Home truths

The boom in the residential sector and the increased earning power of the average Pole, who had been previously dreading the cost of furnishing his home, has forced retail developers to take a very close look at investing in specialized centres. It seems that Ikea, which has been the strongest player on the market so far, will now have to face stiffer competition. In addition to its Ikea showrooms, this Swedish consortium has been developing in more locations over the past few years by establishing retail parks. Ikea is presently operating in Warsaw (Janki and Targówek), Gdańsk (Matarnia), Wrocław (Bielany), Poznań (Franowo), Kraków and Katowice (Rawa).

Joanna Łozińska, the Ikea group’s press spokesperson, describes the current situation: “Ikea’s most important investments this year include the expansion of its outlet in Gdańsk by around 10,000 sqm, the building permit for which is expected this February. A second substantial investment will take place in Łódź, where a retail park is to be developed alongside the existing Ikea store. The documentation for this project is being drawn up, with work planned to begin in the second half of the year. Our projects in Targówek, Poznań and Wrocław will be the next to be enlarged.”

Rival neighbour

Competition to Ikea and Domoteka is now raising its head on the east side of the Vistula river. The Metropol Group is planning to develop a Metropol Dom i Wnętrze (Home and Interior) unit within the Metropol Park Jagiellońska warehouse and office complex. The developer had initially planned for an outlet, but the strong competition on this market ultimately led the firm to decide on an interior fittings and building materials centre with more than 18,000 sqm available for lease. The centre is scheduled to open this autumn.

According to Beata Kokeli, a member of the board of TK Polska Operations: “We took the decision to set up a retail park when we realized exactly how big the demand was. The Targówek and Białołęka districts are growing rapidly in terms of housing development, so it seemed natural that the districts’ new residents would be looking for good places to do their shopping. The Targówek centre, with its Carrefour hypermarket and large shopping mall, constitutes a powerful magnet attracting 7 to 8 million customers annually. Indeed, I am convinced that the ‘universal centre plus specialized centre’ model is an excellent idea.”

Emerging unscathed

Krzysztof Królak, the marketing director of TTW Opex, which specializes in bathrooms and kitchens, stresses that: “Our presence in Targówek is more defensive than aggressive. In my opinion, the centres which have existed for several years, together with the other new developments in this district, will constitute one huge complex. The companies present there are bound to emerge from the rivalry unscathed.”

His company presently owns three showrooms, apart from the location on ul. Bartycka: on ul. Domaniewska (4,500 sqm) and al. Jerozolimskie (7,500 sqm) in Warsaw and on ul. Roździeńskiego (10,000 sqm) in Katowice. The Katowice centre is to be expanded to around 17,500 sqm. But where will the company expand next? There were many proposals, including Fort Wola and Wola Park in Warsaw, but nothing specific has yet been decided.

 Paweł  Kępski, Galeria Gala managing director, explains: “The percentage of customers from beyond Poland’s eastern border who are interested in home furnishing goods and interior articles is increasing by the year. We estimate that after Galeria Gala opens, the proportion of customers from beyond the eastern border will rise to between 12 and 15 pct of the total number. Even today, 8 pct of customers who order interior furnishing products are Ukrainians, Belarussians and even Russians.

Beata Kokeli provided us with more details: “We already hold a building permit for around 40,000 sqm of retail space and are currently refining the concept for the centre, which will probably have four buildings – one of which will be a DIY outlet.” But in reply to a question over whether this is going to be the developer’s final investment, she asserted that: “Should we find an appropriate site, we will certainly not allow the opportunity to slip through our fingers to develop more specialized centres. We are convinced they represent sound business.”

 Some good advice

E&L’s plan is to develop small and medium sized centres between 5,000 and 20,000 sqm in area, depending on the location. Michał Włodarczyk emphasizes that: “In several of our centres there could also be a hypermarket, which could be entered from a car park or shopping gallery. It is also of great importance that tenants should operate under a well-known brand, which they will advertise and so attract customers to the centre as a whole.” In his opinion, customers need more time to get to know a specialized centre than a universal centre, which is why a retailer tenant should have sufficient finance to fall back on during the first difficult months of business.” Domoteka is an excellent example of a specialized centre, but how successful has it been since it first opened its doors?

According to Jakub Laskus, Almi Décor’s retail development manager: “Such centres are specific projects. They are not conducive to impulse-generated purchases, whereas our concept is addressed to customers who drop into a shop at a particular moment, have a look around and purchase something for the home.” There are 26 shops at present operating under the Almi Décor logo, only one of which is in the Domar centre in Wrocław, the head office of the Almi Désign team of architects. Jakub Laskus is not suggesting that Almi Décor will never find itself in an interior furnishings centre, but is clearly ruling this out in the immediate future, since the numbers of shoppers visiting specialized centres is much lower than in universal ones. Only time will tell whether the idea of specialized centres catches on and Polish punters are willing to start spending significant sums on furnishing their homes.