SHOPPING CENTRES DEVELOPMENT 2008 - 2009
Of a total of 250,000 sq m planned in 14 shopping centres, nine shopping centres with an overall floorspace of about 150,000 sq m were actually opened. The total area of this retail category in the Czech Republic has therefore exceeded 1,900,000 sq m. These figures are from statistics that Cushman & Wakefield, a real estate consultant, prepare on a regular basis.
“There have always been delays in the opening of shopping centres, whatever the reasons - technical, delays on the building site, or administrative reasons caused by delays in the obtaining of various permissions. The global financial crisis was an addition to this last year,” says Martin Zizala, head of the retail team at Cushman & Wakefield in Prague.
“It takes three to four years on average to plan and build a shopping centre. The centres that were planning to open in 2008 therefore obviously had their financing secured long before the crisis broke out. If the opening date has moved from the autumn of 2008 to the spring of 2009 for some projects, we can find the main reasons for this in the construction delays,” adds Zizala.
Czech Republic versus Europe
Measured by the floorspace of shopping centres in relation to the country’s population, the Czech Republic ranks just under the EU27 average (200 sq m per 1,000 pop.) with its 186 sq m per 1,000 pop. At the same time it exceeds these values in all Central and Eastern European countries. For example, at the end of last year Slovaks had only 137 sq m per 1,000 pop. of shopping space.
Key trends in 2008
The Vysocina Region was the last region that lacked a modern shopping centre of over 5,000 sq m. In the autumn the City Park Jihlava opened there, whereby the expansion of shopping centres into all Czech regions was completed.
The trend of the extension of large successful shopping centres (Nisa Liberec, Avion Ostrava) continues. The penetration of shopping centres to towns with a population of less than 70,000 (Kladno, Kolín, Most, and Jihlava) is also visible.
Expectations for 2009
“Today, there is virtually no Czech town with a population of more than 50,000 in which there is not a shopping centre, or where developers have not at least presented their plans to build a shopping centre there. For the time being, developers envisage the opening of new shopping centres with an overall area of approximately 110,000 sq m in 2009, which would be one of the lowest values since the introduction of this format in the Czech market in 1997,” says Alexander Rafajlovic, head of research at Cushman & Wakefield in Prague.
“The increasing diversification of shopping centres is also being confirmed. Large and successful shopping centres are strong enough to further expand; for example, Olympia Brno is evidence of this. In 2009 it will open its fourth phase,” adds Rafajlovic.
Retail parks (For the difference between a shopping centre and a retail park-see below)
Last year was marked by a record, particularly from the perspective of the development of retail parks. New construction exceeded 130,000 sq m, thereby increasing their overall floorspace to almost 550,000 sq m. Investors in this segment nurture even greater plans for next year; the development of up to 390,000 sq m has been announced. However, in view of the current market conditions not all projects can be expected to be completed on time.
Retail parks are cropping up in municipalities with a population of more than 15,000. They therefore offer a suitable alternative in places where a classic shopping mall cannot be built.
What we are facing in retail
The period of filling in the blank spots on the map is drawing to a close in the Czech Republic, and every additional centre will pose direct competition to another, usually a well-established project. The era of the development of new out-of-town shopping centres is also over; the current trends bring them into city centres. Large new projects will appear less and less frequently, and, if they do, then mainly in the form of the revitalisation of the existing space. We can continue to expect successful shopping centres to expand to include additional stages.
“After more than ten years of the development of shopping centres in the Czech Republic the market is entering the stage when a careful selection of the location, architectural design, ability to fit the project well within the environment, and, in particular, the mix of tenants are increasingly becoming the success factors. At the same time we can confirm that new retail brands continue to be interested in entering the Czech market,” adds Martin Zizala.
New shopping centres opened in 2008 (extensions not included)
| City | Shopping Centre | Size (sqm) |
| Prague | Arkady Pankrac | 38,000 |
| Jihlava | City Park Jihlava | 26,000 |
| Kladno | Centrum Oaza | 17,800 |
| Most | Central Most | 17,373 |
| Pardubice | Palac Pardubice | 16,000 |
| Zlin | Zlate Jablko | 12,500 |
| Prague | Galerie Fenix | 11,165 |
| Kolin | Futurum Kolin | 10,000 |
| TOTAL | 148,838 |
Source: Cushman & Wakefield, January 2009
Key shopping centres extensions in 2008
| City | Shopping Centre | Size (sqm) |
| Liberec | SC Nisa | 20,500 |
| Ostrava | City Park Jihlava | 20,500 |
| TOTAL | Avion | 41.000 |
Source: Cushman & Wakefield, January 2009
Definitions:
According to the ICSC (International Council of Shopping Centres) definition, in Czech circumstances a traditional shopping centre is understood to be a retail property that is operated as a single entity, with a minimum gross leasable area of 5,000 sq m and at least ten separate units. When talking about shopping centres, we most frequently mean a combination of a shopping gallery with an anchor tenant, most frequently a hypermarket or a larger supermarket.
A retail park can be defined as a development comprising three and more retail units within a single property with a total floorspace of about 5,000 sq m and more. A retail park always has a parking area, which is shared by all the operators in the park. Retail parks are usually purpose-built by a single developer using a uniform design. Classic retail parks include, for example, the AVION Park in Prague - Zličín and Retail Park Tesco in Hradec Králové. One type of the retail concept that sometimes resembles retail parks is the cluster – a group of at least three stand-alone units located close to one another. Each of them may have a different owner. Parking areas usually form a part of clusters; they are either shared or separate for each of the operators. Some examples are the commercial zones in Prague - Čestlice / Průhonice and in Prague at Černý Most.
Contact:
Jitka Kvartkova,
PR & Communicatons Manager
Cushman & Wakefield Czech & Slovakia
Tel.: +420 234 603 603, +420 603 113 168
Cushman & Wakefield is the world's largest privately held commercial real estate services firm. Founded in 1917, it has 227 offices in 59 countries and more than 15,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within four primary disciplines: Transaction Services, including tenant and landlord representation in office, industrial and retail real estate; Capital Markets, including property sales, investment management, valuation services, investment banking, debt and equity financing; Client Solutions, including integrated real estate strategies for large corporations and property owners, and Consulting Services, including business and real estate consulting. A recognized leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Center at www.cushmanwakefield.com.
The firm entered the Czech market in 1993 and employs 118 people in its Prague office.
