLA per 1,000 inhabitants and was followed by Prague and Bratislava.
It is worthy of note that, whereas large cities in Poland, Hungary and the Czech Republic are gradually reaching saturation, this does not make these countries less attractive for the construction of shopping centres. There is still a substantial amount of space in medium-sized towns of 100,000 people, particularly in Poland. At the same time, shopping centres developed in the largest cities are becoming more central or more extensively developed. The fourth generation of shopping centres, which includes office and hotel buildings, has appeared recently in Poland (Zlote Tarasy in Warsaw and Manufaktura in Lodz, the largest shopping centre in the Central European region). Interestingly, the Polish market is soon expected to see the appearance of a fifth generation of shopping centres, which will be accompanied by residential areas, schools, kindergartens, etc.
More on the way
The construction of shopping centres is set to continue apace in the region. By the end of 2011, taking into account projects announced for construction in mid-2008 and to be completed by the end of 2011, there will be some 450 shopping malls in operation in Central Europe, according to PMR. Romania alone would account for 80, an increase in comparison with 20 at the end of 2007. Pipeline projects in the country include three malls with GLA in excess of 110,000 m². All of these will be located in the capital and will, after completion, become the largest in the region, overtaking Poland’s Manufaktura and Arkadia.
More information on the report:
tel. /48/ 12 618 90 20
PMR (www.pmrcorporate.com) is a publishing (www.pmrpublications.com), consulting (www.pmrconsulting.com) and market research (www.research-pmr.com) company providing information, advice and services to international businesses interested in Central and Eastern Europe. With highly skilled staff, top ranked web sites and over ten years of experience, PMR is one of the largest companies of its type in the region.
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