Coffee dominates

Statistics suggest that operators of Coffeeheaven, Café Nescafé, Tchibo Coffee Bar and others have already opened at least 100 modern cafés in Poland in a large variety of localities where they have clearly won a large devotee following. Building owners are phoning to propose renting properties. But that is far from suggesting that cafés are treated favourably by developers.

Cafés with a tempting image...

You enter a café and order a coffee when you feel the urge, and that means coffee bars should be situated on the busiest streets in a city, to provoke the greatest number of "urges" - at least that is what you are told by agents searching for a place to run such a business. In Warsaw that means the surroundings of the intersection of Marszałkowska Street with Jerozolimskie Avenue, Chmielna and Now Świat Streets, the Old Town in Kraków and the surroundings of the Market Square and Świdnicka Street in Wrocław. Piotr Stempke of Ober-Haus Real Estates who looked for places where Daily Café outlets could be opened remarked: "The important thing for a café is a large display window and entry from the street. And in the summer a place should be available in front for a garden with tables and chairs". He sets the optimum space for a café at around 120 sqm, but a proprietor might agree to a smaller place if it is situated in a particularly attractive spot. The smallest Daily Café outlets are only 50 sqm in size. Most Coffeheaven cafés are pf 60 to 80 sqm. The largest are in the Sadyba shopping centre and the two-storey café in Wrocław and also on Nowy Świat in Warsaw. Nescafé Café Bars are from 20 to 120 sqm in size, the largest being in Kraków's Szewska Street which is all of 140 sq.m. The cost of furnishing a Coffeeheaven bar per sqm is similar, regardless of situation but the head of CHI Polska did not want to divulge the amount, which should ensure the expenses are returned after 80 to 100 weeks of work. Radosław Drabik of Café Nescafé told us that, depending on size, the cost of adapting and furnishing a cafe oscillates between 150,000 and 300,000 PLN

... and without

The predominant opinion among café chain bosses is positive as regards situating them in shopping centres. But Piotr Stempke thinks there is no sense in opening bars in old projects boasting only a hypermarket and a few shops on a gallery. A customer in such centres thinks only of getting back home after shopping and not about having a coffee. Radosław Drabik, Nestlé Polska channel marketing manager responsible for 15 Café Nescafé bars, remarks that "a relatively small number of our bars operate in shopping centres, but I must admit that they are highly profitable".

Library, railway station, office building

The Polish Coffeeheaven chain has 18 and a half cafes. Michael Ovadenko, Managing Director of CHI Polska, which owns the brand, smilingly explains that the half café is that in the reception premises of the office building where his firm has its central office. The remaining eighteen are situated all over the place: part on major streets, a number in shopping centres and some in office buildings. Our best bars - he informs - include the one in the Central Railway Station and that in the Warsaw University Library. In his opinion there is no single recipe to discover an ideal place for a café. The firm sometimes employs agents, he admits, but claims he much prefers to negotiate rents "at the source". Michael Ovadenko claims that direct talks with the owner of an outlet are always more concrete. The same is true of the Café Nescafé chain, whose managers state that they employ agencies only "sporadically", preferring direct contacts with the property owner.

Crazy prices

The claim that the size of a chain and the popularity of the marks can lead to low rentals is quite untrue. Michael Ovadenko smiles and scowls in turns when describing rent negotiations He elaborates: "I feel some developers are living in a world all of their own. I discussed renting a space in Warsaw's Arkadia centre and was given a mind-reeling price, despite my protestations that the revenue from a café is far from that of a boutique. We believe that we should be here, but demanded rents are from the moon." In his opinion Polish developers are demanding crazy rents since they expect their investment be returned after 10 years. The standard is 25 years in the West. But the CHI Polska head does not mention all developers in the same critical tone. He is very satisfied with his cooperation with ECE Projektmanagement, a developer - he comments - which has constructed tens of commercial objects and has thereby learned to keep his feet firmly on the ground. He refrains from demanding unrealistic rents.

The brand is a help (a little)

Radosław Drabik of Café Nescafé disagrees when asked whether it is easier to negotiate rentals when one has the back-up support of an international consortium like Nestle, but adds that it makes him more creditworthy to his partners. "We are in a much better position than some unknown "Café Rose" for example, since we definitely are a partner of equal business standing for international developers".