Holding their nerve

Sharp suits, champagne, gourmet dinners and 5-star hotels. Sound familiar? Another major conference was held that met all The standards expected of the industry. There was, however, tension under the calm surface

The International Council of Shopping Centers’ conference, which was held in Barcelona on April 22nd-24th, was the perfect place to boast about your successful business, or – more probably – to find a shoulder to cry on. Unfortunately, there were many reasons to cry. According to research conducted by GfK GeoMarketing, Poland will be one of very few countries in Europe this year to see positive sales growth (of 2.5 pct), whereas the Baltic states and Hungary are faced with a serious drop in sales. The outlook for the euro zone is far from rosy. Under the new conditions newly opened shopping centres are the ones in particular difficulties, having also to invest more in marketing – according to market players. Bringing in new brands helps, though. Baneasa Shopping City in Bucharest, for example, introduced the first Gap store in the CEE region to their Bucharest mall. Retailers in general are still busily expanding, but only when and where possible. Mango introduced its first ‘He’ clothes store concept for men in Barcelona, and now plans to bring the concept to the whole continent. “We need some help from developers, however, who need to understand that turnover is different now,” said Aniko Kostyal, Mango’s expansion director for Northern, Central and Eastern Europe.

The conference participants did their best to remain positive, but, in the light of the IMF’s gloomy forecast for global GDP figures in 2009, this was no easy task. The projected worldwide contraction of 1.3 pct is certainly not good news. “In my opinion, the general mood of the meeting was rather optimistic, but everyone is trying to keep their feet on the ground and not get too carried away by false optimism,” was how one participant summed up the general mood. While no one had any doubts that the crisis is here, there were also those who looked a little further into the future. Sustainability and back-to-basics were the hot topics of the conference. The basic idea being that, now developers and investors have more time on their hands, with a number of projects waiting for financing, why not improve the ones that are on the way? Jeremy Rifkin, founder and president of US-based think tank The Foundation of Economic Trends, agreed that  shopping centres have the potential to significantly contribute to the drive for environmental and economic sustainability. “The world is currently facing three crises: climate change, recession and an energy crisis,” said Rifkin. “There is huge potential for the retail real estate industry to jump-start the world economy, and at a more practical level for a shopping centre industry facing an uncertain short-term future there are opportunities to reduce high energy costs and create a second income stream,” he added.

Alexander Otto, CEO of ECE Projektmanagement, emphasized the importance of shopping centres to the revival of urban areas, especially city centres. In the US, shopping centres have mushroomed in the suburbs, but Mr Otto made the case for a new, European approach to the issue. “The real challenge is to maintain the uniqueness of the area we are building in. The brands that we bring to the projects are the same everywhere. Our task is to deliver a unique project that attracts people back to the city, while preserving the appearance of traditional European cities,” he said. If the majority of investors and developers were listening carefully, we might have the good fortune to see a whole new wave of environment-friendly shopping centres, which an increasing number of shoppers would cycle to. The idea sounds wonderful – so we are keeping our fingers crossed. In ECE Projektmanagement’s experience, 13 pct of visitors to shopping malls are now going either on foot or by bike.

Another conference speaker, Dr Norbert Walker, chief economist at Deutsche Bank Research, labelled 2009 a “lost year” for international economies. “My best guess is that after a year of downturn there is a chance of stabilization or even a slight increase in GDP at the end of 2010.” However, Dr Walter warned that countries must avoid protectionism at all costs in order to provide the help that emerging countries will need to survive the recession.

The event wouldn’t have been the same without the prestigious European Shopping Centre Awards, which date back to 1975. This year the jury had the task of evaluating an increasing number of entries from emerging markets. Four centres out of a record 41 entries from 19 countries won full awards, with another six receiving special recognitions, certificates of merit and commendations. Which were the projects that caught the jury’s eye?  Delta City in Belgrade, a project by Delta Real Estate, took an award in the medium-size new developments category. In the large new-developments category ECE Projektmanagement received a commendation for Galeria Bałtycka in Gdańsk. The big hits this year were Turkish projects. All in all, four awards and certificates of merit went to Ankara and Istanbul, acknowledging the fact that Turkey is still one of the hottest retail destinations in Europe. ν  (MP)