Right here, right now

Sławomir Zawadzki, president of the board of Napollo group: The way we implement our goals includes adopting the right direction of development in terms of activities related to retail properties. The target is to focus on the end user – the customers of shopping centres, with the next group being the tenants who we are going to fill the centres with. We want to speed up the development process. We have the suitable competences to do this, the potential and the resources – everything that is necessary to build efficiently and successfully. In addition, the largest market players are not interested in our market segment: convenience centres and retail parks. Thus the near future will be a time of identifying the best course of action and intensifying investment activity.

You mentioned that the company has to adjust to the market. What does this mean? What does the retail market look like today?
We are developing convenience centres in residential estates and satellite towns around large metropolises. For example, Centrum Zakupów centres are already open near Warsaw and Łódź. Admittedly, we have not carried out mapping for the whole of Poland, but we are interested in locations that have affluent populations.

What sort of incomes do you mean?
Certainly above the average for Poland. However, you need to do thorough analysis, because even in Warsaw there are places where the income is below-average. We want to be present in Warsaw but also in other large conurbations and towns with around 100,000 inhabitants that are not yet saturated with retail space. We are not currently looking at smaller towns. Top-to-bottom expansion, starting from the largest centres, remains our priority.

Our model shopping centre will be...
We are still working on the concept but we are currently leaning towards facilities with lower areas (app. 5,000 sqm gla). I believe that the competences needed for the construction of a facility with an area of 15,000–20,000 sqm against those for a small one (of up to 5,000 sqm) are completely different. What is important for our convenience centres is the balancing of functions according to customers’ needs in a given location, i.e. everyday shopping and services that can constitute the majority of the offer, plus fashion and accessories and possibly food and entertainment.

However, your portfolio includes some larger projects in the pipeline as well as some quite big ones that are already open, e.g. Renova in Warsaw (13,000 sqm gla). Will they stay in your portfolio?
Our operations are based on keeping the assets in our portfolio.

Your second development arm is residential construction. Projects in Lublin are already finished and the company is carrying out a project on ul. Poborzańska. What next?
We have virtually finished the construction process in Lublin, on ul. Północna in the city centre, while on ul. Strzeszewskiego in Ponikwoda district we are now waiting for the occupancy permit. In February we started the construction of the Nowy Punkt estate in the capital and the pre-sales were launched in September 2013. Our next project, Nowy Porządek, is to be built on ul. Niemcewicza in Ochota district (app. 110 apartments). We will market it in Q4 of this year or in Q1 2015. We are currently preparing some more locations, e.g. in Targówek. The area is secured and we are now working on the concept. Plots that are clear in terms of what can be built on them are what we are looking at. Our interest is in the here and the now.

I understand that the company’s operations are to be balanced between the two property sectors?Looking at it from the historical point of view, we started our activities with Galeria Renova (formerly Galeria Rembielińska). It might seem that our commercial arm is stronger. However, nowadays we try not to focus on any particular sector. We have adopted a flexible approach to opportunities on both the residential and the retail markets.

Are you considering acquisitions of finished facilities?Yes, we are. However, only those where it is possible to increase the value of the property through, for example, extensions, changing the tenants, and so on. We want to be creating the value of centres.

Being the owner and developer of a shopping centre is a challenge these days...
We currently have a tenants’ market. However, I believe that with the economic growth and the business cycle, retail space will be much in demand. Besides, even now the market features brands that are actively looking for such space and growing considerably faster than the average market rate, such as Rossmann or Biedronka.