Street life

Let's for a moment take a trip across the Atlantic. 'The International' portal in its article entitled 'The Death of the American Mall and the Rebirth of Public Space' argues that shopping centres have been losing their importance. It is estimated that in the next five years app. 15 pct of such facilities will face bankruptcy. There is even a portal that documents the demise of American shopping centres: as many as 400 centres feature on the deadmalls.com website. And there are more in the pipeline. The year 2007 was symbolic - that year, before the outbreak of the global crisis, not a single new shopping centre was built in the USA for the first time in 50 years. The next one to be opened only came along in 2012 in Salt Lake City. What is happening? Opinions are divided. Analysts point to the growing significance of online retail. Another interesting view is that it could due to the changes taking place in American cities, which are increasingly focusing on the revitalisation of city centres and suburbs. This has brought shopping back to the streets. "The evolution of city centres in the US has been taking place for a dozen or so years. City centres that only include office buildings and car parks have been consigned to history for many cities over there. Dallas provides an excellent example. A process of legal and fiscal stimulation was begun in the Texan city in the mid-1990s, resulting in a revival of the city centre, the return of residential and retail development, as well as some attractive public functions," says Marek Tryzybowicz, an architect and co-founder of the Bose International Planning and Architecture architectural studio.

An Old World problem too
Coming back to Central and Eastern Europe, the situation is quite different here. Perusing the numbers it is hard to find any evidence that high streets are in a position to pose a threat to shopping centres. The cities where retail has revived after the collapse of communism are suffering from the opposite problem - too many malls, which are killing off high street retail. According to Jones Lang LaSalle, over 644,000 sqm of retail space is to be delivered in shopping centres in Poland alone in 2013 - the highest number since 2009. CBRE reports that there are four centres currently under construction in Warsaw with a combined area of 36,800 sqm. How can the high streets threaten malls in such a situation? At the moment this seems to be impossible. "Generally speaking, retail is still moving to shopping centres. This is a problem that also afflicts the UK, where the traditions of high street shopping go much deeper. High streets are currently not developing as they should. Their potential is being suppressed. What are the main problems? Ownership rights - some shops belong to the city, some of them belong to private owners and others to cooperatives. Such inconsistency has been caused by the fact that each party has different goals. This makes good management much harder," claims Katarzyna Urbaszek of CBRE's retail department. Despite this, it is difficult not to notice that some of the large retail chains are actually trying to make their presence felt on high streets. These include such brands as H&M, Rossmann, Orsay and COS (Collection of Style) - a new concept from H&M, which has established its presence at ul. Mysia 3 in Warsaw. "However, these are only exceptions. Polish high streets provide limited development possibilities for large chains. There are not enough of the large premises needed. The lack of parking facilities also leaves a lot to be desired," adds Katarzyna Urbaszek.

City roots
"A city's roots lie in its streets, squares and well-thought out and consciously shaped compact development," says Marek Tryzybowicz. So why have shopping centres taken over cities? There is no unequivocal answer to this question, because each city is different. Due to the devastation of the Second World War Warsaw lost its nineteenth century character. However, generally speaking, cities across Central and Eastern Europe have also embraced so-called modern retail. After the fall of communism the rapid growth in consumption made it possible for contemporary forms of shopping to develop. "Hypermarkets came onto the scene, later followed by retail facilities supported by small, shopping arcades, and finally shopping centres made their entrance. In addition, the number of undeveloped areas in city centres were ideal for the construction of large retail complexes. But they are only a substitute for a normal street. Shopping centres are a kind of ostentatious collection of various functions gathered together under one roof. There was also the matter of comfort, such as the provision of parking spaces, toilets and security, as well as shelter from the weather. With a relatively scarce retail offer within the city limits, shopping centres have naturally become a very attractive place for shoppers," explains Marek Tryzybowicz.

Unfashionable malls?
The key reason for the development of shopping centres is their extensive offer. Attractive shops and the right tenant mix attract crowds of customers. The question is whether things will always be this way. Robert Mandżunowski, the president of the board of LHI, has some doubts about this. "Retail chains in Poland prefer to move in the familiar environment provided by shopping centres. In the short-term, this is safer than investing in high street locations. However, in the medium- to long-term prospect, limiting your offer exclusively to outlets in shopping centres is a mistake," says Robert Mandżunowski. In his opinion, chains have not picked up on the significant changing needs taking place among the people living in large Polish cities. "As with the inhabitants of large cities in Western Europe, more and more of them are choosing places where you can spend time together while being surrounded by the city, and the possibility of spending time outdoors. They do not like shopping centres, which frequently have dubious architectural qualities. They definitely prefer the climate of London to the atmosphere of malls on Staten Island. Where does the popularity of areas such as pl. Zbawiciela in Warsaw come from, where all the local bars and restaurants teem with life all day long until the small hours? This is a place with a number of historic buildings and which is open to people - this is its secret. These and similar places also need a retail offer. I think that in the next five years there will be a dramatic change in the behaviour of consumers," predicts Robert Mandżunowski. For this reason the company he manages is determined to invest in high streets. "We are interested in the area of ul. Chmielna in Warsaw and this is where we will be developing our new projects," announces the head of LHI. The company has already built the Nowy Dom Jabłkowskich department store there and is currently finishing another project - the Chmielna 25 office and retail development.

