FOC in CEE - the race of Nike & Co

Factory Outlet Centers (FOC) in CEE are developing at a significantly different pace than in Western Europe. Whereas in western countries the timespan between the opening of the first shopping center (SC) and the first FOC was nearly 30 years, in some CEE countries this is only 5 years.

Overall there is still a huge backlog demand until CEE is at the same level than Western Europe. The current development is varying greatly between the countries.

If a country is of interest for a developer is mostly depending on the size of the market and the number of inhabitants. Therefore it is not a big surprise that the biggest markets in CEE (Poland and Turkey) also have the largest sales area. Smaller markets like the baltic states, Serbia, Montenegro, Bosnia or Slovakia have no FOCs at the moment. Also there are neither existing nor planned FOC in countries with low purchasing power numbers (Belarus, Albania, Moldova or Ukraine).

The CEE countries are also still a long way from sales area densities of 9-10 sqm per 1.000 inhabitants (UK, Switzerland) – with one exception: with 9 sqm per 1.000 inhabitants Croatia offers a shoppers paradise for brand aware customers.

According to DI Wolfgang Richter, CEO of RegioData Research, the highest dynamic at the moment an be found in Poland, the Czech Republic and Romania. For example there are currently 150.000 sqm of sales area planned in Poland.

However for the next few years a decline of the number of new projects can be expected, due to the economic situation. This can be seen at some current projects where not enough tenants can be found.

The Austrian FOC scene has been dominated for years by the McArthur Glen Designer Outlet in Parndorf – but from September 10th the opening of the new DOC in Salzburg will bring some fresh air into the market.

Further information on Factory Outlet Centers, Shopping Centers, Hypermarkets and Retailparks in CEE can be found in our current edition of the Shopping Center Explorer 1/2009.