Bittersweet vision

Despite a rather cool beginning to the year, things gradually started to heat up on the last day of March, both in terms of the Warsaw weather and, above all, the mood on the retail market

More than 100 participants and 25 speakers met at the latest conference organized by ‘Eurobuild Conferences’. Representatives of the biggest shopping centre development companies engaged in a fierce debate about the potential for new projects in European markets. Richard Lloyd-Owen, retail leader for Europe, the Middle East and Africa at Deloitte, was the moderator of the first discussion, entitled ‘Consumer in crisis. Will the market suffer?’ He was joined on the panel by: Rafał Twarowski, the managing director of ECE Projektmanagement Polska; Przemysław Dwojak, the director of the geo-marketing, research and consulting department at GfK Polonia; and Zenon Dąbrowski, investment director of ARX Private Equity. Richard Lloyd-Owen affirmed that local entrepreneurs would now be of equal importance to those with a more global reach. Przemysław Dwojak in his presentation revealed some of the secrets of consumer behaviour and expectations. He argued that a single European consumer market does not exist, with each country instead having a completely different set of purchasing preferences. Rafał Twarowski had the most optimistic approach to the current market situation, as he assured the participants that the clothing and shoe segment has until now been doing fine.

Tatiana Spencer, director of  agency in King Sturge, was the moderator of the next panel, which was made up of: Patric Delcol, chairman of the Polish Council of Shopping Centres, and the development director and a management board member of ING Real Estate Development; Roman Skowroński, the operational director of Cefic; Grzegorz Czaus, a partner of the Ozone Architectural Studio; and Marek Cichocki, a partner of BN Concept. The topic of this panel was the new balance of power on the market. Both Roman Skowroński and Marek Cichocki referred to the times when the modern retail development market was only just emerging in Poland. They both concluded that the 10 years of its existence is only a very short period of time, and yet the changes that have taken place are quite staggering. Nowadays, the companies which were not so long ago boasting about their growth are reporting only losses. However, as Patric Delcol remarked, it’s worth taking into consideration the question whether the serious difficulties that more and more companies are finding themselves in result only from the crisis. During the discussion, Grzegorz Czaus emphasized the dramatic fall in orders for new architectural designs.

After a short coffee break it was time to discuss the troubling issue of project funding. Agata Sekuła (acting as moderator), head of retail investments in Central Europe at Jones Lang LaSalle, Tomasz Chenczke, chariman of Centrum Development and Investments, Maciej Tuszyński, the general director of Westdeutsche Immobilien Bank and Grzegorz Mroczek, the lease department director of Caelum Development, took part in the discussion entitled ‘Gold (and financing) for the bold.’ The representative of the banking sector, Maciej Tuszyński, admitted that banks are being too conservative in a time of crisis and yield generating projects should have easier access to funding. The participants noted that there continues to be room for new retail projects in smaller Polish towns, however these are unlikely to be mushrooming up all over the place, as they have done in recent years.

Jerzy Szymczak (moderator), the director of A.T.Kearney, Howard Saunders, the founder of Echochamber, Ian Elliot, the director of project and portfolio management at Atrium European Real Estate, took the floor in the next panel. A remarkable note of optimism was aired by Howard Saunders, who demonstrated, with the aid of several thought-provoking photos, that there is a lot that retailers can do to attract customers, especially in tough times. One photo was of a recently-opened shop in London owned by celebrity-chef Jamie Oliver where customers can cook meals from his cook book, another of a clothes shop where you can try the winter jackets on…. in a freezer room. He frequently reminded the audience of retailers that no-one actually NEEDS their ‘stuff’, so you’ve got to make people want to buy it. 

And in the last discussion panel the following participants discussed the biggest challenges faced by the retail space market in Central and Easter Europe: Renata Kusznierska, the general director of the Central Europe retail real estate department at DTZ; Markus Pinggera, Central and Easter Europe expansion director of the Deichmann chain; Anna Malarczyk, business development manager of Echo Investment; Mark Wills-Williams, expansion director of Halfords; Piotr Zieliński, board of management representative for leasing of Rossmann; Stefan Marzec, Eastern Europe director of Retail.com/Retail Consulting; and Łukasz Ochman, a partner of the Trusiewicz/Siwko law office. The representatives of companies leasing retail space unanimously claimed that they wanted to develop chains of new outlets on European markets, especially in Poland. High rents are of course a problem, but as Anna Malarczyk argued, developers’ flexibility due to this has its limits. Another problem for tenants was the currency exchange rate fluctuation. Let’s hope that things will have improved by 2010, and so everyone will be in a more optimistic mood at the next – 11th already! – Retail Vision 2010 conference. ν (ZW)