When retail becomes 'handel'

The first Polish shopping projects which appeared together with the free market could not be called real estate. Collapsible camping tables and beds, and popularly termed "jaws", i.e. steel market stalls, were regular sights. They, happily, have vanished but in those pioneering times for Polish retail trade, merchant associations were established which today are constructing modern properties.

One mall instead of 170 stalls

Manhattan shopping centre which opened in Gdańsk in early March, or rather its developer - a company of the same name, is an excellent example of such metamorphosis. GCH Manhattan was spawned in the early 1990s by the Zrzeszenie Prywatnego Handlu i Usług in Gdańsk which had leased a large square in the city's trading centre. There were once 170 small outlets in the square, while today there is an eight-storey shopping centre (three underground storeys) with a total space of 53,000 sqm and 23,000 sqm rental space. Manhattan holds 120 shops occupied by local retailers but also by such brands as Reserved, Hennes & Mauritz and Albert. The local nature of the project is highlighted by such outlets as the Centrum Handlu Bursztynem on the third floor, where offices, agencies and shops run by amber dealers will be situated. A sports club owned by champion boxer Dariusz Michalczewski, a company partner, is to be opened one floor up. The Manhattan had to be opened with some haste, the investors being obliged to deliver the building on a specific date, which is why some of the shops have not yet been opened. That apart, only a very small part of the shopping space is still vacant. Were it not for the Avans company withdrawing its presence (1,500 sqm) the whole area would have been rented when the centre was opened - remarked Waldemar Banasik, GCH Manhattan Marketing Manager. Manhattan cost 135 million zlotys to construct, most of which (98 million) came from a Pekao S.A. bank loan. Hydrobudowa was the general contractor. Leasing process was managed first by the Ober-Haus agency, then by Lambert Smith Hampton and presently by the landlord company itself.

Not only shopkeepers

There are many more such modern shopping centres which were established on merchant initiatives, to mention but Kupiec Poznański (Poznań Trader) and the Gdynia-based Batory department store. But Polish developers do not have their roots only in such environments. One could point to the Poznań "Stary Browar" (Old Brewery) financed by capital from Jan Kulczyk, Poland's richest person. The same thing happened to "Stara Papiernia" (Old Paper Mill) in Konstancin near Warsaw where Jan Wejchert of ITI media giant injected capital to its construction. Hossa - the TriCity housing developer - was unable to sell a site in Gdańsk city centre, which led him to construct the Madison Park Shopping Centre on it instead. Szymon Łukasik of Jones Lang LaSalle Retail Department claims that "companies with surplus finance often invest in real estate. It also sometimes happens that a company becomes the owner of an attractive site and prefers to develop it by himself. In other cases a couple of persons with money and a good idea just get together". It seems that the Sfera shopping centre in Bielsko-Biała was created in that way.

Going it alone

When Ireneusz Hendel, Head of Bielsko Business Centre, landlord of Bielsko Sfera, was asked why he decided to develop his own shopping centre, he replied with a smile: "For the money". That was a wholly natural motive, but several other reasons emerged when talking to him, less rational but also worth respect: to design something attractive and display that you do not have to be part of a western consortium to create a fine shopping centre. The Bielsko Sfera is an entertainment-shopping centre, a third-generation project. It was opened in December 2001, with 38,000 sqm rental space. The Sfera includes an Albert supermarket and 120 shops in the shopping gallery, also seven restaurants, a seven-hall multiplex cinema and a sports club. Part of the space is designated for offices and also a fitness club. The property's owner claim that it has some 1 million customers every month. Let it be noted at this point that the city's population is around 185,000. Both Ireneusz Hendel and Szymon Łukasik of JLL who is not engaged in leasing the centre, speak with one voice in remarking that Sfera has recorded a great success in becoming a place where Bielsko citizens like to meet.

Guided by a local spirit

A major headache for Polish developers is credibility among banks and collaborators, and also insufficient experience. Ireneusz Hendel admits that experience comes with time but you must be credible from the outset. He clearly was referring to his reliability which led Raiffeisen Bank to decide to finance the construction of Sfera. Several essential elements of the developer process, e.g. architecture, give Polish companies an equal start with foreign firms. When foreign companies develop shopping centres in Poland, they bring along "off the peg" projects - remarked the head of the Bielsko Business Centre who cooperated as an architect with a German shopping space developer. Such projects, he claimed, can be neither attractive nor functional since they were created without real knowledge of the place where they were to appear. Foreign developers have an allergic reaction to any suggestion of amendments to their projects, according to the principle: "why change something that functions".

Spreading outwards?

The Sfera shopping centre is the first successful investment of the Ireneusz Hendel, Janusz Grajewski and Marek Lesiński. Since this was not the outcome of their personal links with Bielsko-Biała, its owners do not exclude constructing shopping galleries in other cities. Hendel admitted: "We see no reason to rest on our laurels". Should these plans reach fruition, another Polish national chain of modern shopping centres could appear (Echo Investments owns two such projects).