Studying the streets
The task of shopping centre owners is easy when it comes to surveying their customers. Facility managers can use electronic footfall metres; they can also easily determine where their customers come from. In the case of high streets, however, the task is much harder. Despite this, LHI has taken on the task of measuring the footfall on ul. Chmielna in Warsaw. The study was carried out by Millward/Brown. It turns out that nearly 12 mln people walk along the street per year (233,000 per week). By comparison, Arkadia, one of the most popular shopping centres in Warsaw (and Poland), is visited by nearly 21 mln people per year. According to the data, people who come to ul. Chmielna are characterised by their relatively high economic status. More than half of the respondents declare that they have enough money to spend and make some savings, while 30 pct of passers-by list shopping as one of the reasons for visiting the street and 23 pct food. This goes some way to dispelling the myth that people who frequent high streets are mostly interested in restaurants. What are they interested in buying? Around 75 pct indicate clothing, sports goods and products for children. A substantial proportion of them are interested in shopping for groceries - as many as 58 pct of respondents. Next on the list are electronics (58 pct), shoes (49 pct) and perfumes (41 pct). Only 17 pct of those surveyed are looking to use the services of the banks located on the street.

Role of authorities
Investors and property market analysts both stress that local authorities should help in the development of high streets. "The problem has already been noted in the UK. Prime minister David Cameron has recognised this himself and invited Mary Portas - a distinguished professional consultant in the retail world who was formerly employed by Harrods and Topshop - to draw up a report on the future of high street retail," says Katarzyna Urbaszek. Robert Mandżunowski is also aware that this has become an issue. "The pauperisation?of city centres in Western Europe took place around twenty years ago. Warsaw, due to historical factors, is experiencing this problem much later. In Western Europe the local authorities have handled the situation energetically and imaginatively in a lot of cases, for example, by supporting appropriate initiatives conceived by the creative professions or local business people. But in Warsaw the situation is completely the opposite. The city council only takes into account the budget aspect - and this is the reason for the unrenovated tenement houses and high rents in premises owned by the city. As a result more and more small businesses are going bankrupt: hairdressers, tailors, laundries, art galleries and small shops. There is a simple rule regarding any changes in rundown areas that are important for the essence of 'urbanity': things have to be cheap. If you can rent premises cheaply, artists and craftspeople will come forward themselves and draw in other people, as well as developers. After some time it will turn out that these people have transformed the area and added to the prestige of such places," he comments.

Multi-functionality is the future
The development of the internet and the changes in consumer behaviour should serve as a wake-up call for developers and the funds that invest in shopping centres today. It might turn out that in five to ten years' time the approach to such projects will have to be completely re-evaluated. "The shape of things to come? The atmosphere of a street and the functionality of a shopping centre without excluding niche tenants. Urban arcades with roofed high streets could be such a hybrid. Such projects are already appearing in Central and Eastern Europe," says Marek Tryzybowicz. He has in mind the Eurovea multi-functional project by Ballymore Properties in Bratislava. The complex combines office, residential, hotel and retail facilities. "Its backbone consists of a multi-storey roofed street. Such a layout satisfies large chain tenants and creates a suitable climate for smaller companies at the same time. It seems to me that such projects provide the answer to the question about the future of retail - and an escape from the monoculture to multi-functionality," says Marek Tryzybowicz about the project. He has also prepared a concept for a development along Al. Jerozolimskie in the same spirit (the design was commissioned by AIG/Lincoln). "One of the draft versions for this crucially important part of Warsaw involves creating the atmosphere of an urban arcade by means of a commercially coherent complex of various retail, office, entertainment, hotel, residential and symbolic facilities. The entire project would be based on the pre-war street layout. Modern tenement houses with ground floors earmarked for retail are to be created facing the street with a roofed arcade in the first stage of development," reveals Marek Tryzybowicz. In his opinion such projects could revitalise inner city shopping and be the answer to our hopes for varied and colourful urban development. "Because the point is not for high streets to compete with shopping centres. They should complement them and provide an additional offer," concludes Katarzyna Urbaszek.

Ewa Andrzejewska contributed to this article