Thinking big

Buy, develop and then, best of all, sell. This is the credo behind the next stage Polish retail centres have moved to. Promenada and Reduta in Warsaw are the prime examples

A retail developer's task does not end when a building is completed, tenants are found, agreements signed and rents regularly collected. Increasing competition, evermore demanding tenants, or the desire to double income, force developers to constantly upgrade their property and extension is one of the options. Experts claim that the market position of those centres which cannot be further developed, perhaps because of the size of their plots, is becoming significantly weaker with growing competition. One such example is Klif in Warsaw which is bound to lose customers to the gigantic Arkadia under construction nearby.

6,000 metres to begin with
TK Polska Operations announced the extension of its Reduta centre in Al. Jerozolimskie (70,000 sqm) some time ago. At a time when Blue City across the street, is about to offer competition with 60,000 sqm of retail space, such a measure is more than justified.
Construction of the Reduta retail park started the middle of last month. There will be a Decathlon sports shop on the ground floor and a number of offices on the first floor of the first 6,000 sqm building. This stage of development is expected to be complete in the second quarter of 2004 and the developer predicts that the next phase will involve further extension of another 11,000 sqm.

ECC hasn't finished
"Although Promenada was supposed to be built in stages, from the start, we didn't set any strict deadlines," says Michał Szramowski, Commercial Director at the European Construction Consortium. "We didn't predetermine the end purpose for any one of them either. Deciding when to begin the next stages and what type of tenant would take up space was dictated by the market."
The first stage of construction of the popular Praga retail centre was completed in 1996, and at the time, the 35,000 sqm complex had, in market terms, its full complement of shops. However, before the end of the same year, again responding to the market, ECC constructed an additional leisure and multiplex area and now the company is in the process of selecting the general contractor and the commercial activity for the third and last part of the Promenada centre (25000 sqm). Completion is planned for Autumn 2004, but this does not mean that ECC do not have any further plans for the building.
"The completion of the third stage of our centre will end the investment process which we have been implementing since the early 90's," says Szramowski. "There will be no further extension to Promenada but we are planning to modernize the first stage on the side of ul. Ostrobramska. We might even begin to develop the surrounding areas but these plans belong to the distant future